The economic situation in our country has not only hit the retailers and brand name companies in our industry, it has also taken its toll on the material we read. Source Interlink, the company that publishes Skateboarder, Snowboarder, Surfing, Surfer and five other action sports magazines and web sites, said today that it has filed for Chapter 11 bankruptcy.
The special interest media company, in total, publishes a total of 75 magazines and 90 web sites, described the bankruptcy as a prepackaged filing. According to the company’s website: “A “pre-pack” is a court proceeding in which the creditors will be paid in full or have agreed to take less. It is used to implement a restructuring of a company’s capital without disturbing its daily operations. A “pre-pack” is the quickest and easiest form of restructuring through the bankruptcy courts. Using this method, we expect to complete our restructuring in about 30 days.”
The statement also addresses the status of the companies immediate operation,
“First and foremost, Source Interlink Companies wants to assure you that Source is continuing to operate its business without interruption.” The statement also goes on to say, “While we restructure, we plan to continue providing our customers with the outstanding service they have come to expect. We will continue to partner with our advertisers, publishers and vendors to ensure that the reorganization process is transparent to those we serve.”
According to Shop-Eat-Surf.com, in documents filed with the U.S. Bankruptcy Court in Delaware yesterday, Source Interlink estimated that its assets range from $1 million to $10 million, but that its liabilities exceed $1 billion, and that it has 50,000 – 100,000 creditors.
While business is to remain as usually, it is just another example how the domino effect from small business trickles up to effect larger businesses. Marketing and media are usually the first avenues to feel the crunch when times are tough, it will be interesting to see if this move effects the content at all in some of the action sports industries go-to publications.
Posted by Megan on Tuesday, April 28th, 2009 in Industry.