Do you know that story in the Bible where Solomon orders a baby cut in half in order to settle a dispute about who was the mother?
One point of that story was that cutting the baby in half wasn't a satisfactory solution, but apparently whoever is managing the F+W Media bankruptcy sale wasn't paying attention.
PW reports that Penguin Random House has bought the rights to the books published by F+W Media.
Penguin Random House has posted the winning bid to acquire the book publishing assets of F+W Media. Sources told PW that two companies made offers for the assets earlier this week. The U.S. Bankruptcy Court for the District of Delaware is expected to approve the bid at a sale hearing scheduled for Monday, June 10.
“We are pleased that Penguin Random House recognized the value in our esteemed portfolio of books and we wish them all the best going forward," Gregory J. Osberg, CEO of F+W Media, said in a statement.
The problem with this deal is that it is neither a smart nor logical way to split the company. F+W Media wasn't organized by function so much as topic. Each of its business units included multiple activities focused on a single audience. Writer's Digest, for example, published books and a magazine, offered online courses, and also had a conference.
PRH bought the rights to F+W's books, but not anything else. While I am sure they are quite satisfied with the half of the
baby company they are about to eat, it really sucks for the rest of F+W Media because the remainder of the company is now worth considerably less than it was before.
This wasn't a sale so much as an organ harvest, and it leaves the rest of F+W media hoping that someone comes along and buys the rest of the carcass before it gets thrown down the slaughterhouses waste chute.
Citing liquidity issues, +W Media filed for bankruptcy in March 2019. The publisher only had about $2.5 million in cash available and $105.2 million in outstanding debt, so it petitioned the court for bankruptcy relief in order that a sale could be organized.