Bookspan stake goes to Bertelsmann as CEO resigns

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German media giant Bertelsmann AG's direct division has purchased Time Inc.'s 50 percent stake in book club operator Bookspan, which was an equal partnership between the two companies. Bookspan CEO Markus Wilhelm reportedly will leave the company.

Bookspan owns and operates 40 book clubs in the United States, including the Doubleday Book Club, Literary Guild, Book-of-the-Month Club and special interest and lifestyle clubs. The newly combined entity will be the largest direct distributor of media products in the U.S., serving more than 20 million members. Terms of the deal were not disclosed.

"This investment underscores our belief that direct marketing is a distribution channel with great potential for future growth because it meets consumers' desires for selection, service and value," Ewald Walgenbach, CEO of DirectGroup Bertelsmann, said in a statement.

Bookspan will be integrated into BMG Columbia House Inc., New York, an operating unit of DirectGroup that markets music and DVDs direct to consumers in the U.S. and Canada through BMG Music Service and Columbia House DVD Club.

Mr. Wilhelm, who is also the chairman of the Direct Marketing Association, is resigning his post to cut down on travel and spend time with his family, according to reports.

Mr. Wilhelm's role at the DMA will not change. The DMA issued a statement regarding Mr. Wilhelm's status with the association.

"The board of directors elects people, not companies and Mr. Wilhelm will continue to lead DMA on the major issues facing the direct marketing community," it said. "This is not the first instance in which a DMA chairman has changed employment status and completed a board term."

DMA bylaws state that regardless of a chairman's change of job status - whether from a member to a nonmember company, retirement or otherwise - the officer's term lasts for one year and continues until the next annual meeting.

The next DMA annual meeting will take place during DMA 07, October 13 - 17 in Chicago. After his term as chair ends in October, Mr. Wilhelm will then serve as the immediate past chair and for the four years following, will serve as a past chair, according to the DMA.

Meanwhile, Stuart Goldfarb, president/CEO of BMG Columbia House, will lead the combined entity. BMG acquired Columbia House two years ago from private investment firm Blackstone Group in a deal reportedly worth $400 million.

BMG Columbia House expects to create new growth opportunities by combining Bookspan's various book club offerings with its music and DVD businesses.


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