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Lee County magazine distribution firm to cease operations

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  • | 3:52 p.m. June 2, 2014
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BONITA SPRINGS — Magazine distribution firm Source Interlink, which emerged from bankruptcy five years ago, will now completely shut down due to a terms dispute with Time Inc., one of its largest clients.

Source Interlink has 6,000 employees nationwide and 240 employees in Lee County. The firm supplies 45,000 retail outlets nationwide, including Walmart, with a host of magazines. That list included Time and many other industry-leading titles. But Time, in public filings last week, announced it had terminated a distribution agreement with a major vendor, one it paid $67 million to for services in 2013. The public filings didn't name Source Interlink, but several national and industry publications, including the Wall Street Journal, the New York Post and MediaDailyNews, confirmed the vendor.

Source Interlink CEO Michael Sullivan, in a May 29 statement, also alludes to Time without specifically naming the publication. “Source Interlink Distribution 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,” Sullivan writes. “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 will be discontinuing all operations in the near future.”

Source Interlink and Time have battled before over wholesale distribution terms, according to a report in MediaDailyNews. Back then, in 2009, Time and several other publishers threatened to pull business from Source after the distributor raised the price on a per-copy basis. Source then filed an anti-trust lawsuit against the publishers that was settled out of court. Source Interlink filed for bankruptcy that same year, and reorganized in a month.

In a separate move, a Source Interlink sister unit, Los Angeles-based Source Interlink Media, a niche magazine publisher of more than 60 titles including Motor Trend and Automobile, has rebranded and folded 12 titles. The new entity is named TEN: The Enthusiast Network. The majority owner of TEN is New York-based hedge fund Golden Tree Asset Management, which is also the majority shareholder of Source Interlink Distribution.


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