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2600 Distributor Withholds Money, Magazine's Future In Limbo

timothy posted about 3 months ago | from the wish-I-could-make-this-year's-hope dept.

Businesses 59

First time accepted submitter themusicgod1 (241799) writes According to 2600, their distributor (Previously known as "Source Interlink", now recently renamed to "TEN: The Enthusiast Network") has decided to consolidate its resources and is keeping the money retailers paid for the last two issues of the quarterly magazine. 2600, in the meanwhile, is still busy trying to organize the upcoming HOPE X conference. However, according to the link: "In the worst case scenario, being ripped off at this level would make it almost impossible for us to continue publishing. We would have to make a lot of painful choices and cut back on things for no reason other than some outside company's mismanagement. Our readers have supported both our print and digital publications and we've been doing quite well overall." Note: As it says at the linked explanation, 2600 is not a charity, and they're not seeking donations -- but they would like you to buy the magazine (in print or Kindle form), and to attend the upcoming HOPE X conference. (I wish I could make this year's HOPE but can't; as conferences go, HOPE is a wildly good bargain.)

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Slashvertisement... n/t (-1)

Anonymous Coward | about 3 months ago | (#47339907)

n/t

Re:Slashvertisement... n/t (1)

Anonymous Coward | about 3 months ago | (#47343237)

nah, wait until some scumbag buys the '2600' name and uses it to push articles buy people pimping services and crap security software...

THEN they will be buying ads on Slashdot and that is when the slashvertisements will begin

lack of talent (-1)

Anonymous Coward | about 3 months ago | (#47339917)

Why did they not implement countermeasures to prevent this from happening?
They must not be very good at what they do.

Re: lack of talent (0)

Anonymous Coward | about 3 months ago | (#47339925)

Or.. Why haven't they taken the distributor to court? The longer they wait, less chance of recovery. Little sympathy

Did you bother to read the story? (0)

Anonymous Coward | about 3 months ago | (#47339969)

I'll paste the relevant bit for you, since actually doing basic research is beyond your capability:

This is only fair. Instead, we're hearing reports that only the part of the company that owes us money will be filing for bankruptcy, leaving the other part free to keep operating

Re:Did you bother to read the story? (2)

Casualposter (572489) | about 3 months ago | (#47340139)

Well, then perhaps the advertisers in their magazines should be aware that they are stealing from or attempting to steal from 2600 magazine. Sure it is a hacker magazine, but if they will steal from hackers, they will surely rip off the automotive enthusiasts.

2600 should file claims immediately both civil and criminal. Keeping about $100,000 is enough to get big agencies interested and it is certainly not legal to spin off the "bad" parts to a "bankrupt" entity merely to avoid paying the bills.

Should be fun to watch.

Re:Did you bother to read the story? (4, Informative)

gbnewby (74175) | about 3 months ago | (#47340229)

Advertisers: not so much. In fact, the 2600 marketplace section (2 pages at the back of the magazine) is free, and only available to subscribers. There is no paid advertising in 2600 Magazine.

Re:Did you bother to read the story? (0)

Anonymous Coward | about 3 months ago | (#47340805)

advertisers in their magazineS...automotive enthusiasts.

The publisher has other publications, some of which with advertisements and those magazines are likewise vulnerable to the same BS.

Re:Did you bother to read the story? (5, Informative)

jythie (914043) | about 3 months ago | (#47340275)

Two basic problems.

(1) such lawsuits are expensive to mount, if 2600 is hurting for 100k in the first place, chances are filing a civil suit would hurt them pretty badly too... which brings us to...

(2) while slimy, this is a legal practice. If you do the paperwork right you can even buy a company, transfer your debt to them, then split them off again. Poof your debt is gone and some other company is ruined. So if 2600 DID file a lawsuit, their chances of winning would be slime unless their distributer messed up the paperwork.

Re:Did you bother to read the story? (2)

lgw (121541) | about 3 months ago | (#47341491)

Bankruptcy isn't a free-for-all, though. Judges (at least in the US) don't usually look kindly on blatant and obvious attempts to shirk debt. I suspect the publisher is on its last legs, though (most magazines are these days). If that's the case, this may not be some slimy legal hack, but genuinely the only way for a portion of the published magazines to keep going. It's still a bit odd, though, as "accounts payable" are quite high on the totem pole in bankruptcy proceedings (I forget whether AP or salary due is at the top, but both come before any interest by owners or investors).

Re:Did you bother to read the story? (1)

HiThere (15173) | about 3 months ago | (#47342173)

Well, I can't challenge usually, but I also doubt that you can support it. What I can do is refer you to the rather thoroughly documented SCO Group bankruptcy. See the Groklaw record for details.

Re:Did you bother to read the story? (2)

Lumpy (12016) | about 3 months ago | (#47341693)

This is 2600. Someone needs to simply publish a lot of Executive information as well as public facing IP addresses and the community will fix it for them.

Re:Did you bother to read the story? (3, Insightful)

Charliemopps (1157495) | about 3 months ago | (#47340387)

Well, then perhaps the advertisers in their magazines should be aware that they are stealing from or attempting to steal from 2600 magazine. Sure it is a hacker magazine, but if they will steal from hackers, they will surely rip off the automotive enthusiasts.

2600 should file claims immediately both civil and criminal. Keeping about $100,000 is enough to get big agencies interested and it is certainly not legal to spin off the "bad" parts to a "bankrupt" entity merely to avoid paying the bills.

Should be fun to watch.

You're assuming bankruptcy law has anything to do with common sense. Back in the 90s I went and got a pager and paid for 1yr of service up front. The company literally went out of business the next day. I got to use the pager for about a week before it just died and there was no service, and no-where to call. I got ripped off.

2 or 3 years later I got a notice from a collections company. Another company had bought my pager providers "Assets" and claimed that I had never canceled my service, it auto renewed every year, and I owned them for 3 years of service. I'm the type that will spend $1000 to force you to give me the $100 you owe me, it's the principle in my mind. I immediately requested my money back for the entire service. I'll skip all of the details but after a year and a half I'd wasted a lot of money and the ruling was that this company had bought the "Assets" of the previous one, so they had no obligations to pay me back, but I didn't own on the auto-renewed service because there was no way for me to cancel since the company was out of buisness.

Even if 2600 had standing, and I have no idea, by the time they get this resolved they'll be bankrupt.

Re:Did you bother to read the story? (1)

JWSmythe (446288) | about 3 months ago | (#47342639)

Unfortunately, it's a fairly standard business tactic.

Corp X has assets and debts. They sell the assets to Corp Y, which includes products, staff, equipment, etc. Corp X holds the debts. Wen they declare bankruptcy, there's no way to recover the debt, so it's gone.

Corp Y may be operating in the same office, with the same people at the same desks, doing the same jobs. The only real difference is that employee paychecks now say the new name, as does all new marketing materials and letterhead.

So what about the people owed money from Corp X? They get nothing. Or if they're lucky there's something left and they'll get pennies on the dollar.

Sometimes it's done for the right reasons, and they will work out deals with those owed. For examine (if I read the article right), 2600 is owed $100K. That may be broken up to $10K/mo over 10 months, or $1K/mo over 100 months. In the end, they get their money. Unfortunately when they already have high dollar events scheduled, it hurts.

Hello, McFly (3, Funny)

cravey (414235) | about 3 months ago | (#47339945)

Has anyone pointed out to the distributor precisely who the target audience for the publication is?

Next week on pastebin: All of their dirty laundry.

Re:Hello, McFly (1)

NoNonAlphaCharsHere (2201864) | about 3 months ago | (#47340037)

Unfortunately, the renamed distributer (TEN: The Enthusiast Network) (my $deity how pretentious) now says on their website:

The TEN audience represents the largest concentration of males 18-34 within the automotive and outdoor-adventure markets.

So the crossover between that and the 2600 audience is approximately nil, making a successful boycott unlikely. Nuking them from orbit on social media however...

Re:Hello, McFly (1)

GNious (953874) | about 3 months ago | (#47340153)

Not sure the previous post was about boycotting, as much as hacktivism ....

Re:Hello, McFly (1)

Bing Tsher E (943915) | about 3 months ago | (#47340547)

I doubt if an audience of customers from the 'automotive and outdoor-adventure market' are gonna care about social media.

The social media fever swamps don't really intersect much with the mud truck crowd. Totally different form of muddy water there.

Re:Hello, McFly (0)

Anonymous Coward | about 3 months ago | (#47341825)

Meh, same trailer, different park...

Re:Hello, McFly (1)

ArchieBunker (132337) | about 3 months ago | (#47340939)

Chances are if you're pretty bright then 2600 magazine won't be of much interest to you.

Re:Hello, McFly (0)

Anonymous Coward | about 3 months ago | (#47341851)

Yeah, we get it, you're more Catholic than the Pope. Or more leet than Kevin Mitnick. Whatever. STFU.

Bulk Back Issues (1)

Bob9113 (14996) | about 3 months ago | (#47339953)

As it says at the linked explanation, 2600 is not a charity, and they're not seeking donations -- but they would like you to buy the magazine (in print or Kindle form),

If you feel like buying the current issue isn't enough, and/or can't make it to NYC for the conference, they have bulk prices on back issues [2600.com] ($5/issue or less). I don't regularly read 2600, but I think they are an important resource for the security community.

feeding ourselves to gargoyles (-1)

Anonymous Coward | about 3 months ago | (#47339971)

pretending we're innocent virginarians. motive = results without fail

Online? (1)

rossdee (243626) | about 3 months ago | (#47339995)

Say, it seems to be available on Amazon' Newstand for Kindle. Do you know if the sales there go through this fscking distributor, or does the money go directly to the magazine?

Re:Online? (0)

Anonymous Coward | about 3 months ago | (#47340045)

I believe they've said that those are direct, but I might just be crazy.

Re:Online? (0)

Anonymous Coward | about 3 months ago | (#47340377)

I believe those are direct to them. The next edition will also be coming out in July, and this is with a new distributor so they will get paid for this one. I will probably buy a few and hand them out to friends, leave in the bathroom at work, etc. Hopefully I will get them a new reader.

So.... (1)

caffiend666 (598633) | about 3 months ago | (#47340025)

A publishing company decided to piss off and steal from a bunch of really organized hackers? This should be fun to watch....

Re:So.... (2)

Bing Tsher E (943915) | about 3 months ago | (#47340567)

The 2600 editors will probably publish photographs of the payphone outside the publishing companies office in their next issue! The publisher had better beware!!!

Also, there will probably be a construction article that says to "connect a 'red-violet-brown' resistor to the long lead of the LED."

And maybe a debug script for an MS-DOS virus.

All in all, a veritable threat.

2600 (4, Funny)

Anonymous Coward | about 3 months ago | (#47340061)

I am surprised a magazine devoted to the original Atari video game console is still going

Re: 2600 (1)

Anonymous Coward | about 3 months ago | (#47340141)

Not sure if trolling or...

http://en.m.wikipedia.org/wiki/2600_hertz

Re:2600 (1)

JimTheta (115513) | about 2 months ago | (#47353525)

This joke is so old that I don't even need to explain it to my mom.

Source Interlink Distribution shuts down (5, Informative)

NoNonAlphaCharsHere (2201864) | about 3 months ago | (#47340083)

From the letter Source Interlink sent to their publishers here [foliomag.com] :

As I am sure you are aware, over the course of the last five months, Source Interlink Distribution Company has been vigorously engaged in discussions with publishers and national distributors across our business in an effort to correct the inefficiencies and unnecessary redundant costs that currently plague the wholesale distribution channel.

In conjunction with that effort we:

* Circulated a Summary of Terms to each national distributor in mid-March as a basis to begin that dialogue, and
* Met with each of the national distributors and certain publishers on multiple occasions throughout the last two months in an effort to reach common ground.

While we have made significant progress in finding mutually agreeable solutions with publishers and national distributors alike, one of our largest suppliers has recently decided to cease supply and move in a different direction. As such, it's with a heavy heart that I am writing to advise you that Source Interlink Distribution Company will be discontinuing all operations in the near future.

In other words, they tried to Wal-Mart strongarm their distributors/vendors, and when the biggest one said "fuck you" and went elsewhere, their business imploded. And so an uber-distributer middleman dies. So sad.

Contact form without a captcha (0)

Anonymous Coward | about 3 months ago | (#47340221)

I'm curious, did someone else noticed that?

Why would buying the magazine help them? (0)

Anonymous Coward | about 3 months ago | (#47340225)

If the distributor has already shipped the issues to bookstores and pocketed the money, would it not be the best course of action NOT to buy the magazine to send the message? Would it not be better to instead buy back issues until they find a better partner?

Same legal entity; different name, bankruptcy (1)

Anonymous Coward | about 3 months ago | (#47340239)

According to whois look-ups the company - Source Interlink Media, LLC - owns the 'new' domain name. As the group of companies is in chapter 11 bankruptcy the trustee and court should be (made) aware of the debt and the activities of enthusiastnetwork.com, since the bankruptcy filings do not describe moving operations to enthusiastnetwork.com:

"June 23rd 2014 Case 14-11553-KG SOURCE HOME ENTERTAINMENT, LLC, et al." http://www.deb.uscourts.gov/recently-filed-chapter-1115s

"Declaration in support of first-day motions" http://bankruptcy.morrisjames.com/files/2014/06/0002-Declaration-of-S.-Dube-in-Support-of-First-Day-Motions.pdf

It is worth noting that 5,500 people have already lost their jobs as part of the restructuring.

It would seem that 2600 Magazine will be an unsecured creditor.

Re:Same legal entity; different name, bankruptcy (1)

Anonymous Coward | about 3 months ago | (#47340315)

Judge Kevin Gross

Chief Judge
6th Floor, Courtroom #3

824 North Market Street
6th Floor
Wilmington, DE 19801
302-252-2913

Re:Same legal entity; different name, bankruptcy (1)

MouseTheLuckyDog (2752443) | about 3 months ago | (#47341753)

Oh oh. Isn't this the guy who presided over the SCO bankrupcy?

Print is dead (0)

Anonymous Coward | about 3 months ago | (#47340263)

Just further proof Print is dead.

Fuck 4 c0m (-1)

Anonymous Coward | about 3 months ago | (#47340325)

"doing quite well"? No cash reserves, credit line? (4, Interesting)

SuperBanana (662181) | about 3 months ago | (#47340487)

"we've been doing quite well overall."

Except for the bit where your business had little cash reserves, and apparently no line of credit?

2600 is a business with plenty of history and should have lots of proof they're doing OK, if that is in fact the case. Getting a line of credit to make up for the lost issue or two shouldn't remotely be a problem...which means one of three things: they're not doing "quite well", they're incompetent, or they are, in fact, trying to take advantage of the community.

Re:"doing quite well"? No cash reserves, credit li (0)

Anonymous Coward | about 3 months ago | (#47340633)

I understand it is in a nerd's nature to be paranoid but if 2600 hasn't proven to be a trustworthy entity by now then practically none could ever do so. They get money from sales and subscriptions, not ads, and they stay unbiased and true to their mission. So I think you have a false trichotomy. You just don't like the definition of "quite well" they are using, and you aren't qualified to judge that term since you have no experience with the field.

Re:"doing quite well"? No cash reserves, credit li (1)

Xenx (2211586) | about 3 months ago | (#47343457)

It only sounds like they operate on a tighter budget than some larger magazines would. Also, "We do intend to survive, even if the actions of TEN: The Enthusiast Network put us massively into debt." It sounds like it's less about being able to get a line of credit, and more about them hoping they don't have to.

Re:"doing quite well"? No cash reserves, credit li (1)

tlhIngan (30335) | about 3 months ago | (#47343603)

2600 is a business with plenty of history and should have lots of proof they're doing OK, if that is in fact the case. Getting a line of credit to make up for the lost issue or two shouldn't remotely be a problem...which means one of three things: they're not doing "quite well", they're incompetent, or they are, in fact, trying to take advantage of the community.

The problem is, the magazine industry, much like the newspaper industry, isn't doing all that great. And niche publications like 2600 aren't doing that great either. First, they don't take advertising, which means if you've actually shopped 2600, it's among the more expensive publications out there for what you get on the surface. It's actually very high priced.

Second, it's not like they're a mainstream magazine - while you can probably find them at Barnes and Noble, they're not really available elsewhere other than at a specialist magazine retailer (mostly again, from a cost and audience perspective).

Third, well, the information in it you can probably find it online, like most other computer and information technology magazines. And that is killer. Most other computer related magazines have stopped printing a deadtree edition for that reason.

Finally, while they have gone electronic, I'm not sure if their distribution is all that great - I see them on B&N, I don't know about Amazon as I don't use Amazon for ebooks.

Their distribution in the end isn't that big - I have to look it up, but every magazine sent through the USPS as media mail has to have a distribution panel in it where it describes how many issues were printed, sold (broken out by subscriptions and retail sales), returned, and pulped. I'm fairly certain it isn't a huge number - perhaps 10,000 or so issues per quarter. That isn't a lot of money after printing and other costs.

Basically they've been the victim of the internet age.

Re:"doing quite well"? No cash reserves, credit li (0)

Anonymous Coward | about 3 months ago | (#47343847)

"Getting a line of credit...shouldn't remotely be a problem"

Either you don't run a business and don't have a clue, or you or someone you pay blows your bank manager.

Oh, you can boycott - sorta (1)

scotts13 (1371443) | about 3 months ago | (#47340503)

I have been personally ripped off more than once by companies that "went out of business." The parentheses because, in many cases (like this one) the closure is not what people visualize, with chained doors, etc. There are still assets, employees, offices. In one case I was able to recover what was owed by calling the officers of the "old" company at their "new" jobs, every day, until I got my money. Did they legally owe it to me? Technically, probably not. I shamed/annoyed them into it.

I don't know 2600 from The Readers Digest, but I DO read several titles distributed by TEN: The Enthusiast Network; in one case I know the people at the magazine personally. I'll be writing letters and having conversations with these publishers about the people they're doing business with.

Re:Oh, you can boycott - sorta (2)

Impy the Impiuos Imp (442658) | about 3 months ago | (#47340585)

20 years ago, a department store chain called Crowley's in the midwest went out of business. They did so right after Christmas, refusing to honor all the gift cards people bought, claiming they were "contracts" now null and void.

They sold all those gift cards knowing they were going out of business. Nobody went to jail. My dad got ripped off for $200 for a gift card he bought for my grandma.

Why not give TEN a call? (2, Interesting)

Anonymous Coward | about 3 months ago | (#47342475)

949-705-3100

Ask why they have not paid 2600 yet.

Re:Oh, you can boycott - sorta (0)

Anonymous Coward | about 3 months ago | (#47343105)

That's happened in New Zealand quite recently. I can't recall if it were Whitcoulls or some other company, but there was a big stink kicked up about it and nothing happened.

SID vs SIM/TEN (2, Informative)

Anonymous Coward | about 3 months ago | (#47340655)

I actually worked for TEN up until ~May. The 'legal' side of things is that Source Interlink was a single company. It then split into Source Interlink Distribution (whom owes 2600 money and does/did the distribution for magazines) and Source Interlink Media (who owns a ton of magazines).
SID lost the Time Mag deal and decided to close its doors. Sadly, 2600 is now needing to extract blood from a (dead) stone. SIM underwent some major internal upheaval and renamed themselves to TEN and laid off a ton of people.

At this point, the people 2600 needs to talk to are part of a company that is closing/closed. I dont know what their options are as IANAL, but I think they're going after a company that has nothing to do with the distribution of their magazine and therefore nothing to do with said profits. This happens all the time when companies go under and its sad. My heart goes out to 2600, as I was an avid reader back in my high school days of learning to phreak.

Re:SID vs SIM/TEN (1)

HiThere (15173) | about 3 months ago | (#47342243)

So you're alleging pre knowledge of malicious fraud? (As opposed to inadvertent, where you expected to be able to pay, and can't. I still call that fraud, but not malicious.)

Re: SID vs SIM/TEN (0)

Anonymous Coward | about 3 months ago | (#47342831)

Sounds more like he's just alleging knowledge, and if I had to guess, is one of the "tons of people" that was laid off. Working somewhere doesn't equate to controlling business practices anymore than being on a train equates to conducting it.

Tragically, what you may define as fraud also doesn't necessarily have any baring on the legal definition of or what the courts determine to constitute "fraud."

Re:SID vs SIM/TEN (1)

stox (131684) | about 3 months ago | (#47342825)

If TEN split knowing that one of the entities being split could not fulfill its obligations, that would be a fraudulent conveyance. The courts invalidate the split and will force TEN to pay off the obligations in the long run. Of course, that will take years to wind through the court system. In the mean time, the lawyers will make a fortune.

Distributor's distributor (1)

Anonymous Coward | about 3 months ago | (#47340663)

Source/Ten actually utilizes a larger distributor for most of their volume. Turns out they owe that -single- partner ~12 million dollars. Plus, they're weird for a production company anyway. Lots and lots of unnecessary office space, empty legacy warehouses from this or that project. They basically hit a critical mass of mismanagement and accumulated resource costs from something like ~40 yrs of operation.

Why would I buy 2600 or attend HOPE X? (1)

BitZtream (692029) | about 3 months ago | (#47340711)

If the distributor/organizer isn't paying out when they should, WHY THE FUCK WOULD I BUY AN ISSUE OR ATTEND THE CONFERENCE?

Timothy, you're a fucking moron.

Re:Why would I buy 2600 or attend HOPE X? (1)

wagnerrp (1305589) | about 3 months ago | (#47340801)

Presumably the distributor is only distributing the print version, not the Kindle version, and has nothing to do with the conference.

Re:Why would I buy 2600 or attend HOPE X? (1)

Sesostris III (730910) | about 3 months ago | (#47341081)

Perhaps Timothy actually read the article, specifically the second paragraph where they say;

This caused us to scramble to find alternative methods of getting our magazine into stores around the world, a feat we accomplished without too much difficulty.

Re:Why would I buy 2600 or attend HOPE X? (0)

Anonymous Coward | about 3 months ago | (#47341711)

BitZStream... the voice for the I cant read nor do I have an IQ above 85 crowd cince 1998.

every day I get more amazed at how fucking stupid you are.

All my love...... APK

Buy a Ticket (0)

Anonymous Coward | about 3 months ago | (#47342541)

Even if you cannot attend, you still can buy a ticket. Cheap bastard.

Re:Buy a Ticket (0)

Anonymous Coward | about 3 months ago | (#47343131)

Not all of us are rich enough for that shit.

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