The IPA’s Domino Effect:The Enron of Indie Media Leaves Publications in a Pinch

This article was recently included in the Alternative Press Index’s “Radical Picks of the Month” for January.

Emerging from of the ‘zine scene of the late 1980s, and fueled by the rising tide of activism that emerged in full force at the 1999 Seattle WTO protests, Clamor Magazine was small, scrappy and widely loved. In 2006 the glossy quarterly – whose professional looks didn’t stop it from embracing and even seeking out first-time writers – expanded its operations to include the Clamor Infoshop, a consignment and distribution service that helped other lefty projects merchandise their materials. Winners of multiple magazine awards over its six-year history and aided by the Independent Press Association (IPA), a nationwide support and distribution network of primarily small and medium-sized magazines founded in 1996, Clamor was on its way up.

Barely within the span of a month in late 2006, however, first Clamor, then the Clamor Infoshop, and then finally the entire IPA were gone, victims of a spiraling tidal wave of financial mismanagement that began in San Francisco and has claimed victims in Bowling Green, Ohio; Chicago, New York City and beyond. Now, nearly every small lefty magazine in the United States – along with a half-dozen other
projects and a consortium of ethnic papers in New York – faces an uncertain, even bleak, future. For many of them, there is no future: In addition to Clamor, the magazine Kitchen Sink has recently closed, at least two other publications are rumored to have shut their doors, while many more teeter on the brink of extinction.

THE FINANCIAL ABYSS

In September 2006, even as Clamor editors began to seriously grapple with the possibility of their magazine’s demise, the executive director of the San Francisco based IPA, Richard Landry, was touting the IPA’s success in an online interview with the radio show AfterTV. Founded in 1996 by John Anner, the IPA was a membership organization composed of niche magazines like Clamor, Kitchen Sink, Bitch and Tikkun. Designed to advocate for and provide services to more than 500 members, the IPA
ran a distribution service for more than 100 magazines, engaged in marketing work, organized an annual publishing conference and offered its membership access to an emergency loan fund.

But even as Landry was publicly bragging about his organization’s past successes, the IPA – like Clamor – was staring into a financial abyss. On Dec. 27 the IPA dissolved, still owing its members (many
of whom had, in the past year and a half, become its creditors) tens or possibly hundreds of thousands of dollars.

A number of different arguments have been advanced to explain the collapse of the IPA. The IPA’s letter to its members announcing its closure speaks of “a very harsh newsstand market,” a dry-up in foundation
funding and industry consolidation.

Other observers blame the Internet – “We’re only still beginning to see the full impact of the Internet on every corner of the media industry, and there’s much more upheaval to come,” says CUNY Professor
of Journalism Jeff Jarvis.

But for an astounding number of former IPA members and ex-staffers, the answer boils down to two words: Richard Landry.

The IPA failed “because of vast organization and financial mismanagement,” says Anne Moore of Punk Planet. “I don’t think we can blame anything else for this issue. All the stuff about media conglomeration that they’re talking about doesn’t make up for the fact that it was dishonesty, obfuscation and vast amounts of money going to places it shouldn’t have gone that caused this.”

The Indypendent was unable to reach Landry for comment. The IPA’s fiduciary services firm, Uecker & Associates, failed to return calls.

For months, a feeling of a slow strangulation had been building around the IPA membership, even as Landry touted the rejuvenation of the organization to just about anyone who would listen. In July 2006, a major investigative piece by the SF Weekly raised the curtain on what appeared to be years of financial mismanagement of the IPA’s magazine distribution arm, Big Top Newsstand Services (now called Indy
Press Newsstand Services). As of early 2006, according to the Weekly piece, IPNS owed dozens of its magazine clients a total of more than $500,000, a huge sum of money in a tiny, undercapitalized industry.

THE PERILS OF DISTRIBUTION

A complex and logistically cumbersome enterprise, magazine distribution forms the essential link between the process of print media creation and the final, financial exchange in which a publication is purchased from the shelves of a bookstore– increasingly, one of the “big box stores” that dominate the retail market. Because the money chain in the magazine world travels backward, most magazines don’t
see revenue from newsstand sales immediately, making accurate accounting and financial transparency on the part of the distributor essential.

Big Top’s financial woes seem to have predated Landry’s arrival at the IPA in 2003. In discussions with SF Weekly, some current and ex-IPA employees noted that the organization was using non-Big Top funds to cover Big Top expenses. Nevertheless, between 2003 and 2005 – two years after Landry first joined the organization as IPA founder John Anner’s replacement – the entire IPNS distribution operation began to unravel. Promised payments never arrived in members’ checking accounts, and the IPNS and its magazines began to disagree increasingly on the amount of money they were owed. “Now if there had been normal, sane people at Indypress,” says Jeremy Adam Smith, who served as interim Executive Director of the IPA between the tenures of Anner and Landry, “this wouldn’t have been a big deal– it would have just been part of doing business. But because there weren’t sane people there, the Indypress response when the membership asked abut money was always ‘… off, stop calling us, we’ll send you some money, now leave us alone.’”

For many of the small magazines that made up the IPA’s membership, a worse blow than the lack of money was the inability to get any information out of Landry and the IPA management until it was almosttoo late; the SF Weekly article documents months of increasingly acrimonious public email exchanges, forced non-disclosure agreements, fired board members and opaque statements about the true status of the IPA from Landry and what one ex-member referred to as his “sycophantic” board of directors. Abby Scherr, founder and former director of the IPA office in New York City, recalls a similar combination of disorganization and opacity. “I once attended a board meeting where the board did not seem to care that the executive director could not produce a budget or even viable financial reports,” she writes.

In the summer of 2006, with the publication of the SF Weekly article pending, Landry and the IPA seemed to face up to the public relations and financial disaster that the once-proud organization had become. They first announced an agreement with the Canadian-based Disticor Magazine Distribution Services; Disticor would handle the logistics of the actual distribution of IPA member titles, while the IPA itself would continue to market its members. At about the same time the board, looking to streamline its mission, mandated that IPANew York spin itself off into a separate organization (see sidebar). Finally, Landry offered his members a deal: sign a threeyear, three-way contract with Disticor and the IPA and be paid back “within weeks,” or strike out on their own, with undetermined financial consequences. Some of IPA’s larger publications – Bitch, Tikkun, Mother Jones – took the opportunity to leave. Many smaller
magazines, however, desperate for cash, saw no alternative but to re-sign.

One of those that did re-sign was Clamor. “Signing the Disticor deal was good for future sales,” says Jen Angel, Clamor’s co-founder. “Even newsstand consultants looked at the contract and thought it was OK.” But faith in the professionalism of Disticor was different than actually having much hope that IPA would make good on what it owed its members. Moore of Punk Planet, who held her nose and re-signed, agrees. “We didn’t have much choice [to sign the new contract],” she says. When asked whether Punk Planet held out much hope of actually getting its money back, Moore laughs. “Well, getting our money back was written into the contract and was promised to us a number of times by Richard Landry directly. But then again, we’re not stupid.”

“What shut us down was the constant lack of communication and information from the IPA over the past year,” says Carla Costa from the now defunct magazine Kitchen Sink. “They saw this coming but did not give the magazines the warning they needed in order to prepare. That’s a fact that is not just bad business practice, it’s also an appalling way for one nonprofit organization to treat many others.”

The closure of the IPA has, at least for now, rendered many of the discussions about eventual payback moot. After repeatedly trying to contact the law firm handling the IPA’s bankruptcy, Amy Schroeder
of Venus Zine received an e-mail in early January informing her that she would eventually receive the paperwork through which to document what her magazine was owed. “Dan [Sinker, of Punk Planet] said
that he thinks all that’s left at the IPA is some desks and computers,” says Schroeder. “Venus Zine is owed much more than that – I think most of the publications are.”

While the IPA still promises it will make good with those it owes, the terms of the General Assignment of Creditors under which it dissolved meant now that both the debts and assets are in the hands of a third
party. Even if the magazines do eventually get something back, “I have a feeling there are big differences between what the magazines say they are owed and what the IPA says they owe the magazines,” speculates Jeremy Smith. “I don’t know that this is true for sure, I’m guessing here, but I saw it happen while I was there so I don’t see why it wouldn’t happen now.”

‘MAY AS WELL BE ENRON’

Without a commitment to honesty, transparency and its organizational mission, writes Smith on his weblog, “a non-profit may as well be Enron. In the end, that’s exactly what the IPA became.”

For her part, Jen Angel is careful not to lay the blame for the closure of Clamor entirely at the feet of the IPA. The distribution debacle “was an influence but it wasn’t the whole problem. It definitely had an impact, though it’s hard to estimate what the impact was.”

Angel argues that the money IPA owed Clamor was only part of what eventually helped drag Clamor under; the bigger problem was that the uncertainty caused by being owed money kept Clamor from developing an appropriate strategy to secure its future.

This lack of information from the IPA was the key blow, agrees Smith. “If Kitchen Sink or Clamor had known for sure when their money would arrive, they might have been able to plan and keep on publishing.”

Even as the financial difficulties persisted, Angel said “[Clamor co-founder] Jason Kuscma and I both started to get burned out. I mean, there were periods were he worked on the magazine 16 hours a day.” So in early 2006 the two co-founders began to take steps that they hoped would save both the magazine and their dwindling financial sanity. They separated out their business from their editorial teams, “which worked really well for about six months.” They moved from a bi-monthly to quarterly publication cycle. They merged with Altar magazine, bringing on board Altar editor Mandy Van Deven and activist / artist Nomy Lamm, and even began preparations to transfer legal ownership of the magazine to their new associate publishers. But it was too little, too late. The deal to sell to Van Deven and Lamm fell though and, as Angel notes bluntly, “we just didn’t have funds to continue operating.”

The end for Clamor, when it finally came, struck with remarkable speed. In November 2006, Angel and Clamor co-founder Jason Kuscma confirmed to their readers and subscribers via e-mail that “the rumors
were true.” The magazine would cease publication, effective immediately. The editors, media-makers to the last, noted that the end came with the 39th issue “in the final stages of layout, but thousands of dollars
away from the printer.”

“Richard Landry definitely made poor choices,” Angel concludes “and the worst thing he did was that when the distribution arm started to tank he wasn’t honest with the members.”

The story, however, fails to end there. In the latest ironic fallout stemming from Clamor’s collapse, the seizure of the Clamor Infoshop’s assets by one of Clamor’s creditors, Sky Bank, has, in turn, left half a dozen even smaller lefty projects in the financial lurch – including $pread Magazine, Justseeds, Left Turn, and others. The seizure of the Infoshop “immediately shut down Justseeds’s online store,” wrote founder Josh MacPhee in a panicked financial appeal posted online on Dec. 20, 2006. “This was a complete shock, as … no one [at Clamor] had mentioned the possibility of collapse or bankruptcy. On top of shutting down distribution, their fulfillment house owed Justseeds upwards of $10,000.”

“Because everything in the Infoshop store operates on consignment,” sighs Angel, “it was normal procedure to owe people money. We were also behind on payments by one or two months because we were fighting to save the magazine. That’s not good, we know that, but it’s not as if we were defrauding anyone. Look, I personally don’t have their money. If I did, I would write them all a check.”

Meanwhile, Angel expects one of her final acts as Clamor co-founder and publisher will be to file for personal bankruptcy. “This wasn’t how I saw all this ending when we started,” Angel admits.

LOOKING AHEAD

For many publishers struggling to survive in the aftermath of the IPA meltdown, even the best possible future looks grim. The threat of multiple lawsuits hangs in the air, and the void created by the loss of several magazines is already being felt. “One of the most troubling things,” says Moore of Punk Planet, “is the sheer number of incredibly well-written articles we’re getting. What we’re getting is double the number we normally would, which means that we’re getting the runoff from all the magazines that have just folded. It’s great for Punk Planet – maybe. But it’s terrible for our community.”

“The positive thing about the IPA story is that, when it was working, it helped an enormous number of magazines, including Clamor,” Jeremy Smith concludes. “A lot of them would have died much sooner without the IPA. The end of the IPA won’t stop the independent press – people will come up with solutions to problems that they’re facing. I just hope they don’t have to deal with the same problems all over again ten years down the road.”