Peter Cox’s Blog

“When I arrived at the company in August there had already been two offers for the business in the region of £8m. The agents having sold their business to CSS Stellar for £12m were offering in the region of £4m and taking whatever persuasive measures they could, including mass resignations, to ensure that CSS had no alternative other than to accept their offer. To me it appeared almost akin to corporate robbery and therefore I made it clear that no sale would take place.”

-         - David Buchler, chairman of PFD’s parent company CSS Stellar, in today’s Times

 It’s hard not to feel some sympathy for David Buchler and the shareholders of CSS.  After having agreed the sale the business – and presumably reaped a handsome reward – it is a bit much for the very same agents who profited from the sale to later demand an MBO at a fire-sale price.  Any purchaser would be entitled to think that they were buying the business as a going concern, and that the agency and its agents were not going to promptly mutiny.

One radical option available to CSS Stellar is simply to keep PFD going as an intellectual property holding company.  They do, after all, have a wonderful backlist of material.  This, together with a few strategic purchases in the IP area could turn the company into a profit centre with a relatively low cost-base and no pesky agents to deal with.

This affair, although a storm in a teacup in the wider economic context, has attracted so much bad publicity that I fear it will make any future investor in this area think twice before they press their hard cash into the hands of perfidious literary agents - and that’s a bad thing for our entire industry.