The Bankrupting of Publishers Group West

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.

7 Responses

  1. The way things areThat’s
    The way things are

    That’s depressing news, Levi. I’ve had to work for various companies over the years to pay my bills. Here is what I’ve learned:

    Corporations exist for the enrichment of a few majority stockholders. Period. Employees, customers, and the general public have no place in their thinking other than to serve that goal.

    When we keep that in mind it all makes sense.

  2. Very true, Dan — but we also
    Very true, Dan — but we also have laws, and courts, and prisons. The fact that AMS’s management team includes known corporate criminals is an indication that something more than garden-variety incompetence may be involved here. I certainly don’t know this for a fact, but I am glad to hear that several journalists (and, hopefully, government prosecutors) are taking a close look.

  3. Publishing Group WestWhen big
    Publishing Group West

    When big companies like that go out of business, they don’t realize just how far reaching their decisions are.

  4. raison d’etreWriting should
    raison d’etre

    Writing should be a part of the process of improving things, not simply about making money, like baseball or tv game shows or meaningless wars. My concept is, make it better, or get out of the way.

    If the artistic medium reduces itself to simply making money, why should anyone care when a book distributor goes out of business? That would be similar to canceling Wheel of Fortune or the baseball season. It doesn’t really mean anything; it doesn’t really matter to anyone.

    If the artistic medium would insist on the bottom line of making the planet a better place, it would compete with religion for its income. And religion is the biggest cash cow on the planet.

  5. My Comment Will Not be
    My Comment Will Not be Welcomed.

    But. Sorry for the lack of empathy. It is my SUBJECTIVE feeling that after years and years (decades) of screaming that Corporate Culture was going to ruin the Quaint Little Gentlemen World of Books (and certainly Independent bookstores), I now sit back and listen to Other People scream about how bad it is. And how bad is it. Here’s how Bad It Is: The World of Business and Books is no different from the world of Business and toilet plungers. It is the CULTURE that grants business such carte blanche until such time as Business gets caught in bed (with whomever) like a whore with her hooker legs spread. She charges way too much and getting off is relative. Does the “Culture” suffer. What culture. At some point in the scheme of things, Culture has sold out Culture and CULTURE deserves what it gets. This culture is no different and there is no change looming on any horizon. Greed matters. It is the American religion. And at some point — be it in politics, geo-politics, business, education, sociology, Art — Americans get what they deserve because they can’t recognize the difference between culture and consumerism. Other Cultures go out of their way to protect Culture. America does not. Business and the Business of Books are not the same, and it isn’t consumerism that is going down the tubes. There is a larger picture going on here and it’s been unfolding for a long time now. What culture. It is a culture of boxes which is not a culture. We must “save” the culture. Baby, we lost that war some time ago. The fact that it can be sold, boxed, packaged, and dumped down the river is not germane. The reality from the POV of Business is that it can’t be sold, boxed, and packaged ENOUGH. The sacred cow is Business. This will not be undone. There is no hope for culture. It died on a book list and a limb. You do not have a culture. To save. You have Business such as it is. We genuflect to it every day and then one day we wake up and Wonder What Happened. Usually shit. We value best sellers and book lists. Not books and not culture. It got toilet plunged by Business when we started making the mistake of thinking that pop culture was a gift from god.

  6. Nasdijj, your comment is not
    Nasdijj, your comment is not unwelcomed, but I definitely can’t agree with you. I have at times operated as a small publisher (not very successfully), and I don’t believe I was evil at the time.

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Litkicks will turn 30 years old in the summer of 2024! We can’t believe it ourselves. We don’t run as many blog posts about books and writers as we used to, but founder Marc Eliot Stein aka Levi Asher is busy running two podcasts. Please check out our latest work!