Officials from RoweCom and its parent company Divine met with selected library customers and publishers in New York City January 14–15 to explore solutions to the financial failure of the subscription agency that some are calling the Enron of the library world. Divine officials said in the January 17 Chicago Tribune that RoweCom collected some $50 million from at least 3,500 customers, but spent the cash on operating costs and debt payments. Not enough was left over to pay publishers, and no one provided the company with a line of credit.
“We heard from RoweCom and Divine in a 14-hour meeting on the 14th,” Ohio University Collections Development Coordinator Kent Mulliner, who attended the meeting, told American Libraries. “But talks are still preliminary, and we need much more information.” Much speculation revolves around Netherlands-based subscription agency Swets Blackwell, which indicated in December it was in active negotiations to acquire RoweCom’s subscriptions operation.
Meanwhile, the New York State Attorney General’s office filed suit against Divine in early January for breach of contract on behalf of the State University of New York at Buffalo libraries. Information Today reported January 13 that the value of the subscription contract was $1.3 million, and the suit asked for $50 million in damages. However, Elsevier Science Vice President Mark Seeley, who chairs the committee of customers and publishers who met last week, told AL that Divine had reached an agreement with New York to delay the lawsuit until January 29.
Some RoweCom customers were lucky and had not yet submitted their 2003 subscription fees. Kathy Biel, deputy commissioner of finance at the Chicago Public Library, told the Tribune that she was still examining CPL’s $1.6-million order when she heard of the company’s problems.
Others, such as OU Library Director Julia Zimmerman, who estimates RoweCom owes the university about $915,000 in unfulfilled subscriptions, are looking on the bright side. “We’re taking this opportunity to take a serious look at our subscriptions,” she told AL. “We haven’t had a serials cut in quite a while.”
Posted January 20, 2003.