Perseus Books Group President and CEO Speaks on Distributing Former PGW Clients
Many independent U.S. book publishers breathed a sigh of relief earlier this month after a Delaware bankruptcy court ruled in favor of Perseus Books Group taking control of the distribution contracts for more than 120 clients of the now-defunct Publishers Group West (PGW).
The New York-based Perseus Books Group offered to pay 70 cents for every dollar of pre-bankruptcy claims owed to publishers who were distributed under PGW, a Berkely, Cal.-based division of Advanced Marketing Services (AMS). The bid was approved by Judge Christopher Sontchi on Feb. 19.
Perseus President and CEO David Steinberger says the company began shipping books for the former PGW clients on March 1. The companies started to receive payments the same day.
“We’re really trying to be the home for independent publishers,” Steinberger says of Perseus. “We have a very exciting mission. It’s also a very challenging mission. We’re trying to create a place in the market for independent publishing, and it’s a market that’s very much dominated by media conglomerates. Our goal is to enable the independent publisher to be entrepreneurial and to be creative and to have control over his or her own destiny, but with the support of an organization that has real scale and the ability to represent that publisher that really enables that publisher to succeed.”
PGW’s parent company, the San Diego-based AMS, declared bankruptcy at the end of 2006, leaving its publishers without fourth-quarter payments or a means of distributing titles. The 124 publishers, including Avalon and McSweeny’s, represents close to 85 percent of the PGW client revenue.
A bidding battle between Perseus and Rowman & Littlefield Publishing Group’s National Book Network began after AMS declared Chapter 11. Although National Book Network was offering to pay 85 cents on the dollar, AMS and its creditor committee publicly supported Perseus’ offer.
“We were really gratified with the response publishers gave us,” Steinberger says. “What many publishers said to us was, ‘The most important decision here is who is my long-term distribution partner. Who’s going to best represent my books and authors. That’s more important to me than getting an extra 15 cents on the dollar.’”
Perseus’s offer in total was approximately $20 million, Steinberger says.
As part of the deal, the publishers agreed to extend their existing contracts for four years.
Read the April print issue of Book Business for an in-depth conversation with Perseus President and CEO David Steinberger.