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Textbook authors on Cengage bankruptcy

A few weeks ago, TAA member and Cengage author Jay Devore posted a message on TAA’s Textbook Authoring E-List regarding Cengage’s bankruptcy. His post has solicited many thoughtful responses, a few of which I have included below. Please share your responses to Jay’s question and/or add to the discussion in the Comments section at the end of this post.

To all TAA members who are Cengage authors:

Do we authors have any reason to oppose the recent bankruptcy settlement? I have not sought legal advice on this, but welcome feedback from anyone who has (or hasn’t but is better informed than I am). Note that the recent Cengage mailing gave Feb 14 as the deadline for voting. This is incorrect; evidently there will be a new mailing with a future date as the deadline.

Jay Devore

Susan Stempleski: “I am a Cengage author and I have consulted my attorney regarding the proposed plan. As an unsecured creditor, I have been advised to vote to REJECT the plan because it does not (as it says in Part F (“The Committee’s Views”) of the Solicitation Letter from The Official Committee of Unsecured Creditors, dated November 26, 2013) ‘protect and preserve the rights and interests of unsecured creditors…'”

Marilyn Fordney: “You are right, Stan, authors will continue to receive their royalties as always from Cengage Learning. I am an author for Cengage. The amount listed on the legal documents does not always represent that as the royalty amount to be paid as that document was created on a specific date and may not reflect the amount to be paid when the royalty check is due. So the amount may be more than that listed.”

Jay Coakley, PhD: “The Cengage situation has implications that go far beyond authors being paid royalties, and it also applies to the other monopoly publishers in the college market. These mega-companies have generally had a difficult time adjusting to change, even though change has been easily observable on the horizon. Their bad decisions—trying to sustain their monopoly positions rather than buckling down and figuring out how to compete in a changing market—has led them to be sold to private equity companies (who couldn’t care less about higher education).

As Cengage, McGraw-Hill and others struggle with debt and other problems, they will be forced to lay off sales people, cut editorial staff, hire contract editors on the cheap, which means much more work for authors and less product quality unless authors learn to be their own copy and format editors, and photographers, and artists, etc. Marketing budgets will decline, mistakes will be made on royalty statements as accounting departments are outsourced to remote locations worldwide, tracking sales will become shoddy, new and inexperienced professional staff will make mistakes. And all of these things impact royalties, directly and indirectly. They also impact other decisions; for example, if an author is considering contracts from Cengage and a smaller, more financially secure publisher, what should be taken into account before choosing and signing.

Then there are other questions about the options for existing authors: When can contracts be nullified? Can authors request to have their contracts to publishers that offer more support? Are there conditions that we should know in connection with these things? I don’t know all the questions we should be asking right now, and I certainly don’t know any answers. But I think that these issues may be worthy of discussion now that we know that royalties, whatever they may be, will be paid by Cengage at this point in time. During such a transitional period in the publishing industry, it pays to be up on the possibilities.”

Please share your responses to Jay’s question and/or add to the discussion in the Comments area below.