The Lion Forge/Oni Press merger might just be the most comic book comic book industry story of the year. It has everything going for it that exemplifies the state of the industry today.
For starters: It’s not about comic book publishing.
It’s happened so fast that it’s almost head-spinning, but let me see if I can help you read between the lines, see the patterns, and recognize what’s going on. I have a couple of uncomfortable questions near the end to ask. I wonder how long the honeymoon period will last. And I think we’re seeing a generational shift in attitudes about the business of comics publishing.
Sit back, grab a drink, and let’s go over a few things.
Not The Merger You Think It Is
First of all, the two publishers are not merging. Polarity, a holding company that happens to own Lion Forge and a few other related and unrelated companies, just bought Oni Press. Their comics publishing operations will be merged for greater efficiencies, but so will those other arms of the two companies, including (most profitably) the ones aimed at Hollywood deal making.
This is a much bigger deal than two publishers deciding to share a roof.
Follow the money. Or, in the case of comics, the lack thereof…
Polarity is an important part of this story. Knowing full well that there is no money in comics, the two owners of Lion Forge — one previously worked in television animation and one worked in film production — are creating their own pipeline to control their IP from development to Hollywood production.
In the business vernacular, this is vertical integration.
Polarity is the holding company for those ventures. It’s like Alphabet is to Google.
They also like “pop culture.” Like how any good comic book convention slowly degrades into a “pop culture convention” because that’s where the money is, Polarity also manages a music label and Heidi McDonald’s ComicsBeat.com.
Naturally. Because Comics Journalism is where all the money is.
They also have a division that does custom comics for corporate customers. That’s not anything new: Marvel and DC both have those set-ups. But it also offers help in animation and video games. It’s good to dip your toes in those waters by servicing larger companies while you learn your way through, of course.
This kind of vertical integration is table stakes in the current industry landscape. It’s not enough to even have a partnership with a Hollywood producer anymore. Nowadays, you need to roll your own. You cannot start a publishing house and expect to survive unless your business plan includes the words “transmedia” and “intellectual property” in it somewhere. And you better cut out the middle man and have your own Hollywood middle man.
Oni’s Interactions with Hollywood
Oni set up an office in Hollywood in 2003. It was called “Closed on Mondays,” and was responsible for setting up “Scott Pilgrim” and “Atomic Blonde.”
It closed in 2015. And I kid you not — news of “Closed on Mondays”‘ closure came on a Monday. You can’t make this stuff up…
Its failure was explained away as being that old favorite, “creative differences,” specifically caused by the distance between Oni Press all the way up in Portland and the production company down in L.A.
(Slack was founded six years earlier in 2009. I’m not sure what the real problem was….)
In any case, the Oni mother ship in Portland absorbed those duties and set up an office by the name of “Oni Entertainment.” (Interestingly, the new ABC series, “Stumptown,” came to ABC Studios via the production company, The District, and not Oni Entertainment. Or did the press releases just leave them out accidentally?)
Oni as Lion Forge Imprint
Essentially, Lion Forge is buying Oni and then having Oni runs its comics company. If I had to guess, “Oni” will likely be the creator-owned imprint of Lion Forge. I’m sure someone at Lion Forge can turn the Oni logo into one of those circle icons you see above with little difficulty.
On the surface level of things, this merger makes sense. Lion Forge produces comics for all ages and for that “diverse” audience that everyone is aiming at today. They also have the Voltron license.
Oni does much of the same. They used to refer to themselves as serving the “real mainstream” with their variety of genres. And they publish “Rick and Morty” comics, too.
One might think the two corporate cultures would mesh well and the result might be a bigger and stronger publisher with an even broader array of titles, particularly with Oni adding their Limerence line of titles on top of everything Lion Forge already has on tap.
The Spaghetti Analogy Rears Its Ugly Head
Or is this just another case of Lion Forge throwing spaghetti against the wall to see what sticks?
In pursuit of its diversity mission statement, Lion Forge has created additional imprints for children’s books and middle grade comics and tabletop gaming comics and even bought a publisher specializing in translating European albums. (Magnetic Press is awesome, by the way. I highly recommend the “Love” series and “Ghost of Gaudi,” for starters.)
With Oni now, it also has a creator-owned lineup and a sex positive lineup of comics and more licensed comics and a relatively large back catalog going back 20 years.
Lion Forge has been throwing lots of things against the wall to see what might stick. Pick an age group, pick a publishing format and distributor, and they’ll make a book. Every time you turn around, they have a new initiative. Look at their website and you’ll see a smattering of everything.
It’s hard to find their focus. Worse, that kind of spread of titles requires lots of money. They’re funding different imprints that require different marketing tactics and go after different audiences with different creators and, usually, different editors.
Where will the money come to support all these lines when publishing, itself, barely pays the pills for most publishers? Are they just spreading their bets in the hopes that one finally pays off and covers all the others? Are they chasing trends, always one step behind?
Those bets don’t come cheap. The money is coming from the Hollywood pipeline, or perhaps the expectations of a robust Hollywood pipeline down the road.
This, of course, is the kind of thinking that’s killed other publishers in the past. Either the investors want to see a return on their investment at last or the cash flow dries up to the point where the owners can’t keep the company going. See, most notably, CrossGen.
A Couple Telling Quotes
You have to read this Forbes article from just a few days before the Oni purchase got announced. It fills in a lot of the gaps.
I love how it describes Polarity in the most Buzzword Bingo way you can imagine:
Last year, [David Stewart II] set up Polarity to extend that vision and ethic to the larger media landscape with an organization that can orchestrate content development, production and distribution across different channels.
Again, they’re setting up their IP pipeline. Make a comic, and push it through the system to make an animated series or a movie out of it. The end. Eventually, something might actually hit, and then they’ll grow their licensing department to handle all the third party merchandise.
One more telling quote:
The success of films like Black Panther has dispelled the myths that content featuring African-Americans doesn’t play worldwide, and we want to make sure that we develop those concepts with authenticity.”
They’re looking towards Hollywood. Making these comics isn’t to fix the comics world. It’s about looking ahead to converting them to Hollywood franchise opportunities.
It just so happens that Hollywood is particularly hungry today for the material they want to make. Strike while the iron is hot. That’s good business.
Also, there are known cases of producers in Hollywood suggesting that screenplay writers turn their unsold scripts into comics so that they can sell them as being “based on the graphic novel” later.
It’s an incestuous little circle that’s developed since the phrase “comic book movie” become a selling point instead of an embarrassment
The only people who hate it more than the comic readers who get stuck with failed-pitches-turned-comics are the screenwriters who have to jump through ridiculous hoops for the silliest of reasons.
Those are just the cute quotes from the article. Let’s get to the point of the article:
A Restructuring and a New Animation Studio
That Forbes article announce Lion Forge’s restructuring plan a few days before this Oni move. They started an animation studio. The co-founder with animation experience (and a father worth billions) moved over to head it up.
This is a situation which worked well for Travis Knight, head of Laika Studios and son of Nike’s co-founder, Phil Knight.
Again, there’s no money in comics. Look down the pipeline for the bigger goals.
My favorite quote from the Forbes pieces comes from Lion Forge founder, David Steward II, when talking about this new studio:
Steward said he is basing the new studio in St. Louis rather than the coasts to take advantage of the city’s heartland location. “St. Louis is the perfect place from a creative standpoint. You can find yourself in a bubble in LA or New York. If you want to be in touch with what’s going on in the country, the Midwest is the litmus test of what’s popular in broader sense.”
Two days later, all publishing of Lion Forge’s diverse titles moved to Portland.
He didn’t mention that keeping the animation studio in St. Louis would help the fledgling company because salaries are so much lower there than in L.A. or New York…
The New President
A new president of Polarity was also named. He comes from the world of “Private Equity” and a brief look at his LinkedIn account shows he has “well-rounded skills in areas of M&A [Mergers and Acquisitions].”
He describes Polarity as a “holding company and management platform to oversee investments and acquisitions.”
In other words: Cash infusion with an M&A guy! No wonder they could afford to buy another publisher a few days later. Discussions on the merger began a year ago, from all accounts, but don’t think for a second that those two announcements are unrelated.
Let Me Be Extremely Cynical For a Moment
“So many potential partnership conversations that we’ve had in the past were really focused on looking at us like an intellectual property farm,” Mr. Jones said. He added that he still had interest in other media ventures, but “at the end of the day, the mission is about publishing books.”
Famous last words. Stick a pin here and let’s re-read this in six or 12 months…
This reminds me of every tech company Google or Amazon has bought that had an accompanying press release from the founders about how their visions were in alignment and it was business as usual and the new owners trust them to do their thing.
Six months later, as soon as contractually possible, the founders run for the hills and the users are all complaining that the tech is ruined. Usually, that’s because the founders stuck around long enough for their stock options to vest and they don’t want to deal with their new overlords anymore.
Somehow, I doubt that’s a game plan when one small comics “publisher” buys another.
Things never work out the way press releases promise. I’m glad Oni and Lion Forge think their missions are lined up today, but by month six there will be strife. It’s inevitable. Study history.
This is how businesses work: After a merger, there are layoffs. It can be couched in whatever language they want to use, but the point of merging two companies is to gain greater efficiencies and be able to lower the overhead necessary to get the work done.
It’s not a judgment on the quality of work those employees were doing. It’s other factors that drive the decisions. It’s a matter of not having two people doing the same job.
I don’t have a list of all employees for both companies with their demographic breakdown. I’m not going to comment on whether they specifically targeted certain —
No, wait, I will. They can’t target people based on whatever demographic traits you think they did. It’s illegal and would cost them huge amounts of money and good will. They had lawyers to advise them on the state and local laws in St. Louis and Portland, I am sure. This was not an overnight deal.
Layoffs might just be the trickiest part of any merger. It goes beyond the numbers and affects lives and, yes, public perception of the company. It has to be handled both legally and socially.
I’m sure they very carefully followed their legal advice, no matter how ugly it got or how bad it looked. It’s how the job has to be done. It’s also why they can’t comment on those matters. Legally, that would be silly.
I know of one case at a company I was working at where layoffs happened. They had to lay off someone who was weeks away from retirement. They couldn’t make an exception for fear of being hit with a reverse age discrimination suit, I guess it would be. Likewise, Polarity couldn’t decide not to fire a certain person out of fear of a social media backlash because of, say, their racial or sexual identities.
There are people in p.r. who know how to deal with this stuff. They might have received counsel from them, too, and it was probably along the lines of, “Hunker down and let it blow over.”
That’s the way every business works. It stinks, it’s never easy, but it has to be done.
The trick is to do it once. Rip the Band-Aid off. Don’t have a second round, because then the remaining employees will all jump ship out of fear that they’ll get hit in a third round. That’s also usually a good sign of a failing company or one with such bad leadership that it’s doomed for a crash-and-burn.
Non-Disparagements and Non-Competes
Now, are non-disparagement and non-compete contracts a good idea? That’s a bit iffier. Non Compete clauses are outright illegal in California, for example, but are still allowed in almost all other states. And with Lion Forge and Oni, the cases would fall in Oregon and Missouri.
It looks like Oregon has a law that Non-Competes can only last up to 18 months, but can I be honest for a moment? What trade secrets does Oni Press have that they wouldn’t want to get out? If a creator wants to be loyal to their editor over their publisher, then you just laid off the wrong person and should live with the consequences.
Are you afraid that Image or Dark Horse or Fantagraphics is suddenly going to hire one of your laid off folks and copy your convention booth layout or learn how to spell check using a new on-line service they aren’t already using?
That’s just silly.
Non Competes in such a small industry as comics are a silly thing. They’re nothing but damaging to the people who have to operate under them. Though I would strongly urge those laid off from a comics company to take this opportunity to find a job in a more stable industry, which is me saying, “any other industry.” (Except maybe video games. That’s possibly a bigger business mess than the comics industry, with its issues compounded by having a lot more money flowing through it.)
This isn’t like the guy in charge of Coca-Cola’s product formulation suddenly taking a job at Pepsi, and “New Pepsi” debuting two months later with the same horrible chemical taste as Coca-Cola. This is a more creative industry. It’s hard to compete in the same ways.
The non-disparagement clauses, I get. They’re common on severance packages. There’s been some pushback against them, but they’re still common and legally enforceable.
Post-merger layoffs can be ugly things See, for example, everything that’s flared up from this one in the past week. The comics world used to be a small business world filled with creative types and free spirits. As it turns into big business to keep the Hollywood money flowing in, there are attitude adjustments that are hard to make.
It almost feels like a generational thing. Gone are the crazy wacky Mark Gruenwald days of the Marvel Bullpen. Here come the new corporate overlords — things have gotten so big now that they can’t ignore even the comics anymore. Look at all the changes at DC in recent years, between the move to Burbank to the change in leadership that lead to the “Batman: Damned” fiasco.
There are rules of big business that the people working in comics have never had to deal with before. They’re learning this hard way now, unfortunately.
The Uncomfortable Question, Part 1: Contracts
Oni Press deals a lot in and is best known for its creator-owned comics. (Think “Atomic Blonde”, “Scott Pilgrim”, “Whiteout”, or “Stumptown.”)
That’s a bit of a loaded term, though.
No doubt the Oni contract includes some language in favor of Oni getting first rights, at least, to look at properties for Hollywood development. It might even include things like video games and board games and more.
I imagine a lot of smart Oni creators are running their contracts past their lawyers now. Is there an “out” clause in case of new ownership? Are they worried that the new owners won’t pay attention to their property now that they have so many? Would they rather their property be developed for live action while Lion Forge seems very heavily animation-centered?
Worse, does this merger signal two weak companies trying one last desperate thing to stay afloat in a churning ocean of bigger publishers? Is it maybe a good idea to get out as soon as possible? (We’ll come back to this…)
There are all open questions. I don’t have the answers to them.
The Uncomfortable Question, Part 2: Politics
I don’t know how to put this delicately enough and avoid politics all together, so I’ll just say it: So many of the creators involved at Oni would self-identify as progressive and pro-labor and pro-diversity. Go look at their Twitter histories.
Are they now in the uncomfortable position of appearing to back up their publishers against the ex-employees of the company, many of whom have been raising a fuss on their way out the door, questioning the company’s commitment to diversity?
No wonder it’s all quiet in Portland for the past week….
Will we see any creators leave Oni in light of this move? I bet we will, but I also bet it will be months down the line when their contracts naturally expire and they choose to “explore other options” and nobody has to say anything bad about anyone else out in the open. This will be prime Bar Con material in the next couple of years.
But, then, I don’t know what the particulars of these contracts are. It might not even be that simple. How creator-owned are these creator-owned books, anyway? Can they take them and leave? How open-ended are those contracts?
It’s Portland. It’s a small comics community with lots of publishers. My guess is that the younger creators who are still learning to navigate the waters of Hollywood would end up at Dark Horse, while the more veteran creators who are already set up with agents and have had shows made before would go to Image, so they can completely control their own destiny.
The Uncomfortable Question, Part 3: Was Oni In Trouble?
Again, I’m putting on my cynical hat here. I have no inside information on this, but it’s an angle that deserves some consideration.
I know there have been cases in the last twenty years where financially troubled smaller publishers sold to slightly less troubled smaller publishers, or publishers with better financial backing from investors/Hollywood/China.
But is the reason Oni sold because they had to?
This is being characterized as a “merger,” after all, and not an acquisition. Was Oni in bad enough financial shape that they weren’t worth a large cash payment? Or does Lion Forge not have that kind of money to begin with, and so a merger proved cheaper?
These are both private companies. They don’t have to disclose anything. That leaves us only to speculate and hypothesize.
Again, I have no inside information on this. The rumor mill grinds on, but I don’t get to enough bars during conventions to hear any of the super juicy stuff.
Best Wishes and High Hopes
I genuinely hope this all works out for the best for everyone. I hope the creators don’t get screwed on the deal somehow. Oni’s been around for a long time, and they have a lot of great books in their catalog. I don’t want to see them go away.
I want to see Lion Forge succeed just because I want to see Magnetic Press continue to translate and publish more European albums. They make beautiful hardcover books.
But the idea that this is as simple as two publishers merging operations is woefully naive. This is all about Hollywood, as is everything in comics these days. I wish it was as simple as a publisher expanding and filling out its portfolio, but we all know better.
Or we should. Stop kidding yourselves.