Re: Let's hold up a bit here 11

[krandall@world.std.com]

At 10:06 PM 9/23/99 -0700, Erik Olson wrote:
>[got grabbed to go walking.. time lapse]

Sounds like a better use of one's time in any case!<g>

> This is one of the reasons the board is
>talking about replacing Herlong.

When I spoke with Dave last night, he told me that he had been in contact
with another publisher (Charlene Nash's SO) who was very interested in
working with him (or us) on PAM.  I also gave him the name of a third
private publisher to check out.  Maybe the way to resolve this part of the
issue is to ask him to come back to us with several bids.  I suspect Dave
H. will come in way low in comparison, but even if we decided to go with
Dave H., it would give us an idea of what the costs would jump to if we
_did_ change.  We might decide that for safety's sake it makes sense to go
with someone we trust more, even if the initial costs are higher.

>I *do* think that if
>we accept the PAM proposal, the AGA will in effect cease to become a
>magazine at all (unless a majority of work on PAM comes from the AGA
>directly); we'll just be including it as a perk, like a free book once a
>year.  Perhaps this is not a bad thing (after all, it frees the rest of us
>up to work on these new projects instead of TAG), but it's certainly
>something to consider.

If we are no more than a magazine now, will our members even percieve a
difference in the "perk" of the magazine other than the fact that it is now
in color and has a different name?

>Not related to the questions currently on the floor, but another thing
>I've been grumbling over... please bear with me... I think the whole
>stock/payment issue is still very fuzzy.  If I follow the logic, Dave is
>being paid $20 per hour "by PAM" to edit PAM, I could see this easily
>costing several thousand dollars per issue for his work alone, right?  

I think several thousand dollars would be pretty high for a magazine of
this size, but I agree with your premise.

>He's getting around the cash flow problem by accepting payment as new
>stock instead of real money (thus diluting anyone else's stock). But if
>the AGA wants to maintain any sort of control by way of stock, the only
>option is for the AGA to pay for Dave's hours with real money, yes?  So if
>this were the case, *we'd* be taking the risk, instead of Dave; he'd be

When I talked to him last night he agreed that the whole way stock will
work is still fuzzy, and will need to be worked out in detail.  But he also
said, and I agree with him, that first we need to decide whether we're even
interested with the main idea before we hammer out the details to
everyone's satisfaction.

>guaranteed a salary.  Are all the other people who help edit PAM going to
>be paid $20 per hour?

Good question.  We should probably be including Dave in these discussions
again.  He suggested that we put together a list of questions similar to
the one Bob did for him to answer.  Then when we come up with new question,
or need clarification, go to round two of questions.  

>It sounds to me like one course of action here would be for the AGA to own
>NO stock in the venture, let Dave keep his 100% majority and profit.  
>He's already got the clauses that make it very difficult to separate him
>from PAM (eg. the "one year" thing).  On the other hand, the fact that he
>gets a built-in subscriber base to begin with must carry some value (is
>that equal to the 4 pages in every issue reserved for the AGA?  Maybe
>so.).

His original idea was to do it without AGA having to invest any up front
money.  The idea of  AGA being majority stockholders came about when people
were afraid of losing "control" of the magazine.  At that point, he
suggested that if AGA were majority stockholders, they would, in essence,
remain in control.  He is perfectly happy with it either way.  

>Whew. Someone help me here. It sounds like we would need an attorney to
>close the deal.

I definitely think it makes sense for an attorney to review the deal if and
when we get to the point where we have decided we want to do this.

Karen