Posted in: Comics, Comics Publishers, Current News | Tagged: chuck rozanski, diamond

When Chuck Rozanski Met With The Department Of Justice About Diamond

When Chuck Rozanski of Mile High Comics met with the Department Of Justice about Diamond Comic Distributors having a monopoly

While we continue to dive into the paperwork around the Chapter 11 bankruptcy of Diamond Comic Distributors, Mile High Comics boss Chuck Rozanski recalls the time when Diamond was investigated of being a monopoly by the US government. And revealing his previously unknown participation in that investigation. He writes on social media;

"Despite my long-standing friendship with Steve Geppi, I viewed his ascension to monopoly power as a potential threat to my own business, so I arranged to meet with the investigators at the United States Department of Justice who had already opened a file on Diamond's potential monopolistic activities. I met in their Washington, DC headquarters with the head of the Federal Anti-Trust Division (and her associates), and we had a frank two-hour discussion of the ramifications of Geppi's new monopoly upon both comic book retailers, and (more broadly) upon comic book readers. At the end of those discussions, I was asked to immediately report any egregious harm that Geppi's new monopoly was causing. This never became necessary, as I drove immediately after my meeting with DOJ to Timonium, Maryland to meet with Steve Geppi. I wanted to let him know personally that I had been tasked by DOJ to keep a wary eye on Diamond's future actions. He assured me that no harm would ever occur, and for the most part, he was correct. Or, at the very least, Diamond's monopoly ultimately created a great many positive outcomes for comics publishers and retailers, which for a long time helped to offset the negatives."

At the time, Diamond Comic Distributors exclusively distributed Marvel, DC, Image, Dark Horse, IDW, Acclaim and more. In 1997, this saw Diamond become the subject of an investigation by the U.S. Justice Department for possible antitrust violation, and the Justice Department launched an antitrust investigation into the comics industry and the alleged monopoly of Diamond Comics. The investigation was closed in 2000, with no further action deemed necessary as, although Diamond enjoyed a monopoly in the North American comic book direct market distribution, they did not enjoy a monopoly on book distribution. Chuck continues;

"Further contact by me with those anti-trust investigators never became necessary, as Steve actually did a remarkably good job of keeping his ambitions in check after his ascension to total control of distribution in the comic book world. Truth be told, he really did reign as quite a benevolent despot, with Diamond becoming the "lender of last resort" that provided darn near unlimited credit to comics retailers (and also some smaller publishers) that they deemed of critical importance. I was a direct beneficiary of this financial support on several occasions, with Steve intervening personally with his credit department to keep Mile High Comics in business during some of our very darkest hours. Without the slightest shred of doubt, Mile High Comics would not exist today without Steve Geppi having helped us in the distant past."

Who watched the watchmen? Turns out Chuck Rozanski did. But he did see certain problems coming.

"That having been said, the economics of the new comic book business became more difficult beginning about twenty years ago, with rising cover prices greatly increasing the risk (and negative consequences) of unsold copies. We also began to suffer under a plethora of new costs and fees from Diamond, including the imposition of very high freight charges, and a gut-wrenching 18% annual interest rate (compounded weekly) on all backdebt. Those staggeringly high costs imposed by Diamond were (regrettably) among the factors that darn near bankrupted us. I responded to these new risks and truly debilitating operating costs by gradually (over a span of more than a decade) reducing our sales of new comics by a staggering 90%. This backing away slowly from my dependence upon my five million dollars a year in new comics revenues (and thus, my entanglements with Diamond Distributing) saved my company, as we were eventually able to totally pay off all of our backdebt with Diamond, while replacing much of our voluntarily-relinquished new comics sales volume with secondary market/collectibles revenues that proved to be vastly less risky. I was still purchasing some comics and comic book supplies through Diamond as recently as last week, but only at a tiny fraction of our volume of twenty years ago."

He concluded by saying,

"Diamond Comic Distributors was by no means a perfect (or overtly benevolent) corporation, but the truth is that under Steve Geppi's guidance, a second Golden Age of comics publishing was nurtured and encouraged to thrive. Whether you cheer the news of Diamond's demise, or shed a tear, please do understand that I personally very much doubt that our wonderful world of comic books will ever again be so blessed as we were during the decades when Steve Geppi controlled so much of our collective destinies. That is why I honor him today, and thank him for all that he accomplished for us. All of us who love comics and sequentially story-telling been truly blessed to have had Steve Geppi play such a vital role in our lives."

There's a lot more current issues to dig into, but having a perspective on what came before is a very valuable thing.

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