I devoted the final half of 1995 to the negotiation of the sale of my company to Macmillan Computer Publishing (MCP).
This emerged as one of the principal mind-bending experiences of my life. What motivated me so much to make this sale? David Israel: the Macmillan VP of Publishing and eventually President of MCP who engineered the deal. David related to me that Macmillan wanted to position Waite Group as an internal corporate “think tank” for innovative book concepts. He believed that we had built the most creative publishing program in the industry. Accordingly, MCP wanted to ensure that the sum body of such superior ideas should be wrapped in gold foil and conveyed directly to their own firm’s doorstep. In short, they wanted to engage me in a long-term employment contract.
Even though I was about to turn 50 years old, they all appealed to the “boy wonder” in me, the part that did things for fun rather than for money. The aggressive hawking of think tanks, big research budgets, and lab visits made my imagination spin. What could it signify if not the authentic confirmation that I was now indisputably valued for what I did best?
I remember communicating to Nick Unkovic, my negotiating attorney, how happy the offer had made me. But my counsel, speaking to me in a cautious tone, said: “Mitch, you can’t count on any of the talk about ‘think tanks’ and ‘super idea mills.’ MCP is in the business of making money. This purchase of your company may not be with the intent to capture your best ideas. Rather, they may want to capture the shelf space you have denied them over the last six years.”
I protested his viewpoint, but Nick looked at me as if I was still learning to tie my shoes.
Negotiations dragged on, and I became more convinced that MCP wanted me for my talent rather than recoup shelf space. As the deal closed, however, I witnessed bargaining moves that Simon and Schuster (the parent company at the time of MCP) put into play, which worried me. A nebulous fog was wafting inland from just over the horizon. When we received our carefully worded contract, we noted that changes had been made without a redline. In other words, the new changes had been merged into the document clandestinely. Here Nick pointed out, was cause for true paranoia. To assess the full extent of the changes, we would have been reduced to evaluating the contract word-by-word to compare it with the previous version. Would we find that the changes were in our favor? What do you think?
So, picture this. Eight suits sit at a long table on the 30th floor of the Graham and James law firm office, overlooking a gorgeous San Francisco Bay. Nick and I are at the end of the table reviewing the contract.
Nick stands up and announces that the deal is off!
I was as shocked as the attorneys and big wigs whose jaws were all hanging open. Nick rose to leave the room, and I followed. At this point, the main negotiator asks what the problem is. Nick says, “Your contract is unacceptable; you did not redline your changes, and I won’t spend the rest of the day figuring out what you removed or added.” The S&S group quickly huddled, then claimed they did not know how that happened and would immediately fix it.
The “deal” went through.
I always wondered why Prentice-Hall, representing Simon & Schuster, seemed to get combative as our deal drew to a close. Charlie Drucker explained, “while Waite Group was working on expensive high-end Signature Series programming books and Interactive Guides with cool online features, the book industry shifted to a lower-cost model, which needed to improve margins, fewer pages at a lower price. We were just not that kind of company.”