Greetings,
Cengage isn’t publish8ng. It’s on the bleeding edge of EdTech. Think of Cengage as Netflix for textbooks.
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There is no greater example of hubris and can-kicking than educational publishing. Well, the cliff is here. And its too late to turn back.
I'm with @6vsi+1l5FsNVB. I can't stop laughing. This business had so many opportunities to really change course. But it didn't. Management was unwilling to make the needed investments.
You reap what you sow.
I can't stop laughing.
I did an analysis of emerging OER non-profits and publishers 10 years ago and presented it to Cengage senior leadership. The main takeaway was that OER would start eating into market share within the next 5 years. It was met with scorn. Direct quote: "OER has been around for a long time. Why should we worry about it now?"
I left Cengage and the industry. A lot of the clowns who laughed at my analysis are also long gone. The head clown who laughed at me and ignored the threat still runs the company. One senior leader took it seriously. He is now a top executive at an OER startup.
@6ivf+1l5FsNVB. Great post. Spot on.
It's no coincidence that the CEO of UMASS online spent most of his career at Pearson. He knows what he is doing and is very smart.
I think your assessment is the only way out for Cengage, Pearson et al and it will involve massive bloodletting of people.
I can name former execs fabulously retired in places like South Florida, Southern California, Aspen, Palm Springs, Vegas, South Eastern Maine and many...many other very desirable places who bellied up to the student loan (many of which aren't being paid back) trough and fed like famished wolves.
That's the sad part about this whole story. The rich are long gone. It's now just a few overpaid mercenaries trying to wring the last bit of life out of an almost-dead carcass. They'll get the blood and then....POOF...they'll be gone, too, laughing all the way.
The whole ecosystem of education is rotten to the core.
Not sure if you’re aware mr. ruffner, there are free high quality platforms subsidized by federal govt and of course the equally egregious gates foundation among others. Their goal is to destroy publishers in the capacity that we have known them and they’ve been very effective. They scapegoat publishers as reason for high cost of education etc. It’s true the taxpayer subsidizes many students, and they should. After working in publishing as long as I did, I actually agree with many that these publishers are worthless and are guilty of avarice. I was embarrassed to be associated with a textbook publisher in the same fashion any pharmacy rep with common sense is also embarrassed for being associated with pharma, especially now. I enjoy watching the decline of these houses, the mismanaged decline. Only sub par actors will be drawn to this industry so we’re going to have all the fun in witnessing the acceleration. Anyone in sales in publishing is nothing but a data entry clerk forced to manage this decline. As long as we have internet, publishing will continue to collapse, it will never bounce back.
Greetings,
Many schools are still using Cengage and Pearson products. Most of these classes involve online assessments and the main thing driving these adoptions is customizability being handled in-house at the publishe... er, EdTech facilitator.
Cengage's competition is no longer Pearson or McGraw Hill. Moving forward the large non-profits funded by entities like The Bill and Melinda Gates Foundation are already making huge inroads with their free products.
Right now full customization and integration into a school's LMS can be somewhat troublesome for the technology-hating professors, but more and more schools are hiring integration specialists to handle these issues because it's more affordable than purchasing from Cengage and it makes the students happy.
All of the U-Mass colleges are doing this, as are some private institutions and it will most likely expand. While it's true the content from the NPs (Open Stax, etc...) mildly push a woke agenda they do so no more than Cengage does.
Cengage's greatest asset, aside from its leadership team, is its content and strategic partnership with National Geographic. Leadership should go through another bankruptcy and look to leverage its content into some sort of AI platform or as packages leased to an open-source project.
As a small company with a limited sales and marketing staff and a small engineering team that relies heavily on expertise from India, the company could become profitable. I would expect this type of company to have no more than 150 employees if that.
@5xxp+1l5FsNVB That's pretty rich to be complaining about a federally subsidized competitor. Do you think Cengage, Pearson or McGraw would sell any textbooks were it not for federally subsidized student loans?
To answer your question about sales. You can’t sell in an environment where similar competition is beating you by 40-50% for identical or similar products and services. Also, can’t survive with competitors heavily subsidized by the federal government who are offering similar products and services at no charge. The model is doomed.
I went to Boston square at the Weimar office last week to redeem my wheelbarrow of Cenmarks, I have acquired 13 million the last decade… I was able to redeem for quality Cengage Be Unstoppable mouse pad. Many thanks to dear leader.
Per usual, IPS nails it. Never assume the nonsensical metrics (digital revenue growth!) in the investor deck are telling the real story. The filings show a company with bad cold turning into a flu. Expenses went up year over year as did interest expenses despite the company paying off its long term debt. Interest rates aren't coming down anytime soon. Unless they can renegotiate this debt (unlikely in this interest environment) Cengage Bankruptcy: The Sequel could be right around the corner. Can't wait for the execs to tell us again about all the famous brands that went through bankruptcy (Sbarro! Who can forget Sbarro?) and that its a totally normal thing that most healthy companies undergo.
Greetings,
Looking at the quarterly filing I would imagine we'll see another bankruptcy in the next 12-24 months.
I posted several months ago about the dangerous terms contained in Cengage's debt. As I stated back then, the rate we're paying is directly tied to Prime or LIBOR +1%. The Biden Administration has been expected to push for rate hikes to try to get inflation under control.
Some debt's interest has ballooned to nearly 10%. The interest alone is burning through cash on hand almost as fast as it's coming in. The debt-to-income ratio is at 1.15 making the company a risky investment proposition and making funding harder to obtain (more expensive).
I'm sure there's a lot of money to be made through another bankruptcy, but as someone who survived the last one, it can be painful for the employees.
I know Cengage has vacated its swanky DC office, blocks from the White House. We're still paying for it even though it's no longer being used. One thing to keep an eye on is that several other leases are expiring next year. Cengage has, in the past, maneuvered out of leases to close offices. If I were in one of these locations I would keep an eye on things.
Full Stop!
How is it called “sales” when for 15 years numbers have gone backwards. Wouldn’t that be called “returns?”
sales org is hot garbage
Greetings,
While Cengage believes in full transparency we do ask that you use the propper terms when discussing the many unique and generous benefits we offer our workforce.
The Cenmark is the preferred currency within the organization. This trademarked internal currency is an important component to our brand image, as can be seen on Glassdoor, which has consistency rated Cengage as a top EdTech firm.
Yes! Instead of an Italian villa, you must redeem them for stay at local trailer park in beautiful central Illinois. Enjoy!
I’ve acquired ten million cengage bucks, ‘cenbux’ the last 8 years. Does anyone know where these can be redeemed and their actual cash value?
HED down of course. Overall looks like focus in other areas is helping though given the revenue growth for the whole business?
Greetings,
These types of numbers are a temporary situation as we re-allocate our resources to take advantage of the huge digital growth realized with Cengage Unlimited, which has been an unmitigated success.
The EdTech sector is owned completely by Cengage. Our closest "competitors" are still trying to figure out how to enter the sector that we invented. The decline in print has offset revenue, but re-alignment will tidy up the balance sheet.
We are entering a period of massive growth, much like Google. We must always remember our credo as we redefine what it means to be a learner. As a mission-based company, we look beyond the outdated concept of a balance sheet. We're transforming the world.
Back in the day, numbers like that would have been guaranteed firing for anyone in a sales management, product management or finance role. Now, it’s just “ho hum.” What a complete and utter embarrassment. Go back to your Italian villa.
Listen, this happens to every industry leader. If the world really knew how powerful and smart this company is, it would scare them. So we have to post these kind of numbers until they are ready for us.
Wow. US HED sales down 9% through first 3 qtrs.