Wednesday, March 13, 2019

Owner of Artist Network, Wet Canvas & North Light Books files for Bankruptcy Protection

I've just caught up with the news which broke earlier this week that F&W Media have filed for bankruptcy protection. 
F+W Media, the multimedia company that publishes books, magazines, and digital content for hobbyists ranging from writers to quilters, filed for Chapter 11 bankruptcy March 10.
F&W Media has two divisions withins its largely arts and crafts empire
  • Communities ($67.7 million in revenue in 2018) comprises 10-enthusiast categories and includes - for artists - Artists Network, Artists Network TV and Wet Canvas
  • Books ($22 million revenue in 2018) includes North Light books as well as a lot of other specialist arts and crafts imprints for hobbyists and a backlist of 2,100 titles - one of which is mine!  Others of which belong to some long time artist friends.
I have written four books, which they have had me revise and expand for a total of eight. At last count, five were still in print, but they have frozen royalty payments and the authors haven’t been paid. This came as a shock last week. One of the authors
F&W Fine Art includes:
You can read the filing here - from which I can see that F&W Media owes significant money to various other art book publishers - which is somewhat worrying.

It has outstanding debts totaling $105.2 million and only $2.5 million in available cash
Authors of art instruction books who are due royalty cheques will be receiving nothing until such time as a sale of their imprint occurs - if this indeed happens. Whether they can retrieve their content (for publication elsewhere) should a sale not occur depends on how their contract is worded.

I have little else other than links to news coverage at the moment
Oddly there is absolutely no indication of the bankruptcy filing or what's happening on any of the F&W websites that I can find. I'm assuming that means either those administering the sites have not yet been told, have been told not to say anything in public and/or or nobody quite knows what to say about the devastating critique of the reasons for the Chapter 11 bankruptcy filing indicated by the current CEO
The term Bankruptcy Protection is used because a bankruptcy filing in a court of law stops all collections activity and legal proceedings regarding debt and financial matters. BLP Bankruptcy Law Professionals
UPDATE: This is the official site recording matters re. legal proceedings and there is a Creditors Meeting in early April.

Pursuant to Section 341 of the Bankruptcy Code, a meeting of creditors will be held on April 8, 2019 at 3:00 p.m. (prevailing Eastern Time) at the J. Caleb Boggs Federal Building, 844 King Street, 2nd Floor, Rm. 3209, Wilmington, DE 19801.
I'm not surprised by the fact of the bankruptcy protection filing - except by the length of time they have managed to last.
The bankruptcy filings made this week by F+W Media offer a rare and revealing look at a company spinning out of control during the last two years, struggling with debt, the secular decline of print media, the loss of ad revenue, the harmful impact of free online content, and an ecommerce strategy that suddenly turned disastrous.
It pains me to say this but I saw this coming a very long time ago when I realised that the owners failed to grasp the reality of the move of commerce to online and what the requirements are of a new type of business model. They seemed to have a vision of ecommerce which was was corporate and conglomerate and failed to realise how nimbler smaller operations would move faster to satisfy demand from its consumers.

To my mind, it was a lumbering giant in an ecommerce world full of micro-entrepreneurs.

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