Deal is off for Bancroft, Maidstone Venture capitalist, publisher differ on control issues

Publishing

August 21, 1998|By J. Leffall | J. Leffall,SUN STAFF

Clarification

An article in the Business section Aug. 21 stated that Bancroft Press had backed out of a venture capital deal with Maidstone LLC of New York. In fact, the proposal was not made final because the companies could not agree on terms.

The article also described Bancroft as a regional, niche publishing house. Bancroft publisher Bruce Bortz characterizes the firm as a national publisher of trade books. He noted that it has a contract for national distribution with the National Book Network of Lanham.

Bancroft Press, a regional publishing house, has backed out of a $1 million deal with Maidstone LLC, a New York venture capital firm, blaming differences over control of the company.

Nelson L. Bond Jr., president of Maidstone, said yesterday that he and Bancroft owner Bruce Bortz disagreed on changes that new ownership would have brought.

"The issue was a very common one. Bruce had been his own boss and wanted to remain so," Bond said. "We would have brought a more structured approach, and that's not what he was looking for."

Bortz was unavailable for comment yesterday. But Sarah Azizi, an editor at Baltimore-based Bancroft, said Bond and his partners expected a voice in marketing and editorial decisions.

"Regulating how many books one publishes is one thing because that's a financial decision," Azizi said. "But when it comes to deciding what books to publish -- that's too much control. Instead of putting a book out there and learning to love it, you have to love it first and learn how to market it, and you have to have an eye for books."

The deal to invest in Bancroft was announced June 21. Bortz sought capital after some books failed to sell as expected and a potential movie deal fell apart.

"It became a question of whether I could generate capital in-house," Bortz said in an interview last month. "We didn't generate huge dollars, so finally it became necessary to seek help."

Azizi said the company will not continue to seek outside capital. "Bruce and I are confident that we can achieve financial success without outside investment," she said yesterday.

Maidstone did advance money to Bancroft as a partial payment for the acquisition, Bond said. He declined to disclose the amount but said it now is regarded as a loan.

Azizi said the loan will be repaid "in a timely fashion."

Bancroft published its first book in 1992. Since then it has published about 11 others. All of its works have been written by current or former journalists.

Bancroft is counting heavily on "Live by the Sword," an examination of the assassination of President John F. Kennedy that is scheduled to be published this fall.

It is difficult for publishing houses such as Bancroft to succeed, said Peter Appert, an analyst with BT Alex. Brown in San Francisco. "Broadly speaking, this area that this company is in, niche trade publishing, has the lowest margin in the book publishing industry," he said.

One of the biggest obstacles for regional publishers is distribution. Retailers, with high inventories and low profits, are reluctant to make a major commitment to a niche publisher.

Pub Date: 8/21/98

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