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Posts Tagged ‘Rich Freese’

Major Changes as Perseus Integrates PGW

Publishers Marketplace reports on its front page this afternoon that Perseus will combine its and PGW‘s sales efforts into a single domestic sales group representing the company’s own imprint and Perseus and PGW distribution clients. Perseus will keep 68 PGW employees, but CEO Rich Freese will leave by the end of July as the transition period is complete.

Marketplace further reports that PGW executives and veterans staying on include Kim Wylie (who will continue to be responsible for all PGW client publisher sales, reporting to Perseus’s Matty Goldberg) and PGW field sales director Elise Cannon, who will head a newly combined Perseus and PGW field sales force of 16. Others named include Eric Green, Sue Ostfield, Susan McConnell, Kevin Votel, Eric Kettunen, Sarah Rosenberg, Heather Cameron, Karla Simmons, Sean Shoemaker, Matthew Chilcott, and Roxanne Schwartz.

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This Week in AMS: Recovery for Freese, NBN Still in the Hunt

The dust may be settling on Perseus winning the auction to take over PGW publisher contracts, but the turmoil hasn’t stopped. Before getting to that, let’s wish PGW President Rich Freese a speedy recovery after he fell on stairs at his home Sunday night, breaking three ribs, an elbow and possibly damaging his hand. The good news, according to Shelf Awareness, is that there were no spinal or neurological injuries,
according to friends. He has had some difficulty breathing because of the broken ribs and asthma but may be released from the hospital as
early as today.

Meanwhile, Radio Free PGW is doing a yeoman’s job of staying abreast of every new development (and we’re hoping they don’t shut down on March 7 as threatened, but understand why this may be so.) Read on for their thoughts on PGW’s rejection offer of non-consenting publisher contracts (which they deem “mean-spirited and spiteful” and “a blatant attempt to strong arm and punish non-consenting publishers”) NBN’s still-standing 85 cents on the dollar offer for non-consentings, and why it’s bad news to be an AMS employee at the moment with the expected bloodbath at the ready in the wake of its impending buyout from Baker & Taylor , if no objections are filed with the bankruptcy court by February 28.

Today in AMS: More on NBN Offer and PGW’s Options

Yesterday’s news of the National Book Network‘s offer to Publishers Group West clients who have been imperiled by the Advanced Marketing Services Chapter 11 filing has, understandably, thrown quite the monkey wrench in what seemed to be an orderly (if steamrolled) handoff of client contracts to Perseus. Since sending that letter, NBN president Jed Lyons told Shelf Awareness that “we’ve been inundated with publishers. We’re furiously taking calls and making calls.” He called the offer “pretty straightforward” and thought it would be more attractive to most publishers than the offer made by Perseus. And PGW President Rich Freese – a former NBN employee – commented in a memo to publishers that “I know that NBN appreciates PGW’s close relationship with our customers and will undoubtedly maintain the high level of service and reliability that you have come to expect from PGW.”

So what’s the problem? According to Radio Free PGW – a publisher who is decidedly in NBN’s corner – PGW sent a plea to its publishers to ignore “a clearly superior offer from NBN” on the basis that time is, essentially, running out. “Given the limited time we have available, we believe that it is imperative that our publishers support the Perseus transaction and execute the Perseus agreement so as to eliminate any uncertainty as to the company’s ability to consummate a transaction,” reads yesterday’s communique. But since Perseus’s offer is merely that – an offer, and one that still hasn’t reached its 65% of publishers threshhold – a PGW publisher is very much free to consider, and accept, NBN’s terms. Especially if the February 12 court hearing is postponed, as per Rich Publishing’s recent motion.

Meanwhile, the San Diego Union Tribune reports that AMS is asking a bankruptcy court to let it pay retention bonuses of approximately $750,850 to 117 PGW employees, the money which would be paid out by potential buyer Perseus. A hearing on the request is scheduled for Feb. 28 in the U.S. Bankruptcy Court in Wilmington, Delaware.

Today in AMS: PGW Clients Get Perseus Offers

PW Daily reports that various Publishers Group West clients are sending back signed agreements to the distributor, though as of this writing, not all publishers have yet received offers. Perseus CEO David Steinberger said he had received “more than 10″ contracts since they began coming in yesterday. Late last week, Steinberger and PGW head Rich Freese met with a group of PGW clients in the San Francisco Bay Area. “The sessions went well. We did a lot of listening,” Steinberger said.

As the runup to the February 7 bankruptcy court hearing date for objections to Perseus’s offer continues, so too do the rumors and speculation. Yesterday PW Daily reported that AMS’s primary lender, Wells Fargo Foothill, “received at least two promising going concern offers for the AMS business,” though the bidders were not named. And both Edward Champion and Radio Free PGW offer items about dealings within Perseus’s distribution chambers.

Today in AMS: PGW’s Rallying Cry, SCB has its say

A letter sent yesterday afternoon to Publishers Group West clients by CEO Rich Freese updates them on various matters relating to AMS’s Chapter 11 filing. The company continues to do business with Avalon (which jumped ship to Perseus last week) and Freese also adds that “AMS and PGW are speaking with Perseus, along with a number of other companies and investors, regarding opportunities to strengthen our financial position. It is premature to discuss any of the alternatives at this time.”

With regards to returns, Freese states that “any returns physically received at our Indianapolis distribution center pre-petition (prior to our Chapter 11 filing on December 29th) have been applied to pre-petition payables to PGW publishers. Up to this point, we have not been deducting post-petition returns (after our December 29th filing) from post-petition payments to publishers. We are currently working on establishing procedures to handle charging back post-petition returns against PGW publishers’ post-petition sales.”

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Today in AMS: Avalon Signs with Perseus

Publishers Lunch reported late yesterday that the Avalon Publishing Group, which includes Carroll & Graf, Shoemaker & Hoard, Seal Press, Thunder’s Mouth Press, Nation Books, Marlowe & Company and Avalon Travel Publishing, has signed a letter of intent to be acquired by the Perseus Books Group. (AP picked up the story this morning.) Terms were not available, but Avalon is said to have been generating about $32 million annually. Charlie Winton, Avalon’s president (and former PGW founder) will stay in place during a “transition period” and then will serve as a consultant to Perseus, including advising on “how to further develop Perseus’ client services business through which Perseus provides sales and distribution services to independent publishers.”

Since Avalon was one of the most high-profile clients of Publishers Group West, this is big news -and it remains to be seen, as Michael Cader pointed out, what this news means for the rest of PGW’s 150-odd publisher clients. Make what you will of Perseus CEO David Steinberger‘s comments in his statement about the new deal: “Charlie and I are already working together on a proposal to AMS, PGW and PGW clients, all of whom are facing a very challenging situation. We have talked to a number of clients and we are in discussions with AMS.” Winton says, “We think a path can be found that would benefit all parties. Because of its two distribution lines – Consortium and Perseus Distribution – Perseus is ideally positioned to lead this initiative.”

For Winton, the sale to Perseus marks the end of a five-year odyssey with AMS that began in 2002 (and included his replacement as PGW’s head by current CEO Rich Freese in 2003.) And as Pat Holt (of Holt Uncensored fame) predicted back when AMS bought PGW, “this marriage between distributors with conflicting philosophies is going to hit some purty stormy patches.” Did it ever – and Winton’s necessary defection may well signal even more defections, whether to Perseus or to different distribution waters. This morning, the anonymous Radio Free PGW blog added its own take on the story with a part history, part obituary of PGW as it once was.

Today in AMS: PGW’s Official Statement; Publishers Unite to Fight

Yesterday afternoon Publishers Group West President Rich Freese sent out a statement to all PGW publishers outlining the distributor’s position in the wake of Advanced Marketing Services‘ Chapter 11 bankruptcy filing, and what it means for the future of its more than 150 publisher clients. The most important points of the statement:

  • PGW filed a motion on January 5 filed with the court seeking approval to give PGW publishers “Critical Vendor” status and have asked the court to allow PGW to make payments totaling the amounts due from PGW to PGW publishers in January 2007. “We believe that Critical Vendor designation is a significant step for PGW publishers and expect this motion to come before the court during a hearing on January 24th,” says Freese.
  • Contradicting statements in the media and the blogosphere, “PGW publishers are the owners of their inventory held by PGW in its warehouses in accordance with our contractual relationships.
  • Finally, Freese wants “to reiterate that neither AMS nor PGW have ever pledged the PGW publishers’ inventory held in PGW’s warehouses against our credit line. Accordingly, the bank excludes the PGW publishers’ inventory from its calculations against the borrowing base.”

More updates are pending, as are weekly COD checks to each publisher post-petition.

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