This news item may be a little hard to understand from the ‘One Ring’ perspective of many Tolkien readers, but Houghton Mifflin Harcort, the publisher of the Lord of the Rings books in the US and many of the ancillary texts (the library of extras) has filed for bankruptcy. First the news release from theOneRing.net and then some explanation of what happened. It wasn’t the Middle-Earth Epic and Hobbit Cash Cow that failed them, obviously.
U.S. Tolkien book publisher files for bankruptcy
May 23rd, 2012 by MrCereSome news from Publisher’s Weekly that shouldn’t impact readers of J.R.R. Tolkien but might be discomforting all the same. Long-time U.S. Tolkien publisher Houghton Mifflin Harcourt “officially filed for pre-packaged bankruptcy Monday morning, citing debts and liabilities of over $1 billion.”
The venerable company, in the publishing world for well over 100 years, has published every one of Tolkien’s works since “The Hobbit,” in 1938 which includes novels, essays and poems. The same company has published many noteworthy books about the author’s works including all 12 volumes of “The History of Middle-earth,” by Christopher Tolkien. (You can see the company’s Tolkien website if you click these words and you can read the rest of the Publisher’s Weekly story right here. Just a hunch but “The Hobbit,” will probably sell even more copies after December.
Publisher’s Weekly gets into the nitty gritty of how a company with these treasures digs a billion dollar hole:—-
Houghton Mifflin Files for Bankruptcy May 21, 2012
Houghton Mifflin Harcourt officially filed for pre-packaged bankruptcy Monday morning, citing debts and liabilities of over $1 billion. The filing is part of a restructuring of its finances that will cut its debt by $3.1 billion largely by having its lenders exchange debt for equity.
The first publicly available filings provide little financial details, other than listing its largest unsecured creditors that include Donnelley, owed $20.3 million, while Donnelley Asia Printing Solutions is owed $5,6 million. Williams Lea, a business processing outsourcing firm, is owed just under $21 million. Other large unsecured creditors include Marshall Cavendish ($6.7 million), Kue Digital Inc. ($4.5 million), and the Bulkley Dunton Publishing Group ($4.1 million. to pursue growth opportunities.
As it said when it first announced plans for the prepackaged filing, HMH issued a statement today that said it “will maintain normal day-to-day business operations throughout the restructuring process, and we expect no disruptions to our relationships with our customers, agents, authors, employees, business partners and suppliers. Additionally, our plan provides for our suppliers and vendors to be paid in full during and after this process and for our employees to continue receiving their usual pay and benefits.
HMH said it still expects to complete the restructuring by the end of June 2012.
If you read the whole thing, you’ll find the explanation of what happened buried in the comments where industry players lay out the disaster. Gotta love the frankness of the Publisher’s Weekly forum — no pulled punches here —
Laura Van Wormer · Founder, Publisher & CEO at Author & Company, LLC
Their primary business has always been print textbooks so one must wonder if their difficulties are hinged to their electronic business or if it is just fall-out from being taken over by first Vivendi (France) and then Riverdeep (Ireland) and then buying Harcourt from Reed. Certainly the economic meltdown has hammered them overseas. Here’s hoping for the best for Curious George.
Harold Underdown · Children’s Book Editor
Their difficulties are tied mostly to the debt generated by the leveraged buyout by Riverdeep and secondly to the shrinking textbook market. They have not been hurt by ebooks…
Cian O HAnnrachainn · Newcastle West
It was only a matter of time once Barry O’Callaghan started creating this behemoth. The debt burden was too high. Even before the economy tanked, many investors predicted the ultimate failure. The bankruptcy has less to do with the state of publishing and more to do with greed, hubris and a reliance on leveraging.
Dean Sault · Owner/Partner at Sault & Steward Associates
Brilliant–vendors get to exchange their accounts receivable for stock in a close-to-bankrupt company and hope the stock’s value doesn’t fall. So, what happens to stock prices when the vendors sell their newly issued “equity” in order to generate cash? Duh…prices plummet.
Ouch. Imagine if Bloomsbury or Scholastic went belly up! But in terms of the history of letters and publishing, Houghton Mifflin Harcourt (HMH) is a much bigger deal. Check out their web site and surf over to their history page. Even granted that HMH is a combination of older houses going back to the early 19th century, authors published by the several companies that have become this corporate hydra include Henry Wadsworth Longfellow, Ralph Waldo Emerson, Nathaniel Hawthorne, Harriet Beecher Stowe, Mark Twain, Henry David Thoreau.Willa Cather, Carson McCullers, Philip Roth, Paul Theroux, Sinclair Lewis, Virginia Woolf, George Orwell, C. S. Lewis, Antoine de Saint-Exupéry, Robert Lowell, T. S. Eliot, Robert Penn Warren, Günter Grass, Hannah Arendt, Konrad Lorenz, Italo Calvino, and Umberto Eco.
And J. R. R. Tolkien.
If you’re a mom or dad who reads to your children or if you grew up reading picture books (and besides Eustace Scrubb, I’m guessing that’s pretty much all of us), than you know HMH because you’ve loved the adventures of Curious George, Lyle the Crocodile, George and Martha, Martha of Martha Speaks, Tacky the Penguin, The Hundred Dresses and The Little Prince.
It may be a surprise, then, to learn that adult and children’s fiction really isn’t HMH’s mainstay. The first paragraph at their Wikipedia page spells it out: “[HMH] publishes textbooks, instructional technology materials, assessments, reference works, and fiction and non-fiction for both young readers and adults.” As you might expect for a company that sounds like it springs from the pages of That Hideous Strength, a monster of the education industry that holds the publication rights to the books about slaying this dragon, it’s supposedly a nightmare for employees. “The company was ranked the 10th worst place to work in America, according to a glassdoor.com survey in 2009.”
Hat tip to PT Steve for the One Ring and PubWeekly urls!
Wow. That’s terribly shameful for them. Thanks for the share, John!