The Family Christian Stores bankruptcy drama continues to reverberate across the Christian publishing world as publishers owed money by FCS try to forestall their own financial hiccups.
At least one publisher, who declined to comment to PW, wrote a March 2 email letter to agents and authors saying, “You are likely aware that Family Christian Stores filed for Chapter 11 bankruptcy on February 11, 2015. The short-term impact of this unexpected event in our company’s cash flow has presented us with a significant challenge. We have taken steps to shore up this cash flow crunch, and fully expect to send your royalty payment within the month of March.”
Agents also declined to name the publisher, but admitted that the FCS bankruptcy could have long-term effects.
“This has hurt publishers, and has trickled down to authors and agents,” said Chip MacGregor, president of MacGregor Literary, Inc, who has had clients experience payment delays. “It’s one thing for a huge New York house to have a retailer go broke owing them a million dollars—it isn’t easy, but they would weather the storm. But when a medium-sized or smaller publisher suddenly is told they won’t be paid the half-million they are owed, that’s a huge blow.”
Janet Kobobel Grant, founder of Books & Such Literary Management, said the publisher that sent the letter to authors “showed significant holding of reserves and returns on our clients’ royalty statements.” She added, “I suspect that is in anticipation of FCS returning the publisher’s inventory.”
“I think we’ll see much more of the affects of FCS’s Chapter 11 in the next round of royalty statements, especially in terms of more returns and a downturn in royalties earned for our best-selling authors,” said Grant.
She hasn’t heard of publishers declining projects because of FCS’s bankruptcy. “Publishers already were so risk averse in acquiring titles, it’s hard for me to determine if they’ve become more so as a result of the bankruptcy,” said Grant. “It’s sort of like Bostonians not noticing the difference between 100 inches of show and 108 inches.”
The Evangelical Christian Publishers Association (ECPA) has conducted a survey on the impact of the FCS bankruptcy and will release results soon.