Back in November of 2021, Penguin Random House (PRH) announced the acquisition of fellow bookseller Simon & Schuster (S&S) for just over two billion dollars. Because, if the acquisition fully went through, about 66% of major publishing would be under the same company, the Department of Justice (DOJ) filed a lawsuit halting the consolidation. Now, one year later, the judge over the trial decided in favor of the DOJ, therefore preventing the merger from going through.
The full statement from the judge will be released soon, as both parties are meeting to suggest redactions, but in the meantime, this is a big win for authors, readers, and smaller publishers. While 66% isn’t owning the booksellers’ market fully, this sole company would largely dictate how publishing worked. There are only five major publishers: PRH, HarperCollins, Macmillan, S&S, and Hachette. With most imprints going through these “Big Five,” PRH (1st) and S&S (4th) combined make up that 2/3.
Despite PRH’s CEO Markus Dohle claiming that S&S and PRH could still bid against each other for a title or book deal (a point on an overall claim that this deal was good for authors and consumers), he admitted that this couldn’t be enforced. For more details, check out the extensive coverage from Publisher’s Weekly, Jess Owens’ compressed coverage, and commentary from those in publishing.
What happens next?
PRH will likely try alternative measures to attain S&S. A spokesperson for PRH already signaled the company will aim for an appeal.
We strongly disagree with today’s decision, which is an unfortunate setback for readers and authors, and we will immediately request an expedited appeal […] We believe this merger will be pro-competitive, and we will continue to work closely with Paramount and Simon & Schuster on next steps.
After the trial, S&S shared a company memo with The AP where CEO Jonathan Karp declared, “despite this news, our company continues to thrive. We are more successful and valuable today than we have ever been, thanks to the efforts of all of you on behalf of our many magnificent authors.” Pretrial and during the trial, Macmillan and HarperCollins both expressed interest in acquiring S&S. If S&S is unable to sustain itself, it may be sold for parts, and PRH could get parts of it anyways.
Major news sources like NPR and The New York Times have called the DOJ, under the Biden Administration, the most aggressive in cracking down against monopolies and mergers that would limit competition in decades, from Democratic and Republican leaders alike. They can’t (even if the will were there) tackle everything, but I’m glad to see it happen here.
(via NPR, featured image: Penguin Random House, Simon & Schuster, Creative Commons, and Alyssa Shotwell)
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