Yet another comics publisher revealed itself to have been critically wounded bylast year's failure of a major distributor to the book trade, when Fantagraphics(publisher of The Comics Journal) announced May 29 that it was close to shuttingdown. The publisher said it was reeling from the one-two punch of loss of incomefrom its bankrupt former distributor and increasing expenses due to overprintingfor the bookstore market.

The seriousness of the problem had been brought home at Fantagraphics a weekearlier, as four of its 30 employees were laid off and a fifth quit in protest ofwhat she called the company's "disorganization and poor management." The layoffswere intended to rein in payroll costs that had grown out of control as a resultof generous raise policies over the years, but a review of the company's financesthe following week revealed that a cash-flow crisis was much more imminent thanhad been suspected.

On May 29, publishers Gary Groth and Kim Thompson swallowed their pride and senta mass e-mail to two dozen Web sites known for disseminating comics-relatedinformation, as well as subscribers of Fantagraphics' regular promotionalnewsletter. Under the subject heading "Fantagraphics Books Needs Your Help," thee-mail announcement explained, "Due to two major financial obstacles over thelast two years, we're hard against it. Our former and now bankrupt book tradedistributor went out of business owing us over $70,000 -- which we will never see.(To add insult to injury, we learned that the owner is selling copies of ourbooks that he should've returned on e-bay!) This unexpected shortfallnecessitated taking out a couple loans which have now come due. In late 2001, ourline was picked up by the W.W. Norton Company, who took over our bookstoredistribution, and has done a magnificent job of providing us unprecedented accessto the bookstore market. Inexperience with the book trade resulted in our erringon the side of overprinting our books too heavily throughout 2002, so that ouranticipated profit is in fact sitting in our warehouse in the form of books.Loans must be paid in cash, not books. The only way to get out of this hole we'vedug ourselves into is to sell those books. Which is where, we hope, you come in.

"Over the last few weeks, we've worked to fix our in-house problems (whichincluded, most painfully, laying off several fine and long-term employees). Wehave put in place a system of checks and balances by which we will watch ourinventory growth scrupulously. But we have a debt to pay down and wolves at thedoor. It's so severe that this month we envisaged shutting down our activepublishing, seeking outside investors or similarly odious measures.(Fantagraphics continues to be owned 100% by Messrs. Gary Groth and Kim Thompson.We'd like it to remain that way.) If you've respected what Fantagraphics standsfor and what we've done for the medium, if you've enjoyed our books, and if youwant to insure that this proud tradition continues into this new and ominouscentury, we're asking you to help us now in our especial hour of need by buyingsome books. Put simply, we need to raise about $80,000 above our usual sales overthe next month, and the only way to do that is to convert books into cash."

If both the dilemma and the appeal to the alternative comics community forsalvation seem familiar, it's probably because last year at about this time, theJournal was reporting a nearly identical series of events involving Top ShelfBooks. (See "LPC's Chapter 11 and Top Shelf's Near Death Experience," TCJ #243.)The cash assets of LPC, Top Shelf's distributor to the book trade, had beenseized without warning by LPC's bank, leaving Top Shelf with bouncing checks anda $20,000 shortfall. Consumers were mobilized to place so many direct-mail ordersthrough Top Shelf that the tottering small-press publisher's shortfall waseliminated literally overnight.

In the Internet message-board discussions that followed, some attributed TopShelf's near-miraculous recovery to the schmoozing and networking abilities ofChris Staros and Brent Warnock, who together make up the management and staff ofTop Shelf. The company is so small that volunteers had to be recruited to helpfulfill orders. Some questioned whether the same community would come to therescue of a company like Fantagraphics, which had alienated many in the industryvia the Journal's iconoclastic editorial stance. Fantagraphics' e-mail plea putthe question to the test.

As word spread through the fan community, some commented on message boards thatFantagraphics was merely suffering the just deserts of its own hubris, predictingthat the publisher had such a reputation for narrow-minded snobbery and brutalcriticism that comics readers would not lift a finger to keep it from sinking.Others, loyal to capitalism's Invisible Hand, seemed offended that Fantagraphicsshould try to circumvent the economic judgment of the marketplace by appealing tothe comics-reading community for support.

In Fantagraphics' favor was a solid line of important, award-winning books. Evencreators whose work in the mainstream had often been savaged or ignored in thepages of the Journal made public statements of support for the publisher. WriterWarren Ellis notified the recipients of his e-mail list of Fantagraphics' needfor emergency book orders, just as he had for Top Shelf a year earlier. Groth hadoffered in his e-mail plea to make a personal thank-you call to anyone who placedan order of $500 or more, and writer Neil Gaiman offered to make such callshimself to anyone who preferred to receive an expression of gratitude from thecreator of DC/Vertigo's Sandman. Cartoonist Art Spiegelman, whose Little Lit hadbeen sharply criticized in the Journal, offered to provide the company with apiece of original art to auction on eBay. Cartoonist Scott McCloud, cartoonistSteve Lieber and publisher Jeff Mason, whose works had received mixed reviews inthe Journal, all helped to rally supporters to Fantagraphics' aid.

Chris Ware donated a page of original art that went for $2,864 on eBay, and TonyMillionaire donated original Sock Monkey cover art that sold for $465. Bluelineproofs of Fantagraphics comics were also auctioned on eBay, including R. Crumb'sMystic Funnies #3 (which went for $220), Spain Rodriguez's Nightmare Alley($149), Jason's Hey, Wait... ($100) and the Hernandez Brothers' Love and RocketsVol. 2 #5 along with color film of the cover ($100).

Even celebrity comedy and rock performers outside the comics field offered to puton benefit concerts for Fantagraphics, but Fanta Marketing Director Eric Reynoldssaid, "I'm just not comfortable planning something like that when I don't knowquite how financially desperate we are at this point. I'd prefer to avoid charityas much as possible."

Top Shelf, which normally sold all its books at conventions and throughdistributors to comics shops and bookstores, had been unaccustomed to direct mailorders and went out of its way to encourage customers to return to buying fromretailers once the publisher's crisis was over. Fantagraphics, by contrast,already had longstanding phone, mail and e-mail sales operations set up and wasbetter equipped to handle the flood of orders that came in response to its pleafor help. Groth said it hadn't occurred to him or Thompson to appeal to retailersfor additional orders, figuring that retailers are generally in the sameone-check-ahead-of-creditors condition that Fantagraphics was in. It also didn'toccur to Groth or Thompson -- as it had to Staros, the networker extraordinaire --to include a diplomatic statement about the importance of patronizing retailersin their mass e-mail. But if retailers were upset at being circumvented byFantagraphics' fundraising efforts, there was little sign of it. Several postedonline statements of support for the publisher.

By and large, detractors were drowned out by a chorus of Fantagraphics boosters.Orders poured in at a rate faster than the company could immediately process. Atpress time, more than a dozen customers had taken Groth up on his promise topersonally thank purchasers of $500 or more worth of books. In addition, Gaimanalso made thank-you calls, as promised, to seven or eight customers who met orexceeded the $500 mark. Within a week, the publisher had raised $80,000, theamount it had identified as its immediate shortfall, and a second mass e-mail wassent to announce the good news and thank the company's many benefactors:

"We have been awed and humbled by the voluminous response to our open letter ofMay 29, and want to thank everyone who spread the word, beat the drums on ourbehalf, endorsed our efforts, supported us, and defended us against our few butvociferous detractors. We are pleased -- and relieved -- to announce that wereached our immediate goal by the end of the work day on Friday, June 6. We havemoved from depression to elation to a state of dizzying exhaustion over thecourse of that long, frenzied week."

The e-mail went on to report, however, that, while the windfall of orders hadmade it possible for the company to satisfy its most demanding creditors, someFantagraphics creators were still waiting for overdue royalties: "It's no secretthat over the course of 27 years of publishing The Comics Journal and 22 years ofpublishing comics, we've been woefully undercapitalized and have more often thannot relied upon the patience, if not the kindness, of our authors, to weatherdifficult periods. Our cartoonists have stuck with us through thick and thin (andvice-versa, of course), many of them for 10, 15, 20 years now, and although wefirmly believe we'll catch up in due time, we consider it an imperative to catchup sooner rather than later. The more books we sell now, the faster we can catchup on royalties to our authors."

Some critics objected that it was manipulative of Fantagraphics to solicit ordersin support of its endangered publications and then to hold up the still unpaidcreators of those books as a lure for further orders. In response to thiscriticism, Groth told the Journal, "We have for as long as I can remember livedthrough cycles of falling behind and catching up on royalties to our cartoonists.It's absolutely true that at the time this crisis hit us we were behind on someof our royalty payments and we felt that we may as well let people know this at atime when they were most acutely aware of our difficulties. We were in a slightlyodd position. We didn't want to tell people that everything was hunky-dory,because it wasn't. On the other hand, we emphasized that we felt we could catchup on our remaining debts over time and that the emergency nature of oursituation was over. I think that was a fair and honest appraisal of ourcircumstances."

Fantagraphics' Future

How real can a recovery be that is founded on a one-week buying binge by loyalconsumers? The most obvious risk is that the readers who make up Fantagraphics'customer base have simply concentrated their purchases into a tiny time span andwill now be sated for the next several months. There is strong evidence, however,that that is not the case. Some customers have indicated that they were buyingbooks that they wouldn't have otherwise bought to give as gifts or donations tolibraries. According to Groth, the numbers show that 50 percent of the new ordersare from people who had never ordered from Fantagraphics, which suggests that thepublicity around the crisis has allowed the company to genuinely expand itscustomer base. Groth is also confident that the strength of upcoming books willcontinue to coax new orders, as well as sales through retailers.

One has only to look to Top Shelf for a test case of the long-term effects ofsuch short-term fundraising. Staros told the Journal, "We didn't see sales dropoff drastically. We saw them return to normal but not below normal."

Asked how the small publisher is doing a year after its crisis, Staros said,"Same old same old. Struggling as always." But this, at least, is the kind ofstruggle the company is accustomed to and not the edge of the abyss thatprecipitated its e-mail plea. Top Shelf's release schedule since its near-deathexperience has been modest, but Staros has high hopes for the summer with booksby Craig Thompson and Alan Moore scheduled to hit stores.

Like Fantagraphics, Top Shelf routinely overprints but, unlike Fantagraphics,limits the practice to its best-bet frontlist books, which are assured ofeventual sales. Staros said Top Shelf's new distributor to the book trade,Diamond, "is doing fantastic."

Drawn and Quarterly is also pleased with its new distributor to the book trade,Chronicle Books, but according to publisher Chris Oliveros, the company is notdoing very well for reasons similar to those plaguing Fantagraphics. "Basedpartly on the high expectations of Chronicle," Oliveros told the Journal, D&Qoverprinted its collection of Crumb restaurant place-mat art, the first D&Q bookdistributed by Chronicle. Sales were much slower than expected and Oliveros saidhe "put the brakes on for later books. I saw we would be bankrupt in six monthsif we kept overprinting other books. Since then we've been more realistic." Askedif he had put the brakes on in time to prevent a serious cash-flow pinch,Oliveros said, "No, I didn't. It was a serious blow, the biggest loss by far thatwe've ever had."

Groth is not so sanguine as to see the bailout by supportive Fantagraphicscustomers as a magic solution to all problems facing the publisher or theindustry. In fact, some of those problems are bigger than the industry. Asked toforecast a worst-case scenario, Groth said it was hard to overestimate such ascenario "with Bush at the helm and unemployment the highest it's been in nineyears." Assuming, however, that we don't all end up huddled in bomb shelters withour duct tape and canned goods and burning Dixie Chicks CDs for warmth, Groth wasable to foresee a best-case scenario bright enough for him to segue into acommercial for new releases: "Best-case scenario? We flourish. The Will Elderbook kicks ass. Readers snatch up The Pirates and the Mouse...."

The Impossible Dream

The publisher has alternated between flourishing and nearly perishing over theyears. It would have been out of business as long ago as 1978 if Kim Thompsonhadn't poured his inheritance into the company's survival. In 1991, Fantagraphicswas saved from closing its doors by the launching of its relatively lucrativeerotic comics line. As recently as 1998, the company was forced into a round oflayoffs. "It was a permutation of the same problem we've just had," Groth said,"except instead of printing too many copies of a title, we had too many titles.There was a year where we released more books and took in more cash than theprevious year, but we made less profit. We had thought we could make up for lackof profit with volume, but it doesn't work that way."

If Groth's best-case scenario comes to pass, it will be not just a miracle, butthe continuation of a long-running miracle. If nothing else, the current crisishas served as a reminder of how important that miracle is to the ongoingaesthetic potential of the comics medium. Message-board skeptics made theseemingly reasonable point that if Fantagraphics folded up tomorrow, thatwouldn't mean that cartoonists like R. Crumb, Chris Ware, Dan Clowes, CharlesBurns, the Hernandez Brothers, et al., would vanish from the face of the Earth.Surely their work would simply be put out by other publishers. Message boardposts from some of those "other publishers," however, made it clear thatcompanies like Alternative Comics, Drawn and Quarterly, Top Shelf and HighwaterBooks were already stretched to the limit of their meager resources. Even Grothwas shocked to realize what an anomalous, if not impossible, phenomenonFantagraphics represented.

"During the message board discussions, I was surprised to realize that severalposters -- [Alternative Comics'] Jeff Mason among them, I think -- were absolutelyright that our books couldn't be absorbed by all the other alt/indy publisherscombined. D&Q probably publishes five books a year and fewer than one comic amonth. Top Shelf cranks the stuff out but eventually they're going to need astaff. Highwater's lucky to publish something every six months and Alternativebecomes dormant for months at a time. As best I can determine, Fantagraphics isthe only alt/indy comics publisher that's a real business to have stayed inbusiness over the years. The only ones who've survived and who are alive are allone- and two-man operations with no overhead. All the ones in the past that werereal businesses with employees, payrolls, office space, health care, etc. aredead. This would include Kitchen Sink, Pacific, Eclipse, First. I think thereason for this is fairly obvious: the economy of scale can't sustain a realbusiness. The cost of our health insurance alone is probably a quarter of D&Q'sentire annual operating budget! (There's Dark Horse, but they're sort of in thepost-indy scene and sustain themselves by essentially being a commercialpublisher with movie licenses.) We've survived by devising a thicket ofrevenue-generating areas: porn, mail order combined with the comics market andthe book trade. If we published the Journal and two comics a month and six booksa year, we could probably make do with me, Kim and a couple of part-timers.(Believe me, we've thought about this option.)"

If growth in the area of alternative comics has been limited by the budgets ofcomics-shop retailers and the small population of comics consumers, the promiseof the emergent bookstore market for graphic novels was that it would bring awhole new population of potential consumers and make real growth possible. Themost promising markets, however, are also the most treacherous, if the dot-comboom and bust and the comics industry's own speculator boom and bust are anythingto go by. To see the risks lurking in the still unsounded depths of the bookstoredemand for graphic novels one has only to look at the casualties andnear-casualties: the failure of both distributors and publishers to correctlycalibrate cash flow to the unfamiliar demands and opportunities of the booktrade.

In the context, it may be less ironic than inevitable that even a publisher thathad survived the worst that a shrinking market could throw at it came close tobeing put out of action by the promise of an expanding new market.

[To read the rest of this article, please see The ComicsJournal #254.]

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