IDW Media Holdings has been in financial trouble for some time. Their base business model for their comic publishing wing relies on expensive licenses such as Transformers, Teenage Mutant Ninja Turtles, Sonic the Hedgehog, Star Trek, and G.I. Joe in order to keep their lines going. Despite having such high-profile properties, IDW continues to hire woke activists like Heather Antos to brand manage their companies, which has contributed to the sinking sales of mainstream comics and the loss of a number of these licenses.
The company had been kept afloat by a glut in the streaming market leading companies like Netflix to purchase licenses for rare original work like Locke & Key. With the streaming market tightening, IDW finds itself in a difficult position where it cannot bring in revenue from film and TV.
The company finds itself in precarious financial trouble. In January, IDW posted their quarterly earnings showing drastic losses that have continued to escalate over recent quarters with a $1.6 million loss.
More recently, the company reported that in the first quarter ending January 31, 2023 their “consolidated revenue decreased 44% to $6.6 million from $11.8 million 1Q22, primarily as a result of no meaningful revenue recognition for IDW Entertainment during 1Q23.
Following this devastating financial report and a share drop of 46% in share price, IDW announced plans to lay off nearly 40% its staff. They also announced a move to delist itself from the New York Stock Exchange.
In a statement the company detailed that the Board of Directors “determined to implement a reduction of force, deregister the Company’s Class B common stock under the Securities Exchange Act of 1934, delist the Class B common stock from the NYSE American, make changes in senior management, and implement cost cutting measures.”
These actions were done “to preserve capital, and put the Company in the strongest position possible to unlock value from its assets, including its intellectual property and ability to generate new intellectual property.”
IDW also announced they would cut “approximately 39% of its current workforce, retaining essential personnel who are most directly related to preserving current operations and launching the Company on its new trajectory.”
They note, “The reduction in force and other steps, after the effect of backfilling certain positions, is expected to deliver approximately $4.4 million in annual savings (and potentially greater savings in future periods) and is currently expected to result in approximately $0.9 million in severance and related costs to be recognized in the current period.”
Those cut from the company include the CEO and CFO. Heidi MacDonald at Comics Beat also claims the entire marketing and PR departments were let go. She also says that half of editorial was laid off as well including Publisher Nachie Marsham.
Lead Independent Director on IDW’s Board David Breau explained why the company decided to delist from the New York Stock Exchange, “The Board determined that going dark is the best path for the Company due to expected cost savings, reduction of pressure on limited resources and the Company’s current inability to realize many of the benefits from continued listing and Exchange Act registration and reporting.”
“Low trading values and volume has limited our Class B common stock’s liquidity and made it untenable to effectively use our securities as transaction consideration, attract interest from institutional investors or market analysts or provide meaningful incentive to our employees. At the same time, we continued to bear the direct and indirect expenses associated with the NYSE American listing and SEC reporting,” Breau continued.
He added, “We believe the reduction in time spent by our management and employees complying with the requirements applicable to SEC reporting companies will enable them to focus more on managing the Company’s businesses, strengthening our strategic relationships, exploiting our assets and thus increasing stockholder value, with a focus on long-term growth without an undue distraction by short-term financial results and stock price movement.”
Tom Waltz, Creative Development officer and Group Editor who was also one of the people let go, released a statement on Twitter.
He wrote, “My final day as an official IDW employee (currently my position is Group Editor/Creative Development) will be May 12th. However, my situation is unique in that I’ve spent nearly the last year and a half functioning more as talent for the company than as an editor. Which means, my separation will only affect my official editorial status. I will continue working freelance with IDW as a writer/consultant on all things #TMNT (including #TheLastRonin / #Roninverse), as well as writing for other licensed and creator-owned projects for the company.”
Waltz continued, “This is a multi-year contractual agreement that was reached both amicably and in absolute good faith (the great folks at IDW were very generous in their efforts to keep me in the fold). In other words, I will continue all my current creative functions at IDW (and then some). It is only the Group Editor aspect that will be removed. And trust me, we’ve got so many cool things in the works and planned, especially on the TMNT front. Look for huge news soon.”
Moving salaried employees to freelance allows IDW to phase out work by their creatives and pay them far less.
Oddly, controversial editor Heather Antos’ position did not seem impacted by the IDW layoffs. Antos, who has been roundly criticized for her mishandling of the Star Trek brand, didn’t make a statement regarding her colleagues losing their jobs.
With IDW making this drastic move, fans can’t help but wonder why they would leave some of comics’ worst content producers in place. However, given they announced one round of layoffs it’s quite possible another round could be imminent.
What do you think of IDW’s financial troubles? Leave a comment and let us know.