The decision to retool its business model plus an awful first half of 2007 has resulted in a number of changes at Sports Publishing LLC, the Champaign, Ill., independent publisher. About 18 months ago, president Peter Bannon began outsourcing various functions, including moving the warehousing and sales activities to Ingram Publisher Services, a process that is largely complete. “We’ll be completely out of the warehouse business by the end of [September],” Bannon said. With the move, IPS is handling sales through traditional outlets, while Bannon will oversee all special sales. Earlier, Bannon had outsourced production to a print broker. “We needed to reduce our fixed costs,” Bannon explained.
More recently, Sports Publishing has eliminated a few other spots in publicity and marketing. Those cuts were made in part because of what Bannon acknowledged was a poor first half of the year. The company has relied on its instant books about various league champions (the Super Bowl winner, winners of the NCAA football and basketball titles) to carry sales in the first part of each year, but those titles “didn’t work this year,” Bannon said, which he attributed to the relatively small size of the cities where the winners were located—the Indianapolis Colts in the NFL, for example. “The wrong teams won,” Bannon said. In addition, the bankruptcy of AMS not only cut into Sports Publishing’s cash flow but also disrupted sales to the warehouse clubs, important outlets for the company’s titles.
The downsizing of the company, which cut the payroll from a high of approximately 50 employees to about 25, is aimed at cushioning the blow at Sports Publishing in case its instant book program has another disappointing period, Bannon said. And for at least one year, the list will be changed, with a cutback on new titles and increased emphasis on reprints. In 2008, Bannon expects to do 50 original titles and 25 paperbacks and updated editions, compared to about 85 original titles released in 2006. Going forward, Bannon said he would like to keep the ratio of new books to reprints about two-to-one.
Bannon said there are signs the sales slump of the first half is over. August sales were strong, and September was on pace to hit projections. And with fewer books in the stores because of AMS’s problems, returns are way down. “I guess you could call that a silver lining,” he said.
