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TFP Prognosis (updated) • 18 March 2008 • The SnowBlog

TFP Prognosis (updated)

I just read this poor fellow's blog post about the tenterhooks on which he finds himself over the changing status of his publisher, The Friday Project (TFP). Reporting of the TFP situation has formerly focussed on the takeover angle. And then latterly, some figures about the sorts of debts involved have surfaced. Setting aside my earlier thoughts about the tragedy of all this and focussing only on the finances, what would it take to save The Friday Project? Well, firstly someone would have to pay off their debts. I'm basing this all on sketchy public domain info, but let's just assume that their debts are at least the size of their cumulative losses, in which case we're talking about maybe 800k from recent reports. Then a buyer would need to inject enough capital to make the company solvent again. Wouldn't that have to involve a few hundred thousand more? Call it a bare minimum of a million pounds assuming the shareholders are happy to turn over control for free. But if the company's front list suggests it's poised for greatness, wouldn't they want at least a few pence on the pound? And if the front list isn't promising, then why would a buyer be interested?. (The only clue we have here is that existing investors have not seen fit to make more funds available and new shareholders have not presented themselves, which is not a particularly good sign.) At any rate, I could easily arrive at a figure approaching 1.5million while still being fairly optimistic about unknown levels of debt. That seems a lot to pay when we add in the fact that the company is insolvent currently, so its future publications schedule will be all over the map. I personally can't see anything resembling a 'takeover' or a 'sale' occurring. The administrators have hinted as much by talking of multiple purchasers. To me it seems fairly clear that the list is being sold off as part of bankruptcy proceedings and not with the intention of maintaining a going concern. This is a point of view, not a statement of fact, but I think those who are anxiously waiting for news should factor it into their expectations.
Update: Though the latest shareholders' newsletter on the TFP site is still dated January 2007, I did notice that Clare Christian, TFP's MD, had posted the following comment to one of the posts on her personal blog. I imagine there are plenty of people who could miss it there, so I've reproduced her words here: "Thanks everyone. I can answer one query. TFP has appointed an administrator and will be put into liquidation following a creditors meeting on 31 March. I can comment on the status of the sale in as much as we are in discussions and those discussions are pretty much complete but the publisher concerned are sticking to no comment until the deal is done so I suppose I have to too. Which is pretty ridiculous really as it appears that everyone else can name them and in fact the administrator has reported it today..." It's a strange situation when the administrators can state that HarperCollins are negotiating to buy some of TFP's assets, but TFP themselves apparently aren't allowed to comment. I think most of us have guessed this by now, but it's a confirmation that we're talking about a 'liquidation' here. Does anyone know much about bankruptcy proceedings? For the benefit of authors, does anyone know whether it's normal for publishing contracts to be reassigned or sold without it voiding the contract or requiring the author's permission? And for the benefit of creditors (like us), does anyone know in what order debts are usually paid? Because I think it's clear that the money raised from liquidating TFP's list will not cover all the outstanding debts. I know how loyal the TFP office staff have been and I'd hate to think of them losing out on wages (no joke on editorial salaries when living in London). On the other hand, I know that some of TFP's creditors are freelancers for whom fees are effectively wages too. (In case anyone is worried on our behalf, we should say that if our TFP invoices never get paid it will be painful, but not dangerous to our company.)


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