Over the last few months, Source Interlink has let go several hundreds
of employees as part of a merger of its magazine distribution operations and its Alliance Entertainment division into one business. The divisions merged under the leadership of Alan Tuchman, president of Source Interlink Distribution and former president of Alliance.
The restructuring was intended to achieve cost savings to help service the $1.2 billion in debt the parent company carries. The process has already seen the shuttering of five company warehouses, leaving the company with five distribution facilities. The sales staff for the various product lines have also been integrated under Frank Bishop, who comes from the magazine side of the business. Mike Donahue, Alliance senior VP of sales, reports into Bishop.
Buying for the CD/DVD side and the magazine operation, however, remains separate.
Also, as part of the move, the indie distribution operation, Innovative
Distribution Network, has been significantly downsized with its senior
management being let go in two waves. First to go were IDN GFM Lou DiBiase and VP Jim Freeman, both based in New York; and then Alliance VP of sales Dean Tabaac, who oversaw the division, leaving this week. In total, about a dozen IDN staffers have been cut. Indie labels distributed by IDN have the choice to leave, but if they stay, they will have less coverage in the field than previously, sources say.
The downsizing at Source Interlink is consistent with moves at other music and video wholesalers. In the last month, sources say Baker & Taylor—the book, music and video wholesaler based in Charlotte, N.C.—let go about 80 people. Meanwhile, Koch Entertainment Distribution, an indie distributor based in Port Washington, N.Y., shed about 10 people.
Alliance, Baker & Taylor and Koch executives were unavailable to comment. Source Interlink, which has steadily traded down since its July 1 share price of $2.15, closed at 15 cents on Dec. 9.