Author Solutions Sold to Private Equity Firm

Posted by Victoria Strauss for Writer Beware

I was working on my usual year-end roundup post, when I spotted this, in PW:
Penguin Random House has sold its Author Solutions division to an affiliate of the Najafi Companies, a private investment firm that at one point owned Bookspan and made an offer to buy several hundred Borders outlets after the chain filed for Chapter 11. 
The terms of the deal, which closed on December 31, have not been disclosed.

Quoted in PW, AS's CEO, Andrew Phillips, promises that "day-to-day operations will not change following the sale." Phillips also says that he's "excited to be part of a company where Author Solutions will be more of a focus," which I find interesting: has PRH been letting AS languish, or will the sale simply make AS a bigger cog in a smaller wheel?

The sale isn't as random as it might appear. The Najafi Companies have been involved in book- and publishing-related ventures before; also, Najafi CEO Jahm Najafi, along with several family members, apparently used AS services to publish their own books. Plus, in 2013 AS's former CEO Kevin Weiss became CEO of (now-bankrupt) SkyMall, which at the time was owned by Najafi.

Andrew Phillips alludes to AS's future plans for growth, which include international expansion and partnerships with publishers. Although AS was expanding vigorously via these avenues prior to its 2012 sale to Penguin's then-parent company, Pearson, since the sale it has done little beyond cloning its Partridge service and launching a self-pub division of PRH's Spanish-language trade subsidiary.

Elsewhere, it has lost ground. In 2014 it closed two imprints--Harlequin's DellArte Press, which at the time of its demise had published just 16 titles, and LifeWay's Crossbooks--and lost its partnership with Writer's Digest and F&W Media, for which it had created Abbott Press. In 2015, it lost another long-standing partnership with the Authors Guild. And its market share began to shrink--at least through 2013, when a report by Bowker showed major production declines across all AS imprints.

At the time of AS's acquisition by Pearson--for what I thought was a surprisingly low price, given AS's then-dominant position in the self-publishing services world--I wondered whether AS was really a good investment, with its old-fashioned POD-centric production model, not to mention its large fees and dreadful reputation. Just over three years later, AS finds itself with a new owner. You do the math.

As for AS's reputation, it's as bad as ever, and problems still plague its many imprints: poor customer service, problems with payment, deceptive advertising, high-priced services (particularly marketing services). Will the Najafi Companies take steps to address all of this? Or will they, like PRH, simply reap the profits and look the other way?

Only time will tell. In the meantime, AS needs to change its logo...

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