The Oldsmar company championed a different product and business philosophy, but the vision hasn't paid off.
By SCOTT BARANCIK
Published June 30, 2004
[Times photo (2000): John Pendygraft]
Mark Alessi founded CrossGen Entertainment Inc. in 1999 with the millions of dollars he earned from the sale of his Tampa software company to Perot Systems Corp. of Dallas. It reported to bankruptcy court debts of $10-million to $50-million.
As CrossGen failed financially, some series, like Sojourn, abruptly stopped.
[Times photo (2000): John Pendygraft]
CrossGen artist John Dell inks a comic cover. The company hired its artists, rather than depending on freelance help as is the industry standard. It has since laid off or lost most of its artists, writers and staff.
OLDSMAR - Hey, Spidey, could you spare a few bucks?
As fans throng to see today's premiere of Spider-Man 2, an Oldsmar comic-book company that shunned spandex-clad superheroes in favor of trolls, talking monkeys and medieval heroines is hanging by a financial thread.
CrossGen Entertainment Inc., founded by software millionaire Mark Alessi in 1999, has filed for Chapter 11 bankruptcy protection. Its report to the federal bankruptcy court in Tampa claimed assets of $1-million to $10-million but debts of $10-million to $50-million.
"Has there been some pressure from creditors? Yes," said Rod Anderson, one of two Holland & Knight bankruptcy lawyers representing the company. "We're trying to develop a strategy for going forward."
Alessi did not return a call seeking comment Tuesday. But the company has stopped putting out new issues of its comic books, dropped out of the industry's annual comic giveaway scheduled for July 3, and laid off or lost most of its artists, writers and other staff. Some high-profile departures include its sales and marketing director, chief financial officer and senior vice president of publishing.
In some ways, Alessi was a contrarian.
Though Marvel Comics and other industry giants long ago turned to freelancers, Alessi lured talented artists and writers from around the world to humble Oldsmar with the promise of regular paychecks, a share of profits and the chance to work together in an old-fashioned "bullpen" environment.
He created an alternate universe of characters that shirked capes for corsets and created story lines to which Lord of the Rings fans could relate. He brought along his own piggy bank, filled with millions of dollars from the sale of his Tampa software company to Perot Systems Corp. of Dallas. He innovated, introducing Web-only comics and DVD-based comics that included sound and other special features.
Alessi also vowed to pursue excellence in writing and artistry, a promise many fans believe the company fulfilled.
Or did, until the company began running out of cash, that is.
"Because of their financial problems, they rushed a lot of their story lines," said Eddie Riordan, who manages a Wonder Water store in Clearwater. "They initially had a five-year plan. But they rushed the endings on a lot of them, and a lot are just really, really bad."
Other series, such as Sojourn, which featured a buxom archer named Arwyn who does battle with a troll named Mordath, simply stopped abruptly. Wonder Water and other area stores are selling all their remaining CrossGen stock at a significant discount.
Sean Eirish, a friend of Alessi's and the owner of Hooked on Comics in Tampa, said he believes CrossGen was a victim of a bad economy.
"I sell fun," he said. When consumers' wallets are thin, however, "the necessities of life take priority over fun."
One industry trend Alessi didn't eschew was its increasing reliance on licensing fees for profit. CrossGen aggressively pursued television and movie deals featuring its characters, much like Spider-Man, Batman and others.
But CrossGen was spending cash faster than it could earn it, pressing Alessi to seek outside partners.
Scott Feuer, chief executive of Skyway Capital Partners LLC of Tampa, said his investment bank spent the first six months of 2003 trying to help CrossGen find investors but was unsuccessful.
Many bills went unpaid. CrossGen said it owes money to creditors including its printer ($1.5-million), a credit card company ($400,000), a Tampa law firm ($260,000) and its landlord ($63,000).
Marty Traber, a partner at Foley & Lardner law firm in Tampa, said the firm helped CrossGen set up 11 subsidiaries last year. Condensing divisions into individual units makes selling them easier, he said. Foley also helped CrossGen develop its strategy for marketing and licensing its characters.
"I think, only because I really respect their intellectual property base, there's a high likelihood of them emerging from Chapter 11," said Traber, who added that Foley is owed only about half of what CrossGen said. "But I think the chances of us getting all of our money are remote. I think our chances of getting at least some are good."
Anderson, CrossGen's bankruptcy attorney, said it was too early to say how the company will try to escape bankruptcy. One possibility would be to sell a stake in the company to outside investors, or give creditors a percentage ownership in exchange for debt relief.
Riordan said he's a fan of CrossGen's work, as are many of his customers.
"They definitely helped revitalize the sword and sorcery type of thing," he said. Recently introduced comics included a kung fu expert mentored by a monkey, a James Bond-type thriller and a Sherlock Holmes-type mystery.
Marvel could be a source of inspiration for CrossGen's comeback. The New York company itself went through bankruptcy, emerging in 1998.
But getting a mainstream, national audience to embrace new characters in just a few years - without the firepower and finances of Marvel Comics - is expecting a lot.
"Would you plunk your $3 on Spider-man or Superman, or on some girl (character) who you don't know?" he asked. "If you don't have something that's recognizable, I think it's tough."
- Times staff researcher Kitty Bennett contributed to this report. Scott Barancik can be reached at barancik@sptimes.com or 727 893-8751.
