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08 January 2007

The Advanced Marketing Services Quagmire of Deep Sleaze Flows Back to the 1990s: GalleyCat

Blogaulaire takes credit for the title . . . GalleyCat:

"When AMS bought Publishers Group West in 2002, all looked good, as the company reported total sales of $763 million built upon supplying books to wholesalers such as Costco and Sam's Club. In fact, the company had been reporting strong sales for several years. But mere months later, in July 2003, things turned for the worse and the stench grew ever thick. That's because the US Attorney's Office in San Diego launched an investigation into AMS's accounting practices, revealing the company overstated its pre-tax earnings by about 9 percent in fiscal 2001, 10 percent in fiscal 2002 and 19 percent in 2003.

The San Diego Union-Tribune, which was all over the story at the time and as it developed over the course of several years, reported that publishers were deceived - to the tune of millions of dollars - into believing AMS had done various marketing activities to promote their books that it had not. In addition, AMS executives misrepresented the company's actions, according to the SEC, and did so from approximately 1999 through 2003 inclusive. Those strong sales weren't nearly as strong after all."

Publishers Group West does not own all 'its' independent publishers and Advanced Marketing Services does not own PGW. People now are baffled about how then they cannot collect their chips and walk away from one another.

Maybe it has something to do with young publishers being totally in the dark (SOMEBODY kept them there for a long time) about how and where to sell books.

And, in the words of GalleyCat: "No wonder a rogue blog called Radio (Free)PGW has popped up to provide some dark humor in dark times, signing off today's flurry of posts with "from the killing fields of America's publishing industry--good day and good luck." SEE -- Radio Free PGW


Anonymous said...

AMS owns PGW 100%. Anyone who says otherwise is totally uninformed.

Blogaulaire said...

anonymous: I agree, how could I not. The point, a bit obtuse I'll admit, was that in this pyramid, 'who owns what' is as important as 'who owns who'.

AMS could be said to 'own' distribution to COSTCO, for example; this is the reason Random House keeps dealing through AMS despite the FBI investigation and the SEC initiated prosecutions.

Unfortunately, the books published by these independents cannot be said to be 'owned' outright by these publishers until the moment each one is paid for - at least that is how I interpret what I've read so far. I understand that one legal hic is that the books have been placed in consignment.

What would be very interesting to us outsiders is to learn how, in these circumstances with AMS execs prosecuted for lying, that AMS continues to exercise its ownership control over Publishers Group West -- and the independent publisher stay inside PGW. Please, don't tell me it's as simple as a 5-year contract deal.

Sorry. I meant to say that the word 'independent' used for the publishers vis a vis PGW was nearly as vague as saying that PGW was an 'independent' go-between for these publishers and the distributor AMS. In any case, the two words 'publishers group' are a misnomer.