PGW Clients Ponder Perseus Offer

by Jim Milliot, PW Daily -- Publishers Weekly, 1/23/2007

PGW clients were excited about yesterday's offer by Perseus to pay 70 cents on the dollar owed to them in the AMS bankruptcy—along with other financial considerations—but many said they want to know more details before accepting the Perseus deal. The two major issues publishers said they want addressed are the length of the distribution contract with Perseus (believed to be four years) and to learn more about what will happen to the PGW staff under the Perseus operation.

Paul Coates, head of Black Classics Press, said he would say yes immediately to the 70 cents offer "if it includes the PGW staff. Without the PGW staff you have a completely different company." Another large PGW client said he "needs to hear more specifics about the transaction and details about the transition from PGW" to a new entity before committing to anything. "I also need to have a personal conversation with [Perseus CEO] David Steinberger before making our decision," this publisher added.

For his part, Steinberger said that if the PGW deal goes through, "we will need additional resources, and I anticipate making offers to PGW people." He said all decisions about staffing will be made during a transition period following approval of the PGW proposal. He said it is Perseus's goal to assume distribution for PGW publishers some time next month.