If the Perseus Books Group is able to complete its acquisition of more than 100 PGW publisher contracts on February 28 as planned, publishers that had been distributed by the old PGW will face a new set of challenges. While Perseus president David Steinberger said that Perseus will begin writing checks to its new publishing clients immediately after the completion of the deal, the weekly checks that PGW has been sending to publishers since the bankruptcy began will stop. Those checks have been the lifeblood for many publishers, and while receiving a check from Perseus for up to 70% of the money owed them in the AMS bankruptcy will be a welcome financial shot in the arm, publishers face the prospect of going another three months before receiving another payment.
For Soft Skull's Richard Nash, the period after February 28 represents a second phase of the PGW bankruptcy that "will be at least as difficult as phase one from a cash-flow perspective, but at least it will be more predictable." The upcoming challenge, noted Wisdom president Tim McNeill, is how to move forward without a new payment for several months, and to be prepared for a lower-than-expected check in the summer because of charges for returns.
To date, PGW publishers contacted by PW said they coped with the bankruptcy in a variety of ways, and there was a split among publishers between those who will need to scale back their publishing programs this year and those who plan no changes. Renee Jardine, editor and associate publisher of Velo Press, said the Boulder, Colo., house has done "a little bit of everything" since the bankruptcy filing. In January, Velo, which publishes cycling books and magazines, laid off a part-time production employee, downsized an editor's job to part-time and decided not to fill an open position.
Other publishers have relied on nontraditional outlets to give a boost to sales. Both Wisdom and Cleis Press are pushing sales through their Web sites, with positive results. Cleis authors that have their own sites are urging readers to buy titles directly from the publisher. The bankruptcy has reinforced for many publishers the need to diversify their revenue streams. "You need to have more than one source of revenue," McNeill said, noting that he has recently moved his direct-mail operation to a facility separate from his distributor. "This has driven us to focus on channel markets all the more," noted Scott Jordan, publisher of PoliPoint Press, who said he was looking to model his sales operation after Chelsea Green, which has a significant direct-mail and Internet operation. Another publisher, who requested anonymity since he hasn't found a new distributor, said that since the bankruptcy, "we have all come to realize that diversification is a good thing."
Soft Skull's Nash was the only publisher contacted by PW who said that the bankruptcy will definitely force him to delay some titles, although some others were not yet sure about what they will do for the rest of the year. "We'll be doing triage on what books need to be published and which can wait," Nash said. Jordan said that since PoliPoint, which downsized its staff last year, specializes in current events titles, he may move some spring 2008 books into fall 2007 to take advantage of the early interest in presidential election issues.
One PGW publisher who hasn't been forced to pick a new distributor is North Atlantic Books, which is scheduled to move its distribution to Random House April 1. Sales and marketing director Mark Ouimet said he is seeing if it is practical to make the switch to Random sooner. "We're very excited about joining Random," said a relieved Ouimet, who spent a number of years with PGW before joining North Atlantic three years ago.
