Note: The following essay originally appeared in this magazine's news weblog, ¡Journalista!, and has since been re-written for print. (See "Suicide Club," TCJ #277.)

While preparing this essay last night, I received the following email. It's in regard to a poll currently being taken by comic book writer Peter David, on the subject of Marvel's "no re-order" policy, which I discussed yesterday:

"This poll is slanted and totally spun in the favor of comic book retailers. Collectors opinions are more important than retailers we control the industry supply and demand etc...

"As a collector it's about time Marvel and the other publishers start producing less books. As it is now anything post-silver age is never going to be worth anything. There are just too many copies of everything. Comics aren't a collectable anymore because the market is flooded. I personally would rather have to be in line on Wednesday at the retailer to get my under produced comic, that someday may be valuable. Than to be able to stroll 6 monthes after a book comes out and be able to get it because 90 billion copies were printed. You're concearned with the retailers and they are concearned with their bank statement. Who's concerned with the collector?

"Thank You, (name withheld)"

I've kept the correspondant's name off this post because I have no animosity towards the person, but I'm afraid they won't like my answer: "if the industry's smart, no one is concerned for you."

Your argument is wrong in several places. First, collectors' opinions are not more important than those of the retailers. The retailers, after all, are the ones who've put their livelihoods on the line to support the continued sale of comic books; it's axiomatic that this gives them more influence than you may have.

Second, collectors are (hopefully) a minority within the comics-buying public, their numbers eclipsed by a wider community of people who buy comic books because they want to read the damned things rather than throw them in mylar and wait for them to appreciate in value. This is a good thing, especially from the collector's perspective -- it's the people devoted to a given series as readers who most want to own complete runs, which in turn spurs demand. Without readers, there's no one willing to actually pay for the books you're collecting for value. Unless there are enough copies available for the casual reader to buy in the first place (you know, to get them hooked on the story), collecting for value is invariably a waste of time and money. Indeed, as I'll argue below, collectability as you seem to understand the phenomenon may never again have the importance it once held within the industry; I think you're pining for a bygone era, I'm afraid.

Third, and most important, every time the industry has pandered to the speculative collectors, the result has inevitably been disaster for all concerned.

I was eighteen years old in 1986, and I saw the original speculator's bubble burst for myself. I watched as it put a very good friend of mine out of business.

I'd gotten out of comics a few years earlier, or so I'd thought. Having drifted into more adult books (you know, the kind without the pictures), I had become all too aware that what I'd previously been reading had in fact been children's comics, and I just wasn't willing to settle for kiddie fare any more. In any event, the closest comics shop was a half-hour's drive, and I just wasn't willing to put that kind of effort into getting my hands on them.

When a new comics shop, Fog Hollow Books and Comics, opened just a few blocks from my house, I was still curious enough to set foot inside -- just to check it out, you understand. I looked around, saw pretty much the same thing I'd seen in every comics shop I'd even set foot within in my lifetime, and turned to leave. At that point the owner, a cheerful and bubbly woman by the name of Sue, piped up: "Find everything okay?"

I quickly explained that I used to read comics but wasn't really interested in standard superhero fare anymore. "Ahh," Sue said, and walked out from behind the counter and over to the racks, then returned to me with a copy of Saga of the Swamp Thing in her hand. "My niece really likes this. Try it and see if you don't agree. Go ahead and read it; if you don't like it, you don't have to buy it." I sat down and proceeded to read my first issue of Alan Moore's debut American title. Completely hooked, I bought it (along with a few of the back issues) and took my booty home.

A month or two later, I was working there. The store had an extremely congenial atmosphere: there were gaming nights, and Sue always strove to encourage regulars to hang out and chat awhile. Fog Hollow had a homey atmosphere, unlike the almost pornshop-ish vibe given off by any number of her competitors. She had a genuine love of comics, and she shared her enthusiasm for the medium at every available opportunity. She even wrote a comic book once -- the early Spider-Man softcover, Hooky, with art by Bernie Wrightson. When Marvel sent her her first payment for the book, I even got to see one of the notorious checks with the little work-for-hire contracts on the back, with the line for signature where you were supposed to endorse it for the bank. She sent that one back, as I recall, and made Marvel send her a real check.

Moreover, the store was profitable, at least at first. This was during the black-and-white boom of the late Eighties, when teenage kids would buy just about anything in the hope that they would accrue in value and be resellable later. There were some good black-and-whites, too, and as an employee I got to read them all, sorting though the material and collecting the ones I actually liked to read. For the longest time, my four favorite titles were Love and Rockets, Cerebus, Zot! and Those Annoying Post Brothers -- four of the most disparate titles available in those days.

After a while, though, the funnybooks began to pile up in the shop. I couldn't tell you when I first noticed it; it just sort of creeped up on everyone. Boxes of the stuff started gathering in the back room, and before anyone knew it, Sue was announcing her intention to close down the store. Everyone who shopped there was dumbfounded. I remember the farewell party as being a relatively emotional affair.

The problem wasn't an excessive print run -- most of these books had relatively low circulations when compared to what Marvel and DC were putting out at the time. Likewise, while many of them were quite low in quality, there were any number of quirky little titles that were actually quite good. No, the problem was that everyone was bagging the damned things. Folks: if half the readership of a given book is collecting it for the resale value, then the other factors just don't matter. So long as there's a surplus of people with comics wrapped in plastic and ready for resale, the books in question are going to remain a buyer's market, and that's just all there is to it. Overprinting a book can exacerbate the phenomenon, but unless you're talking about very low printruns, the syndrome exists independently of the number of copies printed. Once the kids buying the books realized this fact, the bubble burst and retailers were left holding the bag. Writing in The Comics Journal #116, Gary Groth summed up the phenomena that shut down Fog Hollow accurately enough:

"It's my understanding that most comics retailers work on a tight financial base; that is, they are under-capitalized and must constantly move product in order to generate cash to pay for next week's or next month's books, or have to sharply curtail the amount of their purchase from distributors. In this instance, the cash they would have theoretically generated was sitting on their shelves in the form of unsaleable crap. All they could do was stare at it and bemoan their lack of judgement. This puts the retailer in the ridiculous position of being unable to fill the demand for certain books because he literally cannot afford to buy them from his distributor. Mr. Retailer had to work with what capital he had left, which resulted in any number of ugly scenarios: if he had no capital left, he went out of business -- as an inordinate number of retailers did in the last six months; he may have cut back orders dramatically because he didn't have the capital necessary to buy his standard order; he may have paid his distributor late or not at all, which in turn forced distributors to pay publishers late or not at all. The domino was in place, and it was an unmitigated disaster for distributors as well as retailers."

That's pretty much what happened to Sue, and it happened to a fair number of other retailers as well, but it wasn't by any means as calamitous as Gary made it out to be at the time. While the industry as a whole took a hit -- publishers across the board took a 15-50 percent hit in sales for a time, and a number of shops closed down -- there was nonetheless enough saleable material being produced that smarter shopkeepers were able to weather the bursting bubble without too many tears. As future events would demonstrate, Gary's definition of "unmitigated disaster" ignored the sheer havoc that could be unleashed once the economy of scale is introduced to the proceedings.

What follows is actually an abbreviated history of two distinct events: a speculator feeding frenzy which turned into another bursting bubble, followed in short order by a disastrous attempt by Marvel to take advantage of the resulting mayhem and seize control of the direct sales market. The two events are interconnected. The former softened up the market, creating the conditions for the latter. Moreover, both events are crucial to understanding why I believe Marvel's current business strategies are detrimental to the current market, and provide an object lesson for modern retailers interested in understanding how easily the distribution network can be thrown into chaos. Bear with me -- even in abbreviated form this story takes a while in the telling.

In his mammoth four-part history of Image Comics, TCJ News Editor Michael Dean described a meeting that took place in December of 1991 between Marvel's then-President Terry Stewart and at least three of his company's most popular artists. By their own accounts the artists were there to make Marvel an offer they knew the company would refuse: give them their own, creator-owned titles or face a mass walk-out. Marvel refused, the artists walked out, and in February of 1992, six of the seven initial members of Image Comics -- Rob Liefeld, Todd McFarlane, Jim Lee, Marc Silvestri, Erik Larsen and Jim Valentino (Whilce Portacio, who left the company's inner circle shortly afterward, was in the Philippines) -- held a press conference to announce the formation of their new company. Dean noted the importance of the event:

"Marvel management may have desperately wanted to believe it didn't matter who was picking their cotton, but if so, they were in denial about a shift in public attitudes as plain as the Rob Liefeld Levis commercial on their TV sets. As (Larry) Marder told the Journal, 'In the past, the dedication of a Marvel Zombie had transcended the fact that a cool artist was doing a book. But people were now talking not just about Spider-Man or the X-Men but about Todd McFarlane's Spider-Man and Jim Lee's X-Men.'

"By failing to hold onto its most popular creators, Marvel had set the stage for a showdown that would test its worst fears: a competition between the top artists and the top characters in comics. There were few who weren't anxious to see who would come out on top. When the Image partners announced that they were opening for business and would soon be releasing a new line of comics, it sent ripples of excitement through the comics industry and beyond. Barron's, the widely read financial publication, ran a feature article, and even CNN turned its cameras on the new comics company. 'Everybody anticipated that something big was going to happen,' Marder remembered. 'It was akin to the way people were getting excited about the astronauts before they went into space.'"

The stakes were high. Previous companies had attempted to challenge Marvel's dominance of the marketplace, only to be drowned out in a flood of titles which ate both shelf space in the comic shops and fan dollars that might otherwise have been spent experimenting with alternative titles. The problem for Marvel, though, was that the excessive number of titles had eventually convinced even the most diehard Marvel fan that it simply wasn't possible to purchase every book. By the time the Image creators broke from Marvel, the company had already begun to resort to gimmicks like variant and hologram covers to stimulate interest among readers and collectors. Fans meanwhile had begun to discriminate between titles based on the creators who made them, seeking out work by writers and artists whose work they liked best and learning to ignore the more substandard works. This created the rise of what was then the modern crop of fan-favorites -- almost all of whom were now publishing under the Image banner.

It's hard to underestimate the initial effect the formation of Image had on both superhero fans and the comics industry in general. The creators' first public signing at Golden Apple Comics in Los Angeles attracted as many as 2000 comics fans; police had to be called in to control the crowd, while news helicopters hovered overhead, recording the massive wall of people. The Image crew's next public appearance, at the Chicago Comicon, drew lines a mile and a half in length. The earliest comic books released by the company had sales in the high-six and even seven figures, numbers rarely reached even by Marvel and DC by that point, and unheard of for any other company.

For Marvel Comics, which had only just taken itself public on the New York Stock Exchange the year before, it must have seemed like D-Day. Looking back on the phenomenon in 1996, Capital City Distributors co-owner John Davis told The Comics Journal: "When Marvel treated the creators like they weren't important, and the six top creators left to form Image, that put a serious blow onto Marvel which they never recovered from, and when Image left, they took 15% of Marvel's market share, and it has never come back. Marvel has never been able to regain that market share. It just was gone." (TCJ #188, pg. 39)

Adding to the frenzy was the appearance of a new market of buyers: trading card shops, which had just experienced a speculation-induced bust in their own market and had retrenched their financial positions by adding comic books to their backstock. For such a market, used to trading their wares in almost stock exchange-like terms, the sudden appearance of a new comics imprint fuelled by outrageously popular creators must have looked like a no-brainer. From the beginning, Image comics weren't merely bought by fan readers, but by speculative collectors as well, who purchased multiple copies of each issue and sealed them away as investments. Looking back on the phenomenon in February of 1994, then-Journal News Editor Eric Reynolds questioned industry experts to put it in context. From TCJ #166:

"'This sort of thing happens every five to seven years,' said industry analyst Mel Thompson, 'Five years represents a comic book retail generation, considering shops have a 10 percent customer turnover in a given year. In this case, there was an avalanche of card shops which got into comics, but these retailers didn't understand that profits are made differently in the comic book industry. Card dealers make profits by marking up hot product above suggested retail prices and blowing out slower product at markdown prices. The comic book market, on the other hand, plays the cash flow game... Bring in, sell out, turn over.'"

The final element necessary to turn the Image frenzy into a massive speculative boom was Wizard magazine. Wizard can best be understood as the Comics Buyers Guide on crack cocaine; while the Guide had always served as a price guide for longtime collectors, it also served as a reader's guide and nostalgia review as well, catering to both the mainstream industry's readership as well as collectors who bought back issues of decades-old comics out of a fondness developed in their childhoods. Wizard was different. It catered exclusively to the newest and youngest readers, excluding anything comics-related that didn't fall into its immediate sphere of attention, and from the very beginning it kept the speculative market front and center. Wizard was above all else a price guide, as John Davis noted (again from TCJ #188):

"...Wizard was a big factor in the speculator market. Wizard hyped books as being hot and collectable and investments, and that gave rise to the big boom we had in '92, '93, and all the younger readers were coming and reading Wizard; Wizard was aimed right at them, it was telling them exactly what they wanted to hear, that there was a lot of investment potential in these new comics. That also coincided with the start-up at Image and Valiant, which had been going on for about a year, but suddenly Valiant started to take off and we were being told that Valiant comics were hot and going up in value. A lot of these younger readers became mini-investors and sales were greatly inflated. One of the examples I always point to is Turok #1, which came out in the Spring of '93 and sold to retailers 1.7 million copies. I'd be surprised if 200,000 of that actually sold to customers."

Superhero comics publishers naturally responded to the sudden increase in collector sales by increasing the number of titles (and consequently the number of "collectable" first issues) and increasing their print-runs. Crossovers, mini-series, and cover gimmicks proliferated at an ever-expanding rate, and for a while, fans ate it all up.

It's possible that, had all the companies involved kept publishing at a steady and regular pace, the boom could've been kept in motion for years before the inevitable bust occurred, driven as it was by an excess of speculators and a smaller minority of the very readers needed to fuel the demand for back issues. Unfortunately, the process became accelerated by a slowdown in production from the single largest producer of fan-favorite books: Image Comics. From the third installment of Michael Dean's Image history:

"Of the six partners, McFarlane, who had discontinued his work for Marvel earlier than the others, was the best-prepared to begin turning out issues for Image and the last to run into deadline problems. 'Nobody knew the success we were going to have, but Todd was ready for it,' Liefeld told the Journal. 'He was stockpiling comics material. I went from X-Force one day to Youngblood the next day. Jim Lee went straight from X-Men to WildC.A.T.S. But Todd was coming off the bench with fresh legs. He had six issues out to our three or whatever, and he never hesitated to point it out at shows. He was the most dedicated to his product, he'd say. I'm the guy who's giving it to the fans.'

"Even McFarlane, however, reached a point where he was forced to use fill-in issues by other creators in order to catch up. And, as he became increasingly distracted, eventually all of McFarlane's comics became fill-in issues by other creators. According to Marder, 'Todd always had the most discipline, but it's hard creating comics while being asked to meet with toy manufacturers and pitch movies.'"

Image began to get later and later in the release of new issues, and their solicitations failed to reflect this fact. Titles would ship months after they were supposed to ship, causing instability at the retailer level. By the time some books hit the stands, fans had lost interest in what they had previously ordered through their comics shop subscription services; the sell-through rate for such books was atrocious when compared to books that shipped on time. In April of 1993, only two of the thirteen titles Image solicited for the month actually shipped on schedule. According to Capital City's Internal Correspondence, Image held the last-place position amongst the larger publishers regarding on-time shipping in 1993. Writing for the Journal, Eric Reynolds added up the figures and estimated Image by and of itself put the industry's maximum sell-through rate at 88% -- that assuming the rest of the industry shipped on time and sold through at 100%.

Compounding the problem was the lead-time between when retailers ordered their books and when they actually received them. By the time it became clear that the first issue of a given series would be late, the second and third issues had already been ordered. During the latter half of 1993 the market began to slow down considerably, as retailers found themselves sitting on increasing piles of unsold comic books they now had no hope of selling. Here's Jim Hanley, owner of New York City outlet Hanley's Universe, from Eric Reynolds' summary of events in TCJ #166:

"With the massive speculation that went on in 1993, we blinded ourselves to how much risk there was. Early in the year we started to realize how much exposure we had on Image product, because that's what was selling in the largest numbers. The problem that most people complain about -- the books being late -- they complain about the wrong aspect of it. When books start shipping late, you end up ordering four, five, six issues before you see sales, and that's where the greatest danger is, especially books selling in large quantities. We finally said, 'wait a minute,' and added up all of the Image orders we had outstanding and it was something in excess of $500,000 in retail."

Here's industry analyst Mel Thompson, from the same issue:

"The negative impact is immeasurable, but look at it this way: your typical undercapitalized, unknowledgeable retailer walks this cash flow tight rope. He usually writes a check to his distributor on Friday for his new books, but deposits money made from those sales the following Monday to cover the check. When five late Image books arrive unexpectedly, they cause a negative chain reaction -- they upset the retailer's already precarious weekly budget, causing him to go over[budget] for books that will probably have a poor sell-through because they are late. Although he may make enough to cover his distributor bill for that week, the usually poor sell-through on a late book coupled with the discounts retailers often give subscribers means that they will probably have no money left over to pay rent, utilities, employees or any other overhead."

The final nail in the speculator market's coffin was a mini-series called Deathmate, a variant-covered title which featured a crossover between characters from the Image line and that of another comics company, Acclaim. While the series originally captured a high degree of anticipation among buyers, it shipped so many months after its due-date that the buzz surrounding it had evaporated in the interim, again leaving retailers holding the bag.

In early 1994, the market's second speculator bubble finally burst, and the following year the hemmoraging was ferocious. By year's end a contraction of the marketplace, averaging 10 percent per month since June, had left several publishers (notably Continuity, Defiant and Eclipse) showing signs of wobbling. Shops closed left and right; from a 1993 peak of roughly 9400 comic book shops nationwide, audits by distributors Diamond and Capital City found that number down to between 6100 and 6500 shops still standing in August of 1995 -- roughly one-third of all North American retailers closed their doors and went out of business.

In the aftermath of the Image-inspired crunch, retailers, publishers and distributors alike found themselves looking to each other to excercise restraint, hoping for more modest, normal industry growth. In October of 1994, Marvel offered a brief outline of its plan to restructure for the following year, entitled "Marvelution: The Art of Change." The company began to decentralize its editorial structure, and cut significantly the number of both the titles it published and the employees on its payroll. In November, the notoriously market share-obsessed company purchased Malibu Comics, which had formerly been home to Image before its creator-owners decided to go their own way. The acquisition boosted Marvel's market-share roughly 5 percent to a total 40-percent share of the market. It simultaneously acquired a trading card company called Skybox, which along with its ownership of Fleer strengthened its dominance of the card market.

Image Comics, meanwhile, hired cartoonist Larry Marder away from a position in Moondogs comics shop chain in an effort to bring itself into something laughably resembling a professional production schedule. The efforts soon began to bear fruit, and Image finally began shipping books on time.

For a while, it looked like it was going to work; by early 1995 the precipitous drop in industry-wide sales finally started to level off, and it looked like the worst was finally over. What followed next, however, made Image's disastrous shipping schedules look positively benign by comparison.

In December of 1994, Marvel acquired Heroes World Distribution. The following March, they announced that Heroes World would serve as their exclusive distributor, and that Heroes World would no longer distribute any title not published by Marvel. In a page from the company's June solicitations catalog for retailers, a letter from then-Marvel Vice President-Direct Market Matt Ragone stated, "While opinions may continue to swirl about the industry about the imact of the change, the fact is no segment of this industry is satisfied with 1994 performance levels, or early 1995 performance... To Marvel, the key to turning things around begins with consumers and works back from there."

Marvel's campaign of "Marvelution" had begun in earnest, but in the exact opposite direction stated: starting with the distributors, Marvel clearly intended to use the soft market conditions to consolidate its dominance of the industry in a distinctly top-down strategy. While a press release from Vice Chairman Terry Stewart (according to Reynolds' report, he'd held three job titles within the previous year) noted that "the time has come to emphasize the concerns of the retail community," retailer concerns seemed like the last thing on the company's agenda. Adding to the sudden turmoil were rumors of a possible exclusive distribution arrangement between Diamond Distribution and DC Comics, in an effort to counterbalance Marvel's sudden seizure of distribution power.

Reaction within the industry was one of almost immediate antipathy, as best voiced by cartoonist (and former Marvel artist) Frank Miller, who in a statement released through his publisher Dark Horse said, "Can everybody stop apologizing for them now? For decades, Marvel Comics has denied who created their characters, who made their comics worth reading. Now, having driven the best talent away, they face plummeting sales. Desperate, and terminally unable to admit that it is their own historic mistake that has made their comics so lousy, they turn on the distributors and merchants themselves, applying the same grab-it-all, control-it-all mentality that drove the writers and artists and readers away. You folks who distribute the comics, now you know exactly what they did to the artists who gave loyal service to Marvel, who showed Marvel goodwill."

Undeterred, Marvel representatives embarked on a 19-city tour of the United States in an effort to convince retailers of the sincerity and necessity of their actions, and to explain the terms that they would be enforcing under the new distribution arrangement. The second thrust of their mission was successful, as the new terms were explained at each stop; the first thrust... less so. At their April 2 stop in Bellvue, Washington, Terry Stewart announced that he was stepping down as Vice Chairman, in favor of "more corporate duties," notably including the launch of a new chain of Marvel-themed restaurants. From Eric Reynolds' news report on the meeting (TCJ #176, pp. 11-15):

"Stewart also announced that his replacement as president of Marvel Comics was Jerry Calebrese, a five-year Marvel employee who previously owned Games magazine. The announcement of Calebrese was met with a tepid response from the retailers, most likely due to Calebrese's perceived masterminding of the controversial Marvel Mart program which offered mail order items to Marvel consumers that were never offered to retailers."

Stewart repeatedly emphasized what he called "The Covenant of the Partnership" during the meetings. He began his explanation of this partnership with a series of projected slides detailing various "truths":

• The Marvel Covenant: Establish a Marvel/Heroes World relationship with the retailer

• Truth #1: There are three parties that make a successful sale:
  1. The consumer
  2. The retailer
  3. Marvel/Heroes World

• Truth #2: Mutuality of benefit; the retailer and Marvel must form a partnership

• Truth #3: Recognition that this partnership might not work perfectly all of the time

• Truth #4: Retailers must share information to make knowledgeable decisions

• Truth #5: That knowledge must be used to produce profitable performance levels for the retailer and Marvel

• Truth #6: We must strive to offer the best possible, profitable product -- based on entertainment value, not speculation

• The Marvel Covenant: Putting these truths into action!

At this point, Stewart stepped down from the podium, to be followed by Heroes World executive John Pope, who explained the tentative retailer trade terms. These terms involved a sliding scale which ran from a monthly $300/40 percent discount minimum up to a $16,000/55 percent top-level unadjusted discount, with various sales incentives that could push the retailer discount upwards of 62 percent. Following this presentation, Marvel representative Craig Kunaschk took the podium to moderate a question-and-answer session. While most of the questions were related to the terms presented by Marvel, a few were more pointed. One example, again from TCJ #176:

"One retailer from Anchorage, Alaska, asked Terry Stewart how he could be sure that Marvel wouldn't eventually attempt to cut the direct market retailer out of the equation of selling to the consumer, given that Marvel so effortlessly cut the other direct market distributors out of its business.

"Stewart's answer was less than pointed, beginning by saying, 'Today we're here to talk about our relationship with the retailer,' and continuing by discussing the previously covered covenant of the partnership.

"'Does that answer your question?' Stewart asked.

"'Not really,' responded the retailer.

"'I'm sorry to hear that,' said Stewart."

Writing in the following issue of the Journal (#177), Managing Editor Tom Spurgeon noted that he believed Marvel had asked for information from client retailers far in excess of their need to know for any other reason than to explore going into retail themselves: "It seems clear to me. If Marvel doesn't end up doing something with retail, it's because they've decided they can't. Not that they've decided they shouldn't, and not because they've decided they could but it's better not to."

Shortly after word of Marvel's exclusivity with Heroes World first leaked, Capital City Distribution filed a complaint against them in a U.S. District Court in Wisconsin, in an attempt to prevent them from terminating their deals with other distributors in what they claimed was a violation of Wisconsin's Fair Dealership Law. A flurry of suits and countersuits soon followed. In April, retailer Ross Rojek, owner of Sacremento, California's Beyond the Pale, filed suit in California's Superior Court, seeking a temporary injunction against the Marvel distribution deal for various claims of unfair competition and trade as well as an obscure clause in California state law that forbid forcing a party to buy a "horror" comic in order to purchase something else. Rojek's suit further alleged that Marvel's moves would force him out of business.

In April, DC Comics and Diamond Distributors let the other shoe drop when they formally announced an exclusive arrangement between themselves. While one Diamond press release from the period claimed that "Under this new sales representation arrangement, Diamond will remain a 100 percent independently owned and operated company," The Comics Journal managed to obtain a copy of a DC memo concerning the deal (TCJ #177, pp. 9-19), which noted among other things that DC had the right (but not the obligation) to buy Diamond:

"i) outright between the tenth and sixteenth year; or
ii) in the event of the owner's death, disability or departure from the company;
iii) on a highly favorable formula ranging from 3 to 5 times EBIT, reduced proportionately for the portion of its sales derived from DC, which we anticipate will yield a final purchase price of 3 times EBIT or less if we decide to proceed"

On April 28, just hours after the announcement of the DC/Diamond deal, Capital City filed suit against DC, in the same District Court and under much the same allegations as their suit against Marvel; on May 2, Capital amended the complaint to include Diamond as well. By May 5, however, DC Executive Publisher and Publisher Paul Levitz and Capital co-owner and President Milton Griepp announced "that an agreement in principle had been reached" in the suit. Capital co-owner and Chairman John Davis confirmed for the Journal that the suit had been dropped. Meanwhile, fourth-largest distributor Friendly Frank's began making noises about filing a pre-emptive suit against DC and Diamond as well.

On May 3, Marvel continued its restructuring by laying off its Publicity and Promotions Department in its entirety, putting four people out of work. That same month the company lost 6.97 percent of its market share, and in June the company fell another 8.32 percent to just 18.88 percent of the market -- leaving DC Comics, at 19.4 percent, with the number one market share for the first time that many people in the industry could remember.

With Marvel and DC now signed to exclusive deals for distribution, the situation for the other distributors took a turn for the desperate. Canadian distributor Andromeda Distributing Ltd. had already filed for bankruptcy on April 13th, leaving any number of unpaid creditors in its wake. Facing the loss of over 60 percent of their comic-book sales, both Capital and Friendly Frank's began pursuing exclusive arrangements with a number of other publishers, with Image and Dark Horse being the key prizes left on the playing field.

On July 21, both Image and Dark Horse were announced as having signed to Diamond.

Capital announced shortly thereafter that it had signed Kitchen Sink and Viz Comics in "strategic alliances," but for many the writing seemed to be on the wall. Capital maintained negotiations with a number of smaller publishers as well, but ultimately only Tokyo-based Tohan, Spanish art-print company 1000 Editions and Coppervale Press, the imprint under which James Owens self-published his series Starchild, ever took the bait. Fantagraphics publisher Gary Groth, negotiating on behalf of Drawn and Quarterly and Black Eye Press as well as The Comics Journal's parent company, noted his doubts as to whether Capital could remain a viable publisher without distributing any of the top five publishers in the industry, comprising some 80 percent of the market. Publishers NBM, Antarctic, and WaRP Graphics also dallied with Capital before turning down proffered deals.

By October, Capital had shut down 18 of its 20 regional service centers, while engaged in ultimately fruitless talks with Marvel in the use of its facilities and staff to augment Heroes World's woefully inadequate services. Diamond, meanwhile, was negotiating with smaller publishers in hopes of signing exclusivity deals. For Capital, the oxygen supply was slowly being cut.

Lost in all of this exclusivity madness were the retailers, who for the most part had no choice but to follow along as best they could. Attempting to assess their next move, NBM surveyed various American retailers to find out how they would react. The company's Terry Nantier spoke to the Journal about the results (TCJ #181):

"With regard to the responses NBM received, Nantier said: '...we were a little surprised at some of the animosity. It's understandable, of course, that the retailers are not particularly happy about how things have been going. But, the animosity is kind of spilling over against distributors as well as publishers and that's been disconcerting and discouraging.' How do retailers feel about NBM and other alternative publishers going exclusive? '[With] companies like ourselves, in general, they don't like it,' Nantier explained, 'but most would go along. [Still,] there was a fair percentage fighting very strongly and show[ing] a fair amount of animosity against any further exclusives.'"

Retailers had any number of complaints. Heroes World in particular was singled out for incompetence, but all distributors were castigated for general lateness in filling both orders and re-orders, for the increase in expenses due to UPS shipping, for lower discounts, for increases in the costs of preview catalogs -- you name it.

The effects of the two consecutive crises -- the second speculator crash and the distributor wars -- had taken a dreadful toll on the comics business. The direct distribution network now stood at around 4500 retail outlets; just over half the industry had vanished in the space of three years. Midway through 1996, Diamond had roughly 87 percent of the market share, compared with just 12 percent for Capital City.

For the rest of the industry, the damage finally began to level off to some meager level of stability, but this still left all involved in very unhappy positions; the retailers still left standing had been bled dry by the twin economic massacres, and had little left in the way of capital resources with which to absorb further damage. Virtually every publisher signed to an exclusivity deal was unhappy with it. Viz Comics, for example, watched sales on some of its titles drop by 25-30 percent after signing with Capital. Publishers saw a drop in sales commensurate with the drop in retailer locations. An obcenity charge filed against one of Friendly Frank's retailer locations in Illinois delivered the final blow to the company, already staggered by injuries inflicted by the distribution conflict. On July 26th, Diamond Distributors bought Capital City -- around the same time that Ross Rojek's lawsuit against Marvel was dismissed. Marvel Comics filed for Chapter 11 bankruptcy on December 11, and on February 7, 1997 Diamond announced that it would again be distributing their comics. Heroes World was history; for the next few years, Marvel would be far too busy fighting a messy and protracted battle with competing shareholders to be operating its own distributor.

The comic book industry has been crawling slowly from the wreckage ever since.

On the 23rd of last month, current Marvel COO Bill Jemas attempted to defend his company's policy of no longer fulfilling re-orders on new books by claiming that A) it was better for Marvel's bottom line and B) that it would stimulate the moribund speculator's market, which would C) benefit forward-thinking retailers.

Bill Jemas is full of shit, and he's full of shit for the following reasons:

• The policy is only better for Marvel's bottom line to the extent that the initial sell-through makes Marvel look better to both current investors and companies interested in buying out Marvel and giving it the same kind of safe-haven DC enjoys from AOL-Time-Warner. As recent sales figures show, once re-orders are factored into the equation DC Comics actually holds a slim lead over Marvel in overall dollars earned. If this is Jemas' definition of "better," I'd be interested in seeing what his definition of "worse" looks like.

• The policy will only stimulate speculation to the extent that it's possible to convince teenage boys that tens of thousands of comics, all hoarded away by collectors, will ever accrue in value. Anyone with half a brain in their head can see the flaw in this logic. Anyone who lived through the last two speculator bubbles can see where all this is headed. You did read this far down, right?

• Even if the speculators' market is again kick-started into existence, the reader demand necessary to drive up prices has a new damper preventing it from increasing the way it did in times past: graphic-novel collections. Say you're a reader wishing to collect earlier stories from your favorite title. In times past your only option was to buy expensive back issues, but nowadays you've got a second choice: buy the book instead. If the back issues cost substantially more than the book, which option are you going to choose? Moreover: with a brake like this applied to the speculator market, can anyone seriously forsee the value of said back issues significantly rising past the cost of a softcover collection? This is what I meant when I said earlier that I thought the speculators' market was a bygone era -- with a second alternative available, the only people speculators can realistically sell their "investments" to are other speculators. Something of a closed loop, don't you agree?

• The policy makes comics retailing even more of a crapshoot than it already is; by forcing retailers to gamble on increased inventory rather than on what their experience tells them will be the maximum point of sell-through sales, Jemas is asking retailers to sit on an increasing backstock in order to improve Marvel's own financial fortunes. Eventually that backstock will pile up to the point where the retailers' ability to invest in new merchandise will be compromised by the capital already tied up in inventory. This has happened before. Twice.

Marvel's "no re-orders" policy, coupled with the proliferation of titles we've seen coming out of Marvel over the past few years, represents a cheap and sleazy attempt to recapture long-lost market-share by forcing retailers to buy more heavily into an ever-increasing array of titles. By printing more titles per month, Marvel undoubtedly hopes to squeeze some competition from other superhero publishers off the shelves. By eliminating re-orders, Marvel undoubtedly hopes to tie up money that might otherwise have gone to their direct competitors, which further squeezes them out of the game. The notion that this policy is in place for the benefit of the retailers is ridiculous -- the only people who stand to benefit from such moves are Marvel Comics and their investors. Even then, this policy actually screws Marvel in the long-term by adding instability to the very market Marvel depends upon to sell the bulk of their wares. If comics shops again start going belly-up in large quantities, Marvel loses retail outlets they'll still be needing years down the road.

Every rationale Marvel has offered so far in justification of its "no re-orders" policy is demonstrably insane. It's easy to see why they're presumably doing it, of course: if I were forced to earn eight dollars for every buck I actually got to keep, I might be tempted to toss my concern for the long-term health of the direct sales market out the window, too. The notion that retailers should actually go along with this cockamamie policy, though, is madness of the first caliber. Retailers: you've seen before what speculation does to the market. You've seen before what happens when one company gains enough power to dictate the terms of the marketplace. Why would you possibly want to fall for this idiocy again?

As a young man, I witnessed firsthand what undue reliance on a speculators' market will inevitably do to a comic book store. You don't want what happened to Fog Hollow to happen to your store. Say no to dubious speculator pyramid schemes. Say no to shortsighted corporate greed at your expense. Say yes to stable, sensible growth. Say yes to a market where the person with the most say in your business plan is you, not Bill Jemas.

The lessons of history are obvious. Ignore them at your peril.