Personality Crisis – The Dissolution of the Independent Press Association

When the Independent Press Association went under, the independent publishing community lost more than a distribution arm.

Late in December 2006, while most offices were closed for the holidays, the Independent Press Association (IPA) quietly sent an e-mail to its member publications announcing that the organization was closing its doors. Despite previous optimism expressed by the IPA's board of directors, for many of the publishers whose titles the organization distributed, it came as little surprise. For them, the IPA's sudden announcement was endemic to a total communications breakdown between the organization and its client publications that began in early 2005. Publications represented by the IPA continue to contend with the likelihood that thousands of dollars they are owed will never be seen. For some, such as Kitchen Sink (and Punk Planet itself), this comes as the IPA's final, and fatal, blow. The fallout has been profound-the independent publishing community has experienced an unprecedented bloodletting in recent months, as magazines run on a shoestring have been unable to overcome huge losses in operating income.

In the newsstand distribution business, bankruptcies are nothing new. But in the case of the IPA, the dissolution also speaks to a much deeper crisis of mission. For publishers of IPA-distributed titles, the irony is palpable. An organization once established as an advocate for the independent press, the IPA has brought an array of the publications it was founded to support down with it. The sense of betrayal and frustration goes deep—-hundreds of thousands of dollars owed to distributed titles has disappeared, only likely to be repaid on a percentage of the dollar by the fiduciary firm Uecker and Associates, which was assigned to distribute what remain of the IPA's assets.

Founded in 1996 by John Anner, the IPA was established as a non-profit Social Justice organization for publishers and writers. The IPA offered counsel on the nuts and bolts of publishing to up-and-coming publishers while engaging in social works programs such as the New Voices in Independent Journalism, which arranged for grants for journalism students of color. It wasn't until 1999 that the IPA got into distribution, buying out beleaguered for-profit newsstand distributor BigTop (which was later renamed Indy Press Newsstand Services.) The organization stated that the IPA could better cater to the national newsstand distribution needs of its member titles than the large, for-profit magazine distribution behemoths.

Anner left the organization in 2003, replaced by Jeremy Adam Smith, who served as Interim Executive Director and was charged with finding a permanent director. Smith and the board chose Richard Landry to head the organization, with the hopes that Landry's management experience in the for-profit sector as founder of PC World magazine would prove useful in the IPA's foray into newsstand distribution. Though BigTop/Indy Press Newsstand Services was successful in increasing circulation of its titles, in early 2005 a handful of publishers began to notice that payments were coming late. In some cases, the late payments were written off by many as isolated incidents. "At the time," says Bitch publisher Debbie Rasmussen, "we weren't really in communication with other publishers. We didn't know it was a broader occurrence, so we weren't that alarmed." Carla Costa, publisher of Kitchen Sink magazine, had a similar experience. "Payments starting coming in later and later," she says. "At that point, the communication was still OK, in terms of getting closing statements for issues on the newsstand and potential payment dates-even though the payments were coming late they were still forthcoming with that information."

On October 15, 2005, Landry posted to the IPA listserv, addressing the late payment issues. In the post, he stated, "The reasons for this are numerous, but they really boil down to the fact that independent newsstand distributors like Indy Press require a lot of working cash themselves in order to be able to deal with the very long return and payment cycles that are standard for our business," assuring member titles that "I and members of the board have been working to find better, long-term ways to support the cash-flow needs of Indy Press so that we could be sure to make timely payments to you, our members and publishers."

After months of pursuing a partnership with an established distribution company to shore up the IPA's finances and improve the payment and accounting backend of the distribution chain, in March of 2006 Landry announced to the members that the IPA had signed into a partnership with Canadian distributor Disticor. The company was to handle billing and financial responsibility for the titles while IPNS would continue to manage marketing for their titles and continue their advocacy role for the publications.

According to Landry, the deal would provide the IPA with a cash infusion that would allow them to repay their debts to the distributed titles. Implied in this deal, in the eyes of many publishers, was that the titles that signed the new Disticor contracts would receive preferential payment schedules.

Many publishers balked at the Disticor deal, reluctant to renew their business relationship with the IPA by signing into a brand-new, three-year contract. Some decided that they would rather risk eating the funds owed them than sign a new contract jointly with Disticor and the IPA. Former Tikkun publisher Joel Schalit (a former associate publisher of Punk Planet) was one of those individuals. "We made the decision to not go with them before the Disticor deal was announced," says Schalit. "We didn't have confidence that a bailout would ameliorate their problems. We had suspicions that our sales reporting from BigTop wasn't correct, and we would still be dealing with them. I knew that by pulling out on the distribution deal, I was giving up a lot of money that was owed to us."

For magazines without the strong subscriber base Tikkun would fall back on, Writing off the Big Top debt was not an option, and many begrudgingly gambled they would be paid for amounts owed them. "The Disticor deal was offered so we would get paid," says Giant Robot publisher Eric Nakamura. "I felt like there was no choice ... there might have been a payment schedule, but it was the kind of schedule that leaves you with a huge debt when you don't get paid." Unfortunately for those magazines, the transition period between signing to the Disticor contract and receiving payment for the quickly increasing amounts the IPA owed was economically crippling.

Payments promised for one date failed to materialize months later. New sales representatives were assigned to member's accounts for a short period of time, only to disappear with no fanfare save for bounce-back e-mail responses. Requests for statements would garner no response for weeks, and when numbers were provided, they often came without an account breakdown or any statement detail. "They were making late payments, not communicating with us, making promises about when payments would come and breaking those promises, misinterpreting our contract and trying to take credit on returns that were long closed in order to whittle down what they thought they owed us," says Bitch's Rasmussen. For Kitchen Sink, the situation quickly turned dire. Costa explains, "not only did the payments become severely late, to the point where we had to significantly delay two issues, but the communication also really deteriorated. We stopped being able to get closing statements in a timely manner, because at that point I think they were running out of money so quickly that they couldn't give you a potential pay-out date, so they just wouldn't communicate at all. When they closed, I only had one of two closing statements I needed from them."

"In the end, it took a month for e-mails and phone calls I sent out on a weekly basis to be returned. It put us in a position where even though we're willing to fundraise to print our issues, it put us on a backlog of payments for two full issues, and it's a financial crunch that we can't really beat," Costa describes.

From the Inside Looking Out

For a number of former IPA employees, the organization's decline was equally perplexing. Jo Ellen Green Kaiser, who served as a technical assistance consultant for the IPA from 2004 to 2005, discovered the cash flow problems indirectly. "In July of 2005, they didn't pay me for my consulting job. I got very concerned. I started asking questions among people in the organization. I started hearing that things weren't good and there were problems with distribution and I realized there was a financial problem they were trying to hush up. They were hiring more and more bookkeepers, and they said it was just a cash flow problem with the bookkeepers, and that the situation was working itself out. When I started to contact people for the December 2005 conference, then I started to hear back from people that the IPA was paying late."

Sales representative Lauren Cooper, who left the IPA in April of 2005, saw warning signs in late 2004. "My job was to get publishers to do more promotions and get more copies out and publishers would say, "'that's great and all but you haven't paid me for two issues,'" says Cooper. She began experiencing communications problems of her own. "It just sort of snowballed from that point, and I couldn't get answers. Previously I could go up to accounting and say, "I've got this publisher on the phone and they want to know when they're going to get paid' and there was always some sort of answer, even if it was 'give me a couple of days.' But it became no communication flow ever."

Former Bitch publisher Lisa Jervis served on the IPA board from November 2004 until January 2oo6 as co-chair of the Member Advisory Committee. She contends that during her stint on the board, she was similarly kept in the dark about financial matters. Jervis states that she "soon realized that for my own comfort level with my fiduciary responsibilities to the organization, I was not getting nearly enough information about the organization's finances. I do not feel like enough information was shared with the board about what was going on. It led to delays in the situation being taken as seriously as it needed to be, and I think that made the outcome a lot worse for a lot of publications. There were constant struggles over communication, both in getting info for the board, and in getting info to the membership."

The View on High

In the past year, no small amount of publisher and staff frustration has been directed towards Landry and the IPA Board. Critics assert that Landry's tightly regulated, top-down management approach led to a lack of transparency and a crisis of confidence that only exacerbated the IPA's newsstand distribution issues. One of Landry's sharpest critics is Smith, who states that hiring Landry stands as "one of the greatest regrets of my working life."

"When BigTop or IPNS got into trouble, Richard's response, which was consistent with what I experienced as a member of the staff, was to shut down communications and make sure that there was no information going in or out, which had a number of horrible consequences, one of which is that it led members to distrust the organization, another of which was that an incredible amount of bad publicity was generated, which would turn to philanthropic funders reading that publicity and concluding that IPA wasn't a good investment."

Landry responded to criticism on February, 2007 in an interview with the San Francisco Chronicle, stating that "The IPA I joined was a very distressed organization, and I spent the past three and a half years trying to pull it out of a difficult financial situation."

Smith, however, has little sympathy for Landry's argument.

"When he became executive director there's no question that he faced a lot of questions to be solved," he says, emphasizing that "when you're an executive director or leader of any organization, that's your job-to solve problems."

Despite their personal criticisms, both Cooper and Jervis emphasize that Landry inherited a dire economic situation when he became Director of the IPA. "The seeds for BigTop's problems were sown a long time ago-in my opinion, back when the IPA acquired BigTop in the first place," says Jervis. "There seems to have been a profound underestimate of the financial expertise needed to manage that kind of business, and the organization just never had it and never put the proper systems in place. Richard Landry inherited a financial mess-I don't think anyone even knew how big a mess it was."

"There were always cash flow problems," says Cooper. "Some of the accounting problems were inherited from when BigTop was a for-profit and the IPA bought it." Kaiser concurs. "To be perfectly honest, when Landry took over the IPA it was in serious financial trouble," she says. "Anyone in that position would have had to fire some people, make some hard decisions."

Despite her concessions, Cooper retains strong criticisms of Landry's handling of the crisis. "The position of the organization under Richard's leadership was to preserve the organization first, the publications second," she states. "I can understand trying to make sure there's some money in the bank, but do you start taking the people who make you that money for granted?"

The Fallout

Since the announcement that the IPA was shuttering its operations, the fallout in the independent press community has been profound. A number of magazines, such as Kitchen Sink, have opted to cease publication. Costa states that the factors contributing to their decision have as much to do with exhaustion as unpaid revenue. "At the time of the IPA closure, we had Kitchen Sink 15 at the printer and didn't have any money to ship it because they couldn't pay us, so we had a printed magazine we couldn't pay for at the printer. What we were able to do with a big number of small donations was payoff our printer and mail it off to subscribers."

In another stroke of irony, as with many publishers who signed to the Disticor deal, Costa has found new distributor Disticor (which will continue to distribute titles that signed into the new contract) to be forthcoming with payments. Revenue from the first Kitchen Sink issue distributed by Disticor will fund the printing costs of their upcoming final issue. But unfortunately for Kitchen Sink and other strapped publishers, due to the often arcane process of newsstand distribution, in which magazines are paid for issues sold many months after the magazines go off the shelves, the revenue lost during the transition from the IPNS is far too much to make up.

Instead, the Costa and the editorial staff of Kitchen Sink are refocusing their energies on the Neighbor Lady Community Arts Project, the non-profit organization that Kitchen Sink became an energy- and money- consuming project of. While the former magazine staff will continue to work with the non-profit, Costa states that the publication has decisively met its end. "We won't ever revive Kitchen Sink magazine. We just can't. It's a money problem-not for lack of will, because we've worked really hard on it for five years. I think it's time to move on, because it's exhausting and I think having a chance to work on new plans will revitalize everybody. It's too expensive for us to do as a group of volunteers."

Not all affected publications are shutting their doors. For Bitch, the unpaid revenue has been crippling, but hasn't dealt a fatal blow. In February, Rasmussen told Punk Planet, "We got our notification saying they owed us $35,000, and our records show that they owe us $81,000." Months later, she has yet to get any indication of how much of that money the magazine may receive. "We haven't had any contact with their attorneys," she says. “I’d sent a couple of messages to Susan Uecker but I've only gotten generic responses back. I've heard conflicting reports about what (if any) money we should expect. Some people think publishers won't see any of it; others seem to believe that we'll probably get 10 cents on the dollar of what the IPA claimed to owe us."

As Costa and the Kitchen Sink staff wrap up fundraising efforts to get issue 16 out the door, they don't expect to know how much they will-or won't-receive until the end of summer at the earliest. "We'll have to wait until claims are processed before we hear back," she says. "I'm assuming none of us will know what happens until the end of the summer but I'm not very optimistic about it."

Members of the Independent Publisher's Network, the group that a number of former IPA members and publishers have organized in the wake, found that among the assets being sold off in order to repay the publishers are the mailing list contacts of those publishers themselves, in yet another twist that emphasizes how far the legacy of the IPA has strayed from the organization's original mandate. Responses on the group range from bemusement to renewed anger among former IPA members whose contact information is potentially being sold to spammers and direct marketing companies in order to help pay for the debts they themselves are owed.

On the Independent Publisher's Network online forum, former staffers and publishers are rebuilding that community that was crucial to the IPA's mission in its' formative period, before it became embroiled in economic controversy, before it tried its hand at the distribution business. But for these publishers, still recovering from the IPA fallout, the community must contend with a host of crises threatening the entire publishing world. Even as they work themselves out of an economic quagmire, the crucial question confronting these publishers is how to preserve the independent press as a viable concern while it faces multiple threats-from scarce distribution options, from increased bulk mailing rates, from the Internet, from continually declining advertising income.

Smith states that progressive publications have to become increasingly savvy about their bottom line. "Freestanding independent titles have to be smart about it," he says. "The winning formula at the moment is that you keep a tight rein on your expenses--that you diversify as much as possible, that you have some kind of subsidy in the form of donations or in the form of institutional sponsorship, or some sort of cash cow, and that you have a very well-defined mission and niche. If you believe that there has to be an independent press, then it's simply a matter of finding a way," he says. "In that sense, you can't focus on the negative, you have to seize on that and try to develop that. I just think we're in a very tough period right now."

Yet as an already-tough business grows only more difficult, Rasmussen emphasizes that both publishers and readers must take stock of what has been lost and commit themselves again to supporting independent voices. "I'm committed not just to independent media but radical and anti-capitalist media," says Rasmussen, "and I worry about the declining number of outlets for these perspectives. Independent print publishing is enormously difficult and costly, even more so when you're challenging conventions, like consumerism, or subsidizing your publication with corporate ad sales. We all need to realize that if we want these publications to continue, we have to do our part to support them."

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