Home News Business News Steve Geppi’s debt woes growing

Steve Geppi’s debt woes growing


In recent weeks, while news of Diamond’s new trade policies has rippled through every level of the comics business, Diamond’s owner, Stephen Geppi, has also been hit with several lawsuits for outstanding debts. While Geppi’s various business interests, including the Geppi Entertainment Museum and Gemstone Publishing , are all separate corporations, the overall picture of debt that emerges is an uncomfortable one for the comics industry.

In one link being widely circulated this morning, court documents reveal that California debt collection agency Creditors Trade Association is suing Gemstone, Diamond, and Geppi for $373,000.00 on behalf of Global Interprint, the print broker for many of Gemstone’s deluxe editions. According to court documents, Gemstone owes the money for the printing bills on such books as Hopalong Cassidy, EC Archives, Frontline Combat, and Haunt of Fear. The bills were run up between December 2007 and September 2008, with none of the monies being paid.

According to another link posted by Rich Johnston on Monday, a “confessed judgment” has been ruled against Geppi in a case involving a $16,466,205.32 debt to P N C Bank. According to one legal expert we checked with, a confessed judgment involves a situation where a debtor signed a written document providing that if specified payment was not made, a judgment could be entered against him for the remaining amount. Although the case is listed as closed, Geppi will have a chance to make further legal motions in a hearing set for March 26th. Unfortunately, the court documents in the case are not online, so no further information on the nature of the debt is readily available. Neither Diamond nor Gemstone is named in this case, at least according to the documents online.

Adding to Geppi’s woes, his entertainment museum has been losing money and has run up a sizable unpaid rent bill as of September:

Geppi’s Entertainment Museum, founded in September 2006 by Diamond Comic Distributors CEO Steve Geppi, is more than $700,000 in debt. Maryland’s Daily Record reports the Baltimore pop-culture museum has accrued about $622,500 in unpaid rent to the Maryland Stadium Authority, and owes more than $77,000 in late fees and unpaid electric bills dating back to February 2007.

According to a report on ICv2, a rent settlement had been negotiated for payment by last December.

In looking at the big picture, the debts mentioned above are all separate from Diamond’s distribution business (although Diamond is named in the Global Interprint suit), but obviously if Steve Geppi can’t pay his bills, something has to give. It certainly puts all of Diamond’s recent cost cutting measures — new trade terms, layoffs and so on — into a new light.


  1. http://www.washingtontimes.com/news/2008/nov/25/stadium-authority-forgives-3-million-in-back-rent/

    “Stadium Authority forgives $3 million in back rent”

    This article includes the Baltimore Orioles, but also the two museums nearby, which pay rent to the MSA.

    Sports fans will note the abysmal performance of the O’s in recent years, as well as regional competition from the Washington Nationals.

    So, what does the Gemstone bill mean for their publishing schedule? Will we never see an English-text collection of Don Rosa’s work?

    And might this augur the implementation of the DC Doomsday clause, or possible sale to another entity?

  2. Does DC still retain an exclusive right, or right of first refusal, to purchase Diamond? I recall that there was a clause of some sort along those lines in the first Diamond-DC exclusivity deal, but I’m hazy on the specifics and whether those terms were renewed.

  3. Mmmm… From what I can tell, DC has until 2011 to decide whether to buy Diamond… Time-Warner might just pony up the dough, just to keep their uber-profitable DC merch licensing up…

    Comics Journal did a piece on it several years ago. The relevant DC discussion memo is here.

    And Lord, please let my meager HTML coding work right ;)

  4. Funny thing is, that judgment for $16.4 mil came down two weeks before Diamond ratcheted up its minimums and let 13 people go. Didn’t he also put what can only be described as his mansion on the market a few months back too?

    Anyhow, interesting times.

  5. I don’t think it’s possible for DC Comics to buy and operate Diamond Distributors without an uprising by Marvel, Dark Horse, Image and other publishers.

    However, I thinks it’s possible for DC Comics to buy and flip Diamond to a book distributor such as Hachette or Random House. Because Diamond distributes Marvel, Dark Horse and other publishers in the book market, it makes the company an attractive acquisition [moreso a couple of years ago when manga was really hot].

    The other consideration is inheritance tax consequences for the Geppi family. A sale of Diamond could be structured to benefit the Geppi tax-wise.

  6. “Hopalong Cassidy, EC Archives, Frontline Combat, and Haunt of Fear.”

    Hmm… who knew building a business based on printing books that only a handful of 40 year old men would buy wasn’t a great decision….

  7. I think perhaps it’s time for Steve to starting pawning off some of his baseball card collection just like when I have to go to Amoeba Records every so often to trade in some of my extensive prog rock CD collection just to help with rent.

    Sacrifices have to be made.



  8. And we are one-step closer to the digital age of comics. As one Great Depression ushered in the newsstand explosion of the comic book, the modern day equivalent will most likely kill it. It’s only a matter of time now.

    A digital download site with the option of print-on-demand is the future. It’s just that no one has yet been able to put all the pieces together into a workable model.

  9. If Marvel attempted to complain about DC having any oppurtunity to own Diamond the answer is two words:

    Heroes’s World

    Marvel attempted it. They failed. Now it would logically be DC’s turn. However I’m sure they’d make sure what everyone needed to feel secure would be taken into account.

    After all, DC LIKES retailers. Its Marvel that acts like they’re the unwanted stepchild.

  10. DC distributed Marvel titles in the 1960s. At the time, Marvel was limited to eight titles.

    During the nascent 1980s, Marvel was distributed by Publishers Group West. Later, they were with Client Distribution Services briefly, and then with Diamond.

    If DC acquires Diamond, the exclusive distribution can go elsewhere, just as it can do now. Granted, Diamond Books has the expertise to distribute graphic novels to bookstores as it does now, and that might convince some publishers to stay, ESPECIALLY if flipped to a powerhouse like Random, which has experience distributing publishers it does not own (Shambhala, DC, Titan, Vertical, Egmont USA…)

    However, what of Diamond Comics? That’s more of a magazine distribution model (albeit one-way). Perhaps that could be sold off to a hedge fund or private investor. (Great Shades of Perelman!)

    If DC does not intend to implement that clause, could Geppi then sell the business to another entity, pay off his obligations, and then retire?

  11. Evan, a difference in degree: Marvel had no intention of distributing anyone else’s product at all with Heroes World. They simply took their own books out of the direct market system that existed. Had they kept selling others’ titles at Heroes World, then the situation would have been more complicated — as evidenced by the (final) International Association of Direct Distributors meeting that year, when I understand that DC did not make a sales presentation because Heroes World was one of the distributors in the room. That was before it was known for sure that HW would be dropping all others’ titles.

    From that experience, I would expect a competing publisher in that case would want to know there were firewalls between what the distributor knew, and what the distributor’s sister or parent publishing company knew, about the sales and plans of the publisher it’s handling. There are a number of industries with relationships like that — TV is particularly complicated.

    Torsten’s right about the distribution situation in the 1960s — would be ironic if history circled around like that.

  12. With regards to Torsten’s concern, “However, what of Diamond Comics? That’s more of a magazine distribution model (albeit one-way). Perhaps that could be sold off to a hedge fund or private investor. (Great Shades of Perelman!)”

    I don’t think a book distributor would get rid of the direct market portion of Diamond if the business was flipped, as the orders/sales are guaranteed, and very different from the magazine distribution model. If anything, the book market is moving towards the direct market model with non-returnable printings. The Direct Market Model is guaranteed money.

    Plus if a book distributor bought Diamond, there hopefully should be savings due the consolidation of back-office operations and the distribution system. The operations of Hachette and Random House are more sophisticated than those of Diamond.

  13. Nobody has done more in recent years for the comics industry than Steve Geppi. Where would Marvel and DC be today without his wisdom and Diamond’s expertise in comic book distribution? George T. Delacorte (Dell), whom had the most extensive comic books distribution network in USA history failed in 1960-61 and Western Publishing suddenly found themselves on their own with multiple independent distributors ripping them off at every chance. Had Steve Geppi appeared on the scene ten years before with Diamond, chances are there would still be a “Gold Key” comics line on the shelves today. Think about that.

    How many comic book store retailers went out of business in the past few years owing Diamond bookoo bucks? How about the chain bookstores which can sometimes run up bills in the millions..? Are they “current” with Diamond–I seriously doubt it.

    Nobody predicted this terrible economy and/or coming double-digit unemployment rate and the devastated real estate market — which has ruined banks and investors alike. It’s well publicized on the www that Steve Geppi invested in that real estate market and got taken like many others; but he also invested millions to develop GEM (Geppi’s Entertainment Museum) in Baltimore, MD, which is a tribute like no other ever was or ever will be made to the Comic Book profession–and at an expense like no other.

    There’s no bail-out funds headed for Steve Geppi, but perhaps there should be. If we lose Comic Books (an American invention) we lose an important part of our chidren’s and grandchildren’s heritage. At the least those who stiffed (and are stiffing) Diamond should pony up. I imagine a lot of flak headed my way for this post, but let it come. I helped to found FANDOM some 40 years ago and my gut feeling is that we should pull together now and offer Steve Geppi all the good will and support that we possibly can to help him get past his time of trouble — OUR TIME OF TROUBLE.

  14. So no one seems to be talking about the smaller independents; how will this affect IDW or BOOM! or Alias? There are some really good small publishers right now.

    Terry Moore’s numbers on Echo might not even be good enough to weather this, for example.

    I mean, the interesting thing about comics these days is the diversity is really great and the audience is probably larger than it has been in a while. The quality, too, is up and I would hate to think that all of this can go away overnight.

    Man, things are tough all over.

  15. So does the Geppi mean that there won’t be anymore exclusive publishing being done with them anymore? I mean because that was so important then.. I mean, 30 years ago…

    I mean… I dunno… Blame the cost of Disney comics…

  16. Sounds like Diamond’s gonna have to get into movie production. It’s all the rage!
    Perhaps they can negotiate their way into future movies based upon some form of a survival contract. Either with other studios or co-op a new studio for the quick(if successful)movie money payoff. Divest some of its holdings and reform as a production company separate from Diamond but fiscally allied.
    Diamond is often the frontline when it comes to distributing and promoting independent comics-comics that now seem to find their way to film with greater frequency.
    Diamond is an American icon and deserving of government bailout. Too many nof us are dependent on Diamond and any shake-up in distribution could be the end of many stores.

  17. maybe someone should also look into the link between Diamond not paying publishers on time, which in effect means that creators of the comics they are distributing are going unpaid, or being paid late in many cases ;) Seems that one of the end results of Geppi’s debt problems is that even more people than just creators are the ones being screwed over now.

  18. Christian’s post makes a valuable point, there’s really no market (thank goodness!) for Hopalong Cassidy reprints. But I hope Fanboy Menace is wrong about internet publishing becoming the standard format for the future, whether for comics, magazines or newspapers (although this would make sense for reprints of limited interest material like Hopalong, I guess).

  19. Stephen G. is in a lot of hot water…

    Diamond is a business that distributes comics pretty much all over the world…

    The market is pegged between 30 and 50 million in total sales in North America… (low estimate)…

    That means that Diamond – which gets to keep about 10% of that – makes between 3 and 5 million a year… (plus of course more from toys and books, but supposedly it isn’t much more than that since there are other distributors of toys and books that do it better…) so… lets say Diamond makes $5M a year… they have several facilities, and about 50 employees… which can cost (on average) almost 100k per employee (after salaries and benefits and all other costs related to publish Previews, marketing etc etc etc)… so they pretty much might even run close to zero net income… and if we know they suffered a 4% dip in sales… and they run close to zero net income… that all of a sudden means a 4% LOSS… which is .04x50M = 200,000 loss…

    We also know that Steve lost lots of his retirement fund in real estate (with about 16Million in total mortgage loans that remain unattended to but would represent about 90k a MONTH in mortgage payments)… and we know he owed 373k to printers via Gemstone… and we know that he had about 900k in back rent for the museum… etc etc… let’s summarize…

    – 90k / mo = 1 Million a year in mortgage payments not being made (up to)
    – 200,000 loss from Diamond
    – 373,000 loss from Gemstone (minimum – that is the creditor we KNOW he hasn’t paid)
    – 900,000 loss from the Museum (that is another creditor we KNOW he hasn’t paid) and probably no real end in sight for being able to keep paying this shortfall…

    So, from a cash flow point of view, he MIGHT be short in 2008 something in the range of $2Million… now, which asset does ANYONE think he can borrow that much of a SHORTFALL from EACH YEAR until the comic market increases (doubtful), the real estate market turnsaround (not this year) and/or the museum sees full occupancy (not until the economy recovers)…

    How many years can YOU run with a $2Million short fall each year?

    So, if he negotiates out of the Museum… hands it over to the stadium… that is gone… and if he trims the fat from the product list at Diamond… he can fire 13 people (as he did) and save somewhere between 300k and 1M a year in cash flow costs (he can reduce a lot of the other costs like space rent, and other overhead in quite the short run as the head count can do)… but that means he still has to come up with another 500k or so…

    from my assessment (which I hope you can tell is VERY rough, is not to be considered investment advice nor a thorough analysis) but really shows the tough times that Steve seems to have in front of him… when at one point he was doing well (probably making 3Million a year in profits, now a $2Million loss)…

    Can he sell Diamond at a profit? If it is (now post thinning) breaking even again, he might get several 100k for the once proud company… (based on a low multiple of net income)… that isn’t enough for him to retire on well…

    Best of luck to Steve (and whomever advisors he has) to help him out of this… and ensure that comic book fans can still get their wednesday dose of Spider-Man and Justice League before the entire direct sales market craps out…


  20. Steve Geppi Will Overcome His Debt Problems; Re: Dean Burns’ 4/21/09 Posting: “Stephen G. is in a lot of hot water”

    Interesting assessment, Dean, but not even close to the mark. The Baltimore Orioles net worth was last reported as $500,000,000 in 2008 with their new cable tv contracts, etc.. Steve owns 5% of the Orioles free and clear. Acc. to my figures that makes his interest worth about $25,000,000, which is almost double his “reported debt load”.

    Steve’s personal comic and memorabilia collection (gathered over 25 years or more) is perhaps worth $50,000,000. Am I guessing here? Hardly–I’m one of the privileged few that’s been inside the Geppi Vault. Imagine picking up a short magazine box of CGC-slabbed Golden Age Key Super Hero issues worth about a cool 2 million–and that’s just one box!

    As to Gemstone’s woes: Disney drove such a hard bargain with Gladstone (Bruce Hamilton), that he stopped publishing the line. Steve Geppi picked it up for his love of the “Ducks” knowing full well that it would probably be a money-losing proposition for years to come–but Steve wanted to see Donald, Huey, Duey, Louie and Uncle Scrooge return home from Europe to the good old USA in triumph. Folly or not — fifty years from now when the Gemstone issues are bringing a thousand dollars a copy (or more) Steve’s publishing contributions will be remembered with gratitude.

    One thing I will agree with you, Dean: Steve may be losing $2 million a year right now, especially with the real estate market crash, and that means if Steve doesn’t turn things around–he’s going to go broke in 30 or 35 years…

  21. The Baltimore Orioles net worth was last reported as $500,000,000 in 2008 with their new cable tv contracts, etc..

    A 4/16/08 Forbes.com piece, “The Business of Baseball,” put the value of the Baltimore Orioles at $398 million.


  22. RE: A 4/16/08 Forbes.com piece, “The Business of Baseball,” put the value of the Baltimore Orioles at $398 million.

    The cable deal with Comcast occurred in late 2008 and has not yet been taken into acount or listed by Forbes. In any event, 5% of 398 mil is 19.9 mil, still more than Mr. Geppi’s reported debt issues.

  23. According to Forbes, the current value of the Baltimore Orioles is $400 million. Having assets estimated to be worth “x” dollars is nice, of course, but solid assets aren’t of that much use when debt payments are required.


  24. Forbes is giving an estimate/appraisal is all. Other more direct sources (confidential) place the team’s value since the new cable contract at 500 mil+.
    Solid assets are useful for acquiring loans to pay off debts and avoid bankruptcy. Amazing how a “trumped up” 16 mil real estate market crash debt to a bank just might be lowered to 10 cents on the dollar when there’s cold hard cash to be had. Hey, Synsidar! Would it disappoint you if Steve Geppi pulls thru his financial fiasco? Sounds like it.

  25. i am an employee for diamond comics distrubution in ms. the work situation is horrible. temp to hire starts out at 7.25 an hour. just in the last month police have been at the work place twice with people fighting. no air conditioning, very few fans, no water coolers on the floor. so it must be great to be mr geppi and live very comfortably while others suffer.

  26. I say most of this stuff is crap and politics. I don’t see Geppi going anywhere or those suits having much merit. Show me the facts.

  27. All I can say is, it couldnt happen to a nicer person than Steve (Let me screw you and manipulate the Market) Geppi…and yes I to have been thru his museum and his private collection….been an insider for many many years…interesting to see how Geppi manipulayed prices and the market with his cronies….good to see him fall….maybe criminal legal action can come next

  28. Is there any truth in the rumour that Steve Geppi & Steve Bisciotti are considering buying Crystal Palace FC (a Championship team from the UK) and their sister club, CPFC USA?

  29. If you don’t know Steve personally and how nice and kind and down to earth person he is, please don’t wish him bad luck in his time of some hardships.. I have known him for years and you should hope that you could be such a person.. Please pray for a comeback for him and we will see his kindness be spread around as it had been so often in the past.. Bless you Steve…

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