William Jovanovich resigned yesterday from Harcourt Brace Jovanovich Inc., the publishing house he has led for decades. He leaves behind a company saddled with debt taken on while fighting a 1987 takeover attempt by Robert Maxwell.
"Forty-three years is enough, especially since I can now devote my time to editing books and writing them," Jovanovich, 70, said in a statement. He will become a consultant to the company's educational and trade divisions.
Former U.S. energy secretary John Herrington will replace Jovanovich as chairman, while HBJ President Peter Jovanovich will assume his father's position as chairman of the executive committee.
Although Jovanovich was successful in keeping the company one of the last remaining independent publishers, it borrowed nearly $3 billion in the process, debt that has left the company severely strapped for cash. As to whether the new team can keep HBJ both intact and solvent without relinquishing control, Herrington said that "all options are open, but bear in mind Peter and I are working for an independent publishing company."
Peter Jovanovich, meanwhile, sounded a bit less certain. "Neither John nor I are in a position to answer that question," he said. "Stay tuned."
One of the country's largest text-book publishers, HBJ is also a prestige general-interest house. It had major successes last year with fiction by Umberto Eco and Alice Walker, and has won the poetry Pulitzer for two years running.
Analysts were split on the importance of yesterday's moves. "A non-event," said J. Kendrick Noble Jr. of PaineWebber Inc. "Jovanovich relinquished the title of CEO to his son several months ago. In February, he was already devoting all his time to the school division."
However, Josephthal & Co. analyst Ivan Obolensky said, "This is a signal that something is going on. It's like a spy story. There's money moving, and you can smell it. The company is not going to go bankrupt, but it's going to be readjusted. I wouldn't even be surprised if Mr. Maxwell came out of the woodwork again."
The elder Jovanovich started with the company in 1947 as a textbook salesman and editor. When he became president in 1955, the firm had $8 million in sales; when he retired as CEO, it was $1.8 billion. Jovanovich was intimately associated with all aspects of the company, editing such authors as Diana Trilling and Mary McCarthy, adding his name to the firm and moving the headquarters from New York to Orlando, Fla. In an unusual arrangement, HBJ even published the chairman's fiction.
"If you didn't say 'Jovanovich' at the end of 'Harcourt Brace,' he would kill you," said Roger Straus, chairman of publisher Farrar Straus & Giroux.
"The strange thing about Bill," Straus added, "was he never owned more than half of 1 percent of the company. ... You've got to own a little bit more than that in the long run." Straus and his family own comfortably over 50 percent of FSG.
Last year, HBJ sold off its theme park subsidiary for $1.1 billion, a price that many analysts criticized as disappointing. Recently the firm had been negotiating to sell other assets.
Herrington, energy secretary during Reagan's second term, said yesterday that "there was nothing in those discussions that made sense for stockholders or the corporation, so we ended them."
William Jovanovich's most recent novel, "The Monkey Trail," was published by his firm in March. The New York Times said, "There is a lot of good stuff here." But the Wall Street Journal said of the author that "at least in his corporate guise he only wants $3 for his crummy stock; he wants $16.95 for his crummy novel. This is what they mean by trading above book value."
HBJ stock closed unchanged yesterday at $3.12 1/2.