Will the Proposed Merger of Penguin Random House and Simon & Schuster Happen? The Department of Justice Trial Has Begun...

As reported in Publishers Weekly and elsewhere, the trial to block or not block the merger of Penguin Random House with Simon and Schuster has begun. It's expected to last three weeks.

From the PW piece by Andrew Albanese,

“On November 25, 2020 Bertelsmann, the parent company of Penguin Random House, emerged as the winning bidder for Simon & Schuster from ViacomCBS for $2.175 billion. On November 2, 2021, the U.S. Department of Justice sued to block the acquisition.”

The Department of Justice's view is that “Penguin Random House’s proposed acquisition of Simon & Schuster would further entrench the largest publishing giant in the United States (and the world) and give the merged company control of nearly half of the market to acquire anticipated top-selling books from authors.”

Penguin Random House lawyers argue that “this acquisition will benefit readers, booksellers, and authors alike.”

The Authors Guild, in a position statement from November 2021, is against the merger, writing, “The proposed merger would enable the merged firm and the few competitors left to pay less and extract more from authors who often work for years at their craft before producing a book. By reducing author pay, the merger would make it harder for authors to earn a living by writing books, which would, in turn, lead to a reduction in the quantity and diversity of books—which subsequently harms consumers.”

Porter Anderson at Publishing Perspectives offers this analysis:

“In the States, antitrust challenges often are based on questions of monopolies—companies that become the sole or main providers of certain products or services. But this one is positioned by the Department of Justice as a question of what the government says is a risk of monopsony—in which a company might become the sole or main buyer of certain products or services. The question at its most simplistic level, then, becomes whether a PRH-S&S merger would create a company so large that it would control the vast majority of “top-selling” authors’ payments.”

It's important news to be aware of - will our US Publishing industry go down from a "Big Five" corporate publishers to a "Big Four"? Stay tuned...

Illustrate and Translate and Write On,
Lee

Will the Pending Merger of Penguin Random House and Simon & Schuster Make Publishing Less Diverse?

This Los Angeles Times opinion piece by indie publisher Chad W. Post, argues just that, saying the current ecosystem is one where "the most monied companies determine what is read."

The Authors Guild agrees the merger is bad for authors, stating, 

“there would be fewer competing bidders for their manuscripts, which would inevitably drive down advances offered…. The history of publishing consolidation has also taught us that authors are further hurt by such mergers due to editorial layoffs, canceling of contracts, a reduction in diversity among authors and ideas, a more conservative approach to risk-taking, and fewer imprints under which an author may publish.”

Chad discusses another troublesome dynamic of how indie publishers and the soon to be "big four" interact:

"For the conglomerates, the most financially prudent way to acquire authors who aren’t sure things is to treat independent publishers as farm clubs that identify and develop talent ripe for exploitation. Let the presses with the thinnest profit margins take the risks, seek out the undiscovered — the books readers didn’t know they wanted, the authors who change the way we talk about writing — and then, once they’ve proved these books can take off, just poach the authors. Simple. A winning formula."

But the case is being made that the winners aren't authors, or diversity of voices, or even readers. 

Illustrate and Write On,

Lee