Green Ronin Crowdfunding Legal Defense Fund In Fight Against Diamond Distrubutors

Green Ronin Publishing has set up a crowdfunding campaign to help cover legal fees fighting to get back their inventory from Diamond Comic Distributors in what it describes as "a dire financial threat to our company, not just today, but well into the future".

Diamond, which filed for Bankruptcy in January, still holds the stock of Green Ronin and over one hundred other companies in its warehouse, and has asked the court for ownership of that inventory so that it can liquidate it and pay its creditors. The distributor, while being mainly comic-book focused, also serves as distributor for some toy and TTRPG companies, including Green Ronin, Paizo, Goodman Games, and Roll For Combat.

The GoFundMe had raised $17K at the time of writing, with over 200 donations.

Paizo Publishing, also affected, has announced that its upcoming releases will not be available at major bookstores or at Amazon because the company has stopped shipping products to Diamond. This includes 12 August releases and 10 September releases, such as Starfinder Player Core, Starfinder GM Core, Pathfinder Battlecry, and more.

The court has scheduled a hearing on July 21 to hear objections from the affected vendors.

My name is Nicole Lindroos, co-owner of Green Ronin Publishing. Diamond Comic Distributors' recent Chapter 11 bankruptcy has impacted over 100 independent publishers, including Green Ronin, putting us in a very precarious position. Diamond is attempting to use a legal technicality to claim ownership of millions of dollars worth of consigned inventory, which amounts to several hundreds of thousands of dollars for Green Ronin Publishing alone. This is stock that we still own and have not been paid for.

This is a dire financial threat to our company, not just today, but well into the future. We must secure legal representation immediately before the deadline to do so passes.

While there is no "good" time for someone to steal hundreds of thousands of dollars worth of your property to sell for the benefit of their biggest creditors, it is especially challenging given that Gen Con is weeks away. Gen Con is not just a convention for us, it's our most important annual event for connecting with TTRPG enthusiasts, our business partners, and our community, and this year is no exception. We're launching new products and have already committed significant funds to cover everything from booth space, travel (flights, rooms), and most critically, the production of new books and merchandise specifically for the show floor.

Diamond’s bankruptcy and this legal action also mean that Green Ronin has lost its book trade distributor. We are looking for a new partner, but that will take some time. Book trade sales of literary licenses, currently The Fifth Season and The Expanse, are a key part of our strategies for those games. This is especially bad timing for The Fifth Season RPG because we recently received final approvals from N.K. Jemisin and the game is ready to go to print.

We simply don't have the cash on hand to do all of this, pay for an attorney, or participate in any collective legal actions with other publishers in our same position.

The banks are stopping at nothing to wring every last dollar out of Diamond - including taking several hundreds of thousands of dollars worth of Green Ronin product to sell in order to pay Diamond’s debts - but they can't do that, and we've got a legal agreement that says as much. Now, we just need to secure a law firm to represent us in the courts.

The funds raised through this campaign will be used directly to cover the escalating legal fees associated with fighting Diamond's claim in bankruptcy court. This includes attorney retainers, court filing fees, and the costs of pursuing every possible avenue to recover our inventory and protect Green Ronin's assets.

 

[JLowder]

The game is done, and Edge is just reprinting books for it every now and then. They're likely not paying much to have that added to Asmodee's overall Star Wars license, so just keep it going for now.

Licenses are generally contracted by category (board games, RPGs, picture books, T-shirts, etc) and narrowly defined, with any additional categories or even additional products likely costing a fair bit, especially on licenses such as Star Wars. I don't know the details of the current SW license, but five- or even six-figure guaranteed annual minimum payments to continue a license like that would not be unusual. A cut of sales for every product sold is typically tallied against those minimum payments, so if your game is really successful, you could end up owing more money after the minimum payment is "earned out."

Typically, the publisher cuts a deal for three or, if they are working with a more publisher-friendly license, five years. (Five- and even seven-year licenses used to be the norm, but the IP owners want to turn over the licenses and get new payments in as quickly as possible now. Three years or even shorter terms are the new norm.) The license can often be extended, for an additional fee, if the licensor is happy with the material being published and the money being earned, and the publisher is making the money they need to continue. If a publisher wants an exclusive license for a category, they have to be ready to pay more, potentially a lot more, for that kind of deal, if an exclusive is even possible. Exclusives are increasingly hard to secure in licensing for products like board games and RPGs.

Yes, having a house system makes publishing a licensed game easier and faster, but even there a good licensed game nudges the system to fit the IP. Eighteen months from signing a deal to publish a book or game to street date is still pretty much the starting assumption--the minimum time needed to do the things that need to be done. If you are trying to create a whole new system to go with the new license you are going to have a hard time making that timeline work. Not impossible, but a large challenge.

On the publishing schedule and planned books, one of the huge risks with limited-term licenses is you have to plan and likely start work on the second and third books before you know how the core book is received. If the game does not do as well as expected, the publisher can find themselves in a hole quite quickly between the cost of the license and/or the guaranteed minimums, plus the cost sunk into the follow-up books with money paid to freelancers before the core book hits stores. Crowdfunding makes this a little easier to manage, since you can package the first few books together, but that also increases the initial costs for creating and printing the material, and it still leaves you the problem of what to do as a follow-up release if the game goes to retail after the crowdfunding copies are delivered.

To circle back to the thread topic, this is all another reason the stock being grabbed by Diamond and the bank here is damaging to the publishers. If the work is licensed, the publishers have already paid for the product creation, the printing, and the initial money for the license, along with possible continuing minimum payments. If they can't sell the products, the licensing payment(s) will be yet more money they stand to lose.

 

[Jd Smith1]

I’m late to this comment, but you seemingly (clearly? blatantly? intentionally?) don’t know very much about Diamond’s longstanding troublesome business practices.

From the comics angle, Bleeding Cool has been keeping tabs for well over a decade, documenting each and every Diamond misstep, from the teensy / accidental to the egregious.

The fallacy I was responding to was that Diamond was doing a 'smash and grab', when in fact it is simply bankrupt and operating now under court order.

Yeah, Diamond was mis-managed, hence going into bankruptcy. But that is a far cry from a 'smash and grab'.

 

[JLowder]

The fallacy I was responding to was that Diamond was doing a 'smash and grab', when in fact it is simply bankrupt and operating now under court order.

Yeah, Diamond was mis-managed, hence going into bankruptcy. But that is a far cry from a 'smash and grab'.

And as they made their distribution deals and then entered into bankruptcy, they allowed their failure to threaten their publisher partners, whose stock is potentially being grabbed by the bank in a way that could well destroy those companies. As with your argument about the use of "malice," you are making a distinction without a difference.

 

[cranberry]

What's really disgusting is that even if the publishers are able to get their inventory back, the Diamond Execs can and will hide behind the corporate veil, when they should be held personally accountable for such a slimy move.

 

[Doctor Depravo]

The fallacy I was responding to was that Diamond was doing a 'smash and grab', when in fact it is simply bankrupt and operating now under court order.

Yeah, Diamond was mis-managed, hence going into bankruptcy. But that is a far cry from a 'smash and grab'.

I’ll agree with you that, no, it isn’t a big ol’ heist movie caper.

Where I disagree is your casually dismissive “eh, it’s business as usual—nuthin’ to see here” nature of posts.

Diamond has been negligent (in the ethical and colloquial senses, if perhaps not in your strict, pedantic, legalese-is-the-only-language-allowed manner) and mismanaged with lots of hinky stuff for years and years, and it’s burning all the relatively innocent bystanders.

This is all well-documented, too, going back decades before the RPG aspect made our particular hub of the geek-o-sphere take notice.

 

[Jd Smith1]

And as they made their distribution deals and then entered into bankruptcy, they allowed their failure to threaten their publisher partners, whose stock is potentially being grabbed by the bank in a way that could well destroy those companies. As with your argument about the use of "malice," you are making a distinction without a difference.

Exactly the opposite. You are assigning emotions to a simple numbers-crunch.

Was Diamond well-run? Obviously not.

Is this all some great evil plan? No. Feces occurs.

 

[Jd Smith1]

I’ll agree with you that, no, it isn’t a big ol’ heist movie caper.

Where I disagree is your casually dismissive “eh, it’s business as usual—nuthin’ to see here” nature of posts.

Diamond has been negligent (in the ethical and colloquial senses, if perhaps not in your strict, pedantic, legalese-is-the-only-language-allowed manner) and mismanaged with lots of hinky stuff for years and years, and it’s burning all the relatively innocent bystanders.

This is all well-documented, too, going back decades before the RPG aspect made our particular hub of the geek-o-sphere take notice.

My point is and was, is that Diamond leadership, such as it was, did not aim for this end. They were out to make a buck, and did so until technology and economic trends turned their fast & loose management style into a crash landing.

There is nothing to see here. The inventory will be liquidated for around six million, if all goes well, and the vast majority of that will go to the lenders. This matter has been a dead issue since January when the formal paperwork was filed.

The question everyone is ignoring, is what happens going forward. Diamond is history, the inventory is history. The question is who or what fills the void in distribution, and who survives this event, and who does not.

The time to worry about Diamond's methods was every year before 2024.

 

[JLowder]

Is this all some great evil plan? No. Feces occurs.

No one claimed it was a "great evil plan," but yet again your posts dismiss the events as "feces occurs" in ways that are, frankly, repulsive. And, yet again, not the flex you seem to think.

Oh, and the matter may not be as cut and dried as you seem to think, as there are ways in which the stock might be recovered from the process according to Maryland law, with what looks to be clear precedent. Good thing the publishers are working with lawyers who don't shrug this stuff off as "feces occurs."

 

[Doctor Depravo]

Exactly the opposite. You are assigning emotions to a simple numbers-crunch.

Was Diamond well-run? Obviously not.

Is this all some great evil plan? No. Fece

Exactly the opposite. You are assigning emotions to a simple numbers-crunch.

Was Diamond well-run? Obviously not.

Is this all some great evil plan? No. Feces occurs.

I am utterly boggled how you are able to distinguish “mismanagement”—again, which definitely includes some shady-as-Hades-stuff going back years and years—as being apart from “some great evil plan”.

Would you, perhaps, allow “some lame banal plan”?

Or “some weak-sauce shady plan”?

Or some other permutation that doesn’t involve the pedantry?

Intentionality matters. Well, at least it seems to to most of us….

 

[Jd Smith1]

What's really disgusting is that even if the publishers are able to get their inventory back, the Diamond Execs can and will hide behind the corporate veil, when they should be held personally accountable for such a slimy move.

Well, firstly, they committed no crime. Second, a major point of the LLC, ever since it was invented by the Romans, is to remove individual responsibility. Why is this still news?