Publishers' Group West Bankruptcy Update
Update by David Cole
At our February forum, Bay Area publisher David Cole presented an update on the bankruptcy of distributor Publishers' Group West. Cole described the latest news as "very good" in that Perseus Books, an East coast distributor, will purchase Publishers' Group West (PGW) paying PGW's 184 independent publishers seventy cents on the dollar of the amount PGW owes them. Thirty of those publishers are in the Bay Area. The purchase will enable the independent publishers whose books PGW distributed to absorb the loss and continue publishing. "The bankruptcy judge has recognized that PGW's inventory is the property of the independent publishers," Cole said. The court's finding has enabled the sale of PGW which preserves independent Bay Area publishing and the jobs that those publishers provide to Bay Area editors.
According to Cole, PGW's full service distributorship was critical to the existence of independent publishers. A distributor sells, warehouses, ships, and collects on sales of independent book publishers. Perseus Books will assume PGW's distribution functions.
PGW began distributing in the 1970s when independent book stores were the norm. It became a $150 million company in the years before nationwide bookstores like Borders, Amazon, and Barnes & Noble overtook the market. PGW's founders sold PGW to Advanced Marketing Services (AMS), a publicly traded company that sells to big-box stores like Costco. AMS came under investigation for allegations that it did not spend publishers' money on advertising their books as contracted. A criminal trial followed, resulting in AMS filing for bankruptcy. PGW stopped paying its independent publishers in the fall of 2006 at the time of book sellers' highest annual sales. Cole referred us to the blog, Radio Free PGW for further information about the PGW bankruptcy.
David Cole's passion is independent publishing. He is the author of The Complete Guide to Book Marketing (Allworth Press), now in its second edition, and is the founder and first president of the San Francisco Bay Area Book Festival. Cole has taught at the University of California Extension certificate program in publishing and, for six years, was marketing director at Nolo Press. His career spans over thirty years in every phase of publishing in the Bay Area. His company is Bay Tree Publishing.
Wendy Moseley is a freelance editor and proofreader, and a lawyer in San Francisco. Moseley has written and edited materials ranging from non-profit public relations and for-profit advertising copy to appellate briefs and legal analysis, and she has proofread law review articles and a recent novel, Book of Business--A Novel of the Law by Will Nathan.