AAS AND S&T
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John Pazmino
NYSkies Astronomy Inc
nyskies@nyskies.org
www.nyskies.org
2019 October 20
introduction
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In March 2019 F+W Media, holding company of Sky & Telescope
magazine,, went into bankruptcy and prepared to sell off its
properties. It staged an auction in late May for outside bidders may
compete for the properties, including s&T.
At Northeast Astronomy Forum in mid April S&T advised that as at
that time there was no apparent entity to bid for the magazine at this
auction. It knew of firms trying for F+W's other magazines.
In mid June both American Astronomical Society and Sky &
Telescope issued letters announcing that the Society acquired the
magazine to run as an other of its publications.
The two orgs's letter circulated thryout the astronomy world,
bringing relief, salvation, joy. As at the October issue there were no
substantial changes in layout, style, content, services.
On October 10th AAS Executive Officer kevin Marvel put out an
essay on how AAS and S&T pulled off the capture of the magazine from
the auction. This essay is still virtually unknown in astronomy while
the original two letters were almost instantly beamed around the
world. it'll percolate out eventually, maybe taking a couple months,
because it was carried by a nonastronomy research newsletter. I
learned of it from a NYSSkies reader who follows this newsletter for
other academic work.
I present here all three pieces as a combined set for the greater
dissemination into the astronomy world.
= = = = =
AAS to Acquire Sky & Telescope
Tuesday, June 18, 2019 - 17:10
This post is adapted from a press release issued jointly by the
AAS and S&T: The American Astronomical Society has agreed to
acquire Sky & Telescope (S&T) magazine and its related business
assets, including the skyandtelescope.com website, SkyWatch annual,
digital editions, astronomy-themed tours, and S&T-branded books, sky
atlases, globes, apps, and other stargazing products.
S&T's current owner, the magazine- and book-publishing company F+W
Media, sought Chapter 11 bankruptcy protection in March 2019 after
what court filings described as six years of poor strategy and
management at the corporate level. The AAS was the winning bidder for
S&T in a bankruptcy auction process that concluded on Monday, 17 June,
pending approval by all parties to the transaction, final
documentation, filing of final sales agreements and schedules with the
bankruptcy court, and a successful closing process.
The AAS anticipates that S&T's staff of editors, designers,
illustrators, and advertising sales representatives will become AAS
employees but will continue to work out of the magazine's offices in
Cambridge, Massachusetts. As it accomplishes the operational
transitions needed to publish S&T, the Society anticipates making few
if any changes to the editorial content or the way the magazine
operates, and subscribers should see no interruption in its monthly
delivery schedule. Enhancements and new products and services are
likely in the future; these will be developed in partnership with the
magazine's editors and readers and with the Society's members and
other stakeholders.
"The synergies between our two organizations are many and strong,"
says Peter Tyson, Editor in Chief of Sky & Telescope. "Many AAS
members grew up on S&T, and we regularly report on the discoveries
made by AAS members."
Sky & Telescope was founded in 1941 through the merger of two
earlier magazines: The Sky, produced at New York's Hayden Planetarium,
and The Telescope, published first at Ohio's Perkins Observatory then
later at Harvard College Observatory. The business was employee-owned
until 2006, when the staff sold it to the craft-and-hobby publisher
New Track Media, which in turn sold it to F+W in 2014.
Before he became AAS Press Officer in 2009, astronomer Rick
Fienberg worked at S&T for 22 years, serving from 2001 to 2008 as
Editor in Chief. Upon learning of F+W's financial difficulties, he
suggested that the magazine could be a good fit for the AAS, which
publishes two of the leading peer-reviewed journals in the field — the
Astronomical Journal (AJ) and the Astrophysical Journal (ApJ) and
which recently created an Amateur Affiliate category of membership for
backyard astronomers, many of whom collaborate on scientific research
with their professional counterparts. AAS Executive Officer Kevin
Marvel agreed and wrote a detailed proposal to the Board of Trustees,
who unanimously endorsed the idea of trying to acquire S&T's business
assets, not only because of S&T's close strategic alignment with the
Society's own goals, but also because it would enhance the AAS's
ability to connect with amateur astronomers and the general public.
"The AAS Board was totally onboard with the acquisition of Sky &
Telescope," quips AAS President Megan Donahue (Michigan State
University). "Many of us are current and loyal subscribers, and more
than a few started reading S&T when they were young and noted that the
wonderful articles and beautiful graphics helped inspire them to
choose a career in the astronomical sciences. The AAS and S&T
together will be greater than the sum of the parts."
"I decided to become an astronomer while voraciously reading back
issues of Sky & Telescope during study hall in 10th grade," recalls
Marvel. "I'm thrilled with the Society's acquisition of S&T and look
forward to integrating the business fully into our operations, which
will allow us to expand our efforts to fulfill our mission to enhance
and share humanity's scientific understanding of the universe."
"We couldn't be happier that we'll now be producing Sky &
Telescope and our other products under the auspices of the American
Astronomical Society," Tyson says. "We look forward to working with
the AAS on our shared goals: supporting astronomers of all stripes,
getting the word out about astronomical discoveries, enhancing pro-am
collaborations, and mentoring the next generation of astronomers. It
feels like S&T is finally landing where it belongs."
From the Executive Office
Richard Tresch Fienberg
AAS Press Officer
= = = = =
From the Executive Office
Tuesday, June 18, 2019 - 21:16
The AAS and S&T: It's Hard to Imagine a Better Partnership
I was 11 years old and living in Fort Worth, Texas, when my mother
bought me a 2.4-inch refractor as a Christmas gift. I was planning to
be a marine biologist until I unwrapped the telescope and set it up in
our backyard on a warmish December evening. The Sun had just set, the
first-quarter Moon shone overhead, and Venus glimmered high above the
southwest horizon. I focused my new telescope on the planet, glanced
up at the Moon displaying the same phase — and heard, or felt, the
same sound you hear at the movies when the big spaceships come out of
hyperdrive: a low bass hum followed by a metallic clang. I could
envision the solar system in my head based on my own observations of
the night sky! So long, Jacques Cousteau; hello, Edwin Hubble!
Astronomy was for me!
I figure most folks can't point to a particular moment when their
lifelong career is picked, but I can point to that evening in Fort
Worth as the Sun set and the sky darkened as the exact moment when I
chose my life's path.
Aside from what I'd picked up reading some science fiction and
science fact, I didn't have much knowledge about astronomy, and I
turned to the magazine rack at our local bookstore to fill in my gaps.
That spring, our family moved to St. Louis, Missouri, and my interest
in all things astronomical extended to a desperate request to my
biology teacher to let me read Sky & Telescope magazine during study
hall (instead of doing homework or reading or, as most kids did,
sleeping or goofing off). A special pass allowed me to visit the
science annex and access their archival collection of S&T. I started
with recent issues and read deep into the archive, going back at least
into the 1950s, maybe earlier.
The excitement of discovery, the scale of the universe, and the
fact that reason could reveal truth about the cosmos all resonated
strongly with me. S&T even led me to college at the University of
Arizona. That institution seemed to feature prominently in all of the
1970s and 1980s issues, and as my father and grandfather had graduated
law school there, it seemed a natural choice. I didn't even bother to
apply elsewhere. For me, astronomy meant S&T, and a career in
astronomy meant the UofA. I had my roadmap — now I just had to get
enough math skills to make it happen (that's a different story).
Last fall our press officer, Rick Fienberg, former Editor in Chief
of Sky & Telescope, alerted me to the possibility that S&T might be
available for acquisition due to financial challenges faced by its
parent company, F+W Media. I took this opportunity seriously and
reached out to some experts in commercial publishing to ask what kind
of multiples S&T might sell for. "Multiples" refer to multipliers of
various revenues that businesses generate that are used to indicate a
possible sale price. Some businesses use a multiple of gross revenue,
some use a multiple of net revenue, and others use a multiple of
EBITDA (earnings before interest, taxes, depreciation, and
amortization). No matter which multiple I looked at, the acquisition
of S&T seemed beyond our reach.
Then, this past March, F+W Media declared bankruptcy and put all
of their assets up for auction. As Sir Edward Conan Doyle quipped,
"the game was afoot." I approached our Board of Trustees with the
facts of the situation and a request to retain some M&A (mergers and
acquisitions) experts and our legal counsel to help us explore the
possibility of acquiring S&T through the bankruptcy auction.
After submitting a nonbinding preliminary bid, we were allowed to
participate in the auction itself, which opened up a 1½-month-long
"due diligence" process. During this phase detailed financial
information is provided to possible bidders under a nondisclosure
agreement. We and our advisors, including our legal team at Steptoe &
Johnson and the principals at Clarke & Esposito, a firm concentrating
on strategic consulting services related to professional and academic
publishing, dug into the spreadsheets, PDF files, and Word documents.
We modeled cash flow. We explored the data on readership and product
sales. We went over the numbers again and again and again.
Kelly Clark, our Chief Financial & Operating Officer, and I left
the 234th AAS meeting in St. Louis early and on 12 June traveled to
Wilmington, Delaware, home of the busiest bankruptcy court in America,
in preparation for the next day's auction. As we were getting ready
for dinner with our advisors and legal counsel, I received a phone
call from the investment banker running the bankruptcy auction. After
numerous additional calls over the next few hours, we finally settled
on a price, and then we turned it over to the lawyers to finalize the
details. We showed up at the auction anyway to sign some forms, and I
valued an opportunity to speak with F+W's CEO.
So where are we now? The court has approved the sale, we have
contacted the major vendors who support production and distribution of
the magazine, and we are meeting with the 12 employees who make S&T
happen later this week to welcome them as AAS employees and to talk
about short-term and long-term issues we'll be facing together. The
synergy we gain in accomplishing our mission is substantial. We have a
newly established Amateur Affiliate membership class, we will seek to
expand our summer meeting to actively include amateur-focused content
and involvement, we will explore providing S&T subscriptions to our
members (both professionals and amateurs) at a discount, and we will
explore adding content to S&T where it makes sense and is in line with
Editor in Chief Peter Tyson's vision for the magazine.
Looking back at how I got into astronomy as a career and the
opportunities the AAS now enjoys through the acquisition of S&T, I
simply can't be happier. Thanks go predominantly to our Board of
Trustees, who unanimously supported the acquisition; to Kelly Clark,
who will bear the brunt of the effort to bring the magazine onboard as
a new group of employees and a new range of activities for the
Society; and of course to Rick Fienberg, who, after more than 20 years
at S&T and now 10 years at the AAS, brought this opportunity to us and
will be instrumental in helping us incorporate the magazine and its
related businesses into the Society's operations.
One thing I know for sure: to enhance and share humanity's
scientific understanding of the universe, the AAS has no better
resource than the staff and leadership of Sky & Telescope. Our future
is so bright, we're going to have to wear shades!
Kevin B. Marvel
Executive Officer
American Astronomical Society (AAS)
= = = = =
The Scholarly Kitchen
October10, 2019
GuestPost
Guest Post
How the American Astronomical Society Acquired Sky & Telescope Magazine
[Editor's Note: Today's post is by Kevin Marvel. Kevin has served as
the Executive Officer of the American Astronomical Society since 2006.
In this role, he is responsible for all aspects of Society operations,
including the publishing of the primary research journals in
Astronomy, the Astrophysical Journal and Astronomical Journal and
providing support for and guidance to the Board of Trustees of the
Society. Kevin is the author of numerous articles both scholarly and
general interest as well as two books. He regularly speaks to the
public about astronomy and will happily teach anyone to recognize the
bright constellations, while incessantly sharing with anyone who will
listen the latest discoveries in astronomy.]
It all started with a picnic in Cambridge. Over hamburgers and
potato salad, our Society's Press Officer was candidly informed that
the magazine he used to serve as Editor in Chief, Sky & Telescope, was
facing difficulties. Difficulties not with itself or the community it
served, but with the parent company, which owned many dozens of
similar enthusiast magazines. Among possible solutions floated was an
outright purchase of the venerable astronomy periodical by the
American Astronomical Society, a truly outside-the-box idea. The next
day he called me and that got the process started, but where we ended
up was far from what we envisioned during that initial call.
As the CEO of the American Astronomical Society (AAS), a
membership organization, I'm faced with all kinds of challenges, most
of which are near-term and always pull me away from long-term
strategic matters of significance. Setting aside the time and space to
think big is something all non-profit CEOs need to do, while actively
working toward the inclusion in all policy matters of their elected
leaders, who are the guiding force for any scholarly society. One big
issue our organization had been grappling with for years was how to
engage with the large population of amateur astronomers, who represent
the most interested members of the public in the scientific
advancement of astronomical knowledge. With limited resources and a
substantial range of events, businesses, and amateur organizations
already serving this community, it was challenging to find a foothold
that would allow us to fulfill our mission of enhancing and sharing
humanity's scientific understanding of the universe with the amateur
community. The limited resources were a paramount concern.
The American Astronomical Society has roughly 7,500 members of all
types, with just over 4,500 core members, representing active
researchers in our discipline along with about 1,500 students and a
range of affiliate and emeritus members. Even though we are the
largest professional society in the astronomical sciences,
representing roughly 25% of the active researchers worldwide, our size
is tiny compared to the amateur community, which is at least ten times
if not a hundred times larger in number. Aside from leveraging
Internet-based technologies to communicate more effectively with this
pool of enthusiasts, we have never quite found the`secret sauce' for
engaging with this large community, which has been an ongoing
frustration.
We had recently taken a positive step, by establishing a new
amateur membership category and engaging with the early adopters to
figure out what we could provide them as a community that they would
value. Right about that time the picnic happened. An opportunity was
knocking - that was clear to me and our Press Officer, but how could
we take advantage of it? We were open to the possibility, but the
cold, hard reality of finances would shut down our vision.at least for
the present.
Any reasonable business, delivering a positive bottom-line year-
on-year, as Sky & Telescope (S&T) was, would sell for a multiplier of
either the gross annual revenue or the net revenue, or the EBITDA
(Earnings Before Interest, Taxes, Depreciations, and Amortization, a
near proxy for cash flow), or something. When I started working out
the possible sales price of the operation based on some assumptions
and some old financial reports, the potential price quickly grew to an
amount larger than our financial reserves. I couldn't see a way to
deliver a proposal to my Board that would pass muster. S&T was out of
our reach. I let my Press Officer know we were out of the running and
we put our aspirations on hold.
A few months later, we found out that the parent company for S&T
had declared bankruptcy and all of their magazines would be sold at
auction. An unexpected opportunity had surfaced! I had to act quickly
given the timescale of the auction (just a few months from initial
bankruptcy filing) to bring our volunteer leaders on board. This was a
risky, but obviously mission-enhancing opportunity, to acquire a for-
profit business focused on serving the advanced amateur astronomy
community and very much in line with our organization's mission.
As nothing would be possible without the strong support of our
governing Board, I first focused on building a strong consensus with
our elected leadership. After receiving the initial umbrella
documentation describing all the businesses for sale at auction, I
developed a presentation for the Board at their spring face-to-face
meeting. I entitled it "On Our Mission and Opportunity". I placed many
recent accomplishments in the context of our overarching mission. I
enumerated gaps in our mission that we would like to fill if we could,
such as figuring out a way to communicate new research results with
the broader public, engaging with amateurs, reaching out to students
with real science results, and finding a way to draw more people to
our conferences. I made the case that acquiring a vehicle that helped
us accomplish these objectives would be easier than trying to build
something to accomplish any single one of them. Then I made the pitch:
we should try and acquire Sky & Telescope magazine and its associated
businesses at the bankruptcy auction.
Even though I had not yet walked them through the financial
feasibility of doing so, I was met with many positive nods and even
outright smiles (and one `All right!') among our elected leaders. They
were ready to have a go. Even when I told them it would likely require
more than a million dollars, carried some risk and that we had to act
more quickly and decisively than we ever had as an organization. They
were on board and we were off on a multi-month adventure.
Acquiring a for-profit business and converting it to a non-profit
operation seemed unique when we began our journey, but I found other
organizations that had done something similar, though none had done so
through a bankruptcy acquisition. Conversations with those involved
quickly showed me I needed expert help, both from a legal and a
business standpoint. We have had a very long and productive
relationship with our legal counsel, and they were more than happy to
help us with this effort, while I hunted around for the right
consultant to provide the business and acquisition support we needed.
Ultimately we decided to work with Clarke & Esposito. (Full
disclosure: Joe Esposito and Michael Clarke are both regular
contributors to The Scholarly Kitchen)
The bankruptcy process required the initial submission of a non-
binding bid followed by a month of due diligence and a final binding
bid. Six weeks total were allowed from start to finish. The initial
bids could be used to exclude low-ball bidders from the process, so we
needed to succeed at each stage of the process. The auction, if
needed, would take place after the bid deadline.
Consultations on strategy, process, and due diligence began in
earnest as we prepared our initial bid. We were given access to a
substantial `data room' filled with directories of hundreds of files
providing detailed information on the businesses up for auction. We
began combing through them, identified missing key information and
requested additional details. Some we received, some we did not. Some
of the information proved correct, some proved lacking in detail or
ended up being incorrect. (A discussion of proper due diligence for an
acquisition deserves its own report. Information on this topic can be
found online, through consultants, and in business literature about
how to proceed.)
We submitted our initial bid, which was accepted for the first
round. We based our bid amount on our assessment of the distressed
cost of the business tempered by our desire to be a lead competitor,
while not utilizing a substantial fraction of our reserves. Once we
were accepted as bidders, we began a deep dive into the financial and
other data made available in an effort to truly determine how viable
the business was and, therefore, what our final binding bid would be.
Our main focus was the development of a detailed Asset Purchase
Agreement, outlining just what we were buying. This along with other
requirements formed the basis of our final binding bid.
During the process of generating our final bid package, we had
some surprises. First, although initial documents indicated that the
popular book publishing business connected to the magazine would
transfer in the auction, we were informed that the most popular books
would be bundled up with other books and sold in a separate sale. I
vigorously protested, making the point that the books business was an
integral part of the outreach of the magazine to its community.
Engaged amateurs needed not only a monthly update on the sky above,
new research results and the latest and greatest in equipment, but the
supportive knowledge of the detailed atlases produced by the editors
of the magazine and published in various formats. Although finding the
Andromeda galaxy with binoculars was easy enough for amateurs, finding
NGC 7662, the`little blue snowball', a gorgeous planetary nebula,
required an atlas focused on the engaged night sky observer even for
me, a professional astronomer. They were trying to sell an iPod witho
ut iTunes.it simply wouldn't work for us. Stating our bid would be far
lower if the books did not come with the magazine resulted in a
reversal of the seller's decision.
Second, it became clear that we were likely the only bidder
interested in S&T alone, but other bidders might be interested in a
suite of magazines including S&T. Given our limited resources, it
would be harder for us to bid against somebody bidding on multiple
magazines. This impacted our bidding strategy and our final bid
amount. Had the auction not allowed for bids for multiple lines of the
business, we would have likely bid lower than we did.
Third, although we worked to the established deadlines, other
bidders had difficulty meeting them and the final bid deadline was
pushed back an additional two weeks, which allowed us more time for
research and due diligence, but also allowed us to question our bid
strategy. Ultimately, this additional time led to us submitting a
lower bid than we would have otherwise, which was an advantage in the
end.
Finally, we found out that significant financial obligations to
past contributors to the magazine and to vendors that enabled the
publication of the magazine had not been made for some length of time
before the bankruptcy filing. Since many of the past contributors were
obviously important contributors for the future and important to the
ongoing success of the magazine, we would have to make some of them
whole in some way, shape or form, while the fresh re-set of the
bankruptcy proceedings would technically free the business from all
past obligations. If we won, we'd have some tough decisions to make.
Our CFO and I traveled to the bankruptcy court in Wilmington, DE
with our advisors, fully expecting to participate in the auction
itself. Phone negotiations the night before allowed us to reach a deal
without the risk of losing the business at auction to a larger bidder,
but well below our maximum purchase price. Although we were
disappointed at some level in not being able to participate in the
auction process, we were thrilled to walk away as the owners of a
cash-positive business that aligned so centrally with our mission. We
now had a lot of work in front of us.
The next month was a rush of activity. We settled the Transition
Services Agreement, outlining what services and at what cost would be
provided by the previous owners during a limited transition period. We
flew to the editorial offices of the magazine to welcome our new
employees, provide them some background on our organization and how we
operated, and assure them we were focused only on a smooth transition
to operations under the Society for the time being, not radical
change. This was an important early step and one I'm glad we took.
We made contact with the numerous vendors that help make the
publication of the magazine possible and struck new contracts. They
were all very supportive and willing to work with us to continue to
ensure the magazine's success. We made the strategic decision to make
the freelance contributors who had been short-changed whole, which
bought a ton of goodwill and will continue to pay off in the longer
term in many ways. We uncovered challenges with the web store
associated with the magazine that required closing it for a period of
time, disrupting both sales to consumers and to businesses, but we
managed to keep that closure period short. The magazine has continued
publishing, smoothly, even while all the business arrangements were
restructured, mailing certificates transferred and short-term issues
were resolved.
I found it important during the process to keep our Board fully
informed of what was happening and sent regular communications with
them detailing what we were doing and why, the challenges we faced and
the implications for us in the longer-term. If I erred, I erred on the
side of providing greater detail. This proved to be very important as
the excitement of the process led some of our leaders to want to get
involved in the nuts and bolts of the process or the magazine early in
the transition process, which would have been potentially disruptive.
Keeping them fully informed combined with providing a timeline for
when their advice and input would be needed provided a channel for
their enthusiasm without taking our focus off of critical transition
issues. The worst time to think about long-term strategy is in the
middle of trying to transition a monthly publication to new ownership.
Far better to get the operation successfully up and running and then
think about strategic changes or enhancements.
Although we are in the early days of bringing on board this new
strategic asset, which is tightly aligned with our mission, I view it
as a tremendous success for our organization. We managed to make
tremendously significant strategic decisions in a short time period
(for a non-profit). We managed to efficiently use external advisors to
help us where we had gaps in expertise, while retaining critical
analysis and decision making for our staff and leadership
respectively. We bought something we likely could not have built
ourselves, at least not for the price we paid, and we have
significantly impacted our ability to deliver on our mission in the
long-term.
You never know when opportunity will knock. Non-profits have
historically had a hard time capitalizing on short-term opportunities.
We happened to be ready as an organization to capitalize on a
situation we could not have anticipated, which enabled us to
accomplish a goal we could not afford otherwise. Time will tell if we
can achieve all the things we think this acquisition enables, but we
are on a positive path for now and I'm certain we will be successful.
Having been drawn to being an astronomer by reading Sky &
Telescope as a 10th grader, it has been a thrill to bring this
venerable magazine under AAS ownership. Our members and the readers of
the magazine have shared their strong enthusiasm for our actions and
we now have the challenge of delivering on those expectations. That's
a new set of challenges the AAS fully embraces and something I am sure
we can deliver on as we continue to strive to enhance and share
humanity's scientific understanding of the universe.
= = = = =