A time to reorganize - Buzzworm's Earth Journals

We ran out money; we ran out of time. You may think it couldn't happen to you, but you're wrong. So be careful.

This is a tough column to write. After exploring the art and challenges of publishing a small magazine, and after having written 20 consecutive columns for FOLIO:'S Small Magazine Workshop, I now find myself fighting to keep our own small publication alive.

What happened? How does a publisher with my supposed qualifications--being a maverick, an innovator, an "expert" (deserved or not, I'm spitting a mouthful of black feathers) in small-magazine publishing--suddenly find himself upside-down? In my particular case, the answer is painfully simple: We ran out of money. A complicated story

How we did that is complicated, but there is a certain insight to be gained from the experience. Buzzworm, now known as Buzzworm's Earth Journal, is a magazine that started on a dream and a prayer. It has been staffed by people with passion and purpose, but not necessarily conventional training and expertise. Its mission goes beyond providing a substrate upon which to sell advertising. Rather, we publish because it is a worthwhile thing to do.

All along, it has tried to reconnect with the time when magazines were a product worthy of their price, not something purchased to get a premium or to enter a sweepstakes or because the "soft offer" made it easy. It has never been motivated by profit, but instead by belief in the power of journalism to effect change where change is needed.

In short, Buzzworm's Earth Journal was and remains a classic "small magazine," both by definition and cause. We are proud to represent one of the legions of smaller publications that are published for the love of the written word and captured image, woven together to make effective communication.

But we are also disappointed, dismayed--recently, at times, even ashamed--because we have not made the magazine a financial success. This for our investors, our vendors and the scores of writers and photographers who must wait too long for too little payment. Because despite all the editorial awards and favorable comment that a magazine can collect--and we've had our share--it does little good to gather red ink year after year.

Buzzworm's Earth Journal has continued to grow slowly--despite the crash of the magazine industry in the early nineties, despite the arrhythmic popularity of environmental journalism, despite an odd name (and an expensive trademark dispute when we changed it), despite a chronic lack of capital to weather these storms.

In August 1993, we were supposed to complete what was to be our final round of capitalization. We were confident that finally--after five years of dedicated nurturing and seemingly endless searching for financial support--with this money we might turn our little company profitable.

But the deal fell through. We had structured this final round as a "rights offering" (meaning that all existing investors buy a final round of stock on a pro rata basis as to their ownership of the company) to our 51 investors, and although more than half of them agreed to participate, it was not enough to raise the total needed.

We worked for months to amend the offering and get every investor in, but we simply ran out of time. By early December, we decided that the only way to save the magazine was to seek the protection of the bankruptcy court and reorganize the company's finances under Chapter 11.

Tremendous vendor support

This, however, is not a simple process. It has all the negative elements you might expect, but it provides a solution. With any luck, the bulk of our trade debt will be restructured to the satisfaction of most of the parties concerned. Our critical vendors--paper manufacturer, prepress bureau, printer, distributor, fulfillment service, etc.--have all shown tremendous support and have agreed to go forward with us.

At the time of this writing, we are working on our reorganization plan, which must be filed within 120 days. We are talking with new investors and reassuring our old ones.

The economy has improved and advertisers are getting bullish in the environmental arena. Our reach is greater, particularly with our name change. Clinton and Gore have brought environmental issues back to the forefront and we feel we've finally found the right editorial format to attract more mainstream readers and advertisers.

Once the court accepts our reorganization plan, we should emerge in time a wiser and stronger company. Meanwhile, it is business as usual for us, and, outside of the magazine industry, our fall from grace is of little significance. But personally, I am humbled and changed. It was frightening to witness how quickly things disintegrated once we got behind. Had we raised our money in time, would we be in this situation? It's doubtful. But the fact that the lack of such funds caused us to spiral downward with such velocity is further evidence of the fragile nature of small-magazine companies.

'Buzzworm's Earth Journal will survive this wound, of that I'm fairly sure. But it will require major surgery. And it will not be without a great deal of pain and frustration for many people. Other small publishers pay heed: Never loosen the reins of that wild, beautiful beast you're trying to ride. The journey is just, but in small-magazine publishing, the trail is always rocky.

Joseph E. Daniel is the founder and publisher of Buzzworm's Earth Journal, a six-year-old environmental magazine with a circulation of nearly 100,000.

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