Eric Ellenbogen, the president of Golden Books Family Entertainment, announced Tuesday that he’s leaving the beleaguered children’s publisher to join Marvel Enterprises as president and CEO.
Marvel began its current incarnation on Oct. 1 with the emergence of the old Marvel Entertainment Group from bankruptcy and its merger with Toy Biz.
Golden Books, by comparison, barely staved off bankruptcy last month by negotiating a “standstill agreement” with bondholders after missing an interest payment Sept. 15 on $110 million in debt.
Richard E. Snyder, Golden Books’ chairman and CEO, justified the lack of a replacement for Ellenbogen in a statement Tuesday that pinned “success in 1999” on “a company structure with fewer layers, less complexity and reduced overheads.”
The former Simon & Schuster chief, who took over Golden Books in 1996 in partnership with entertainment force Barry Diller and investment firm Warburg, Pincus Ventures, also expressed an interest in returning to the company’s roots as the leading publisher of children’s books.
“It is imperative that we streamline our organization and lay a solid foundation of profitability in the children’s book business,” Snyder said.
The comments would seem to mark a reversal for Golden Books, which championed “the full integration of its publishing and entertainment businesses” on announcing Ellenbogen’s promotion just last June from head of its entertainment division to president of the entire company.
“We have completed our transition from a classical publisher to a family entertainment company,” Snyder said at the time.
The company has since endured wrenching setbacks, however, including a ratings reduction, liquidity crisis, cratering in its stock price and churning among top management.
Such adversities not only motivated high-profile directors to step down from Golden Books’ board but prompted the company itself to retain investment bank Allen & Co. to consider survival options.
Golden Book chief administrative officer Philip Galanes reported Tuesday that, while there was no update on the Allen & Co.’s search for buyers or partners, the publisher should have news as early as next week on new financing from CIT Group, the standstill agreement with bondholders, and the conversion of debt held by Warburg from secured to unsecured.
In his new job, Ellenbogen will oversee a New York-based company that currently comprises the assets of the old Marvel, including such characters as Spiderman, X-Men and Men in Black, plus toy-company Toy Biz, trading-card maker Fleer/Skybox and sticker producer Panini.
”This is a new beginning for Marvel, and I am thrilled to be on this superhero team,” said Ellenbogen, who cut his teeth helping to build Broadway Video, along with its founder Lorne Michaels, into New York’s leading independent television production and distribution company.
As it happened, Ellenbogen, 41, was asked to sit on the board assembled by a post-bankrupt Marvel on October 15. It was understood then that Marvel CEO Joseph Ahearn would step down on completion of a Spencer Stuart-conducted search for a successor.
Mort Handel, the non-executive chairman of Marvel’s board, referred to that “extensive search” Tuesday, seemingly pleased to have “found the perfect person on our own board.”
Golden Books shares fell 12.5% Tuesday to close at 44 cents a share, while Marvel gained 1% to close at $5.94.