It was the summer of 2003, the nadir (for me) of the post 9/11 economic crash in New York City, and I was making ends meet by teaching web development classes at a night school on Long Island. As I walked to the train, my boss called. "Don't bother coming in tonight," he said. "We're having a little problem."
It took days for me to get the truth about what exactly the problem was: the school was going out of business. What about the $1400 paycheck they owed me? After a few more days, the truth that I wasn't going to ever get paid sank in. I was now a creditor of a corporation that had filed for Chapter 11 protection, which basically means I'd worked for free the last four weeks and there was nothing I could do about it. The fact that I was depending on this money to pay overdue bills didn't mean a thing.
I managed to get by, but it was a hell of a rough patch, and I can only imagine how numerous large, medium-size and (especially) small independent publishers are reacting to the news of the impending bankruptcy of Advanced Marketing Services (AMS), the parent company of the long-running and well-managed major book distribution company Publishers Group West.
The result of this bankruptcy is that the publishers who use PGW's distribution service are not going to get paid for books that have already been sold. The publishers may also lose access to the inventory of unsold books in PGW's possession. Since Publishers Group West was pretty much the Starbucks of the independent book distribution economy, this is no minor problem for publishers who were living on the fringes of financial survival (and, given the nature of the publishing business, this describes many of them).
What's most aggravating is that Publishers Group West was not
failing. They were taken down by their incompetently run parent company, AMS, despite the fact that they were a profitable operation
. AMS chopped the legs right off their cash cow, and one can only hope the corporate crooks (yes, crooks, see links below) will face criminal charges. Is this the Enron of the bookselling industry? Yes, in fact, it is, and we may lose some of our most beloved small publishers as a result.
For the real scoops, here are two updates from Ed Champion
and Galley Cat
, who've been dogging the story the way good reporters do. I'm very eager to continue to learn more about how a fuck-up like this can happen to a profitable company.