Magazine distribution in turmoil

Now that the California budget impasse has been settled, perhaps the Governor can help local magazine magnates resolve the mess paralyzing the magazine industry, leaving store racks empty. Last week, a judge in New York granted an antitrust temporary restraining order to Source Interlink, owner of Motor Trend and other SoCal automotive and action sports titles. The restraining order prohibits national publishers and some wholesalers from denying magazine shipments to Source Interlink's distribution business. Source Interlink filed an anti trust lawsuit claiming that Time Inc. and Hachette—“conspired” to force the company to sell its distribution business at a steep discount to rivals Hudson News and News Group. Court papers include the news that Source Interlink contemplated thousands of layoffs if it could not make payroll by February 13th. Time Inc. and Source Interlink reached a settlement yesterday.

Other defendants named in the complaint include American Media Inc., Bauer Publishing, Curtis Circulation, Distribution Services Inc., Kable Distribution Services, and Time Warner Retail.

This is all fallout from a price hike Source Interlink and fellow wholesaler Anderson News tried to pass on to publishers. The publishers pushed back and refused to pay. Anderson News subsequently suspended operations, forcing publishers to scramble for new distributors to service retail accounts. The result has been sparse magazine displays at the checkout stand. Weeklies such as National Enquirer, US Magazine and People have been the hardest hit by the changes. Folio magazine reports that the nation's printers such as Quebecor World are trying to cope. Quebecor has local offices on Wilshire Blvd.

More by Adrienne Crew:
Recently on Native Intelligence
New at LA Observed