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By Porter Anderson, Editor-in-Chief | @Porter_Anderson
Rabe: ‘We Would Of Course Be Interested’
A report by Alex Barker and Erika Solomon in the Financial Times is getting attention from the world publishing community.“German media group Bertelsmann is joining the race to buy ViacomCBS’ publishing arm Simon & Schuster,” Barker and Solomon write, “in a move that would entrench the owner of Penguin Random House as the world’s biggest book publisher.”
Thomas Rabe
As Bertelsmann’s CEO and chair Thomas Rabe refers to having combined Penguin and Random House “to create by far the largest book publisher in the world, actually the only global book publisher. Given this position we would, of course, be interested in Simon & Schuster.”
The publishing industry learned that ViacomCBS was looking to sell the Big Five S&S on March 4, when the late Carolyn Reidy, then Simon’s CEO, announced to the publisher’s staff that Viacom CEO Bob Bakish was “beginning the process” to sell the venerable publishing house. Reidy has since then been succeeded by Jonathan Karp.
At the time she sent her memo to the staff in the spring, she wrote, “We have a history of strong and long lasting relationships with our authors, and we will continue to bring important voices to readers around the world, both with our current publishing and our rich backlist of perennially favorite titles.”
And Jim Milliot writes today (September 2) at Publishers Weekly, “A number of international publishers are reportedly considering making an offer for S&S, as are some private equity firms.” Among them, he lists Hachette’s parent Lagardère.
Penguin Random House, of course, is the United States’—and the world’s—largest trade publisher. HarperCollins—also said to be interested in an S&S acquisition—is second. Simon & Schuster is the States’ third biggest, and Hachette is the fourth.
Simon & Schuster’s Strong Suit in 2020
Simon has perhaps most visibly distinguished itself during the current White House administration as a powerhouse in political nonfiction.
This summer alone, S&S was behind both Mary L. Trump’s runaway bestseller Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man and John Bolton’s highly controversial The Room Where It Happened: A White House Memoir.
Two of August’s biggest books have been produced by S&S, as well.
Sean Hannity’s Live Free or Die: America (and the World) on the Brink is in a fourth printing that will mean 630,000 copies in print.
And Brian Stelter’s Hoax: Donald Trump, Fox News, and the Dangerous Distortion of Truth was scheduled for a second printing of 100,000 copies within the first week of its release.
Tuesday, Simon & Schuster’s Gallery Books imprint released Melania and Me: The Rise and Fall of My Friendship with the First Lady by Stephanie Winston Wolkoff.
The publisher’s promotional copy calls Wolkoff’s book “the funny, thrilling, and heartbreaking story of her intimate friendship with one of the most famous women in the world, a woman few people truly understand.” Wolkoff became a former friend, consumers are told, “when she was made the scapegoat for inauguration finance irregularities.”
And S&S will also release one of this month’s most anticipated new entries, Bob Woodward’s new Donald Trump book, Rage, on September 15.
As for questions of antitrust hurdles, Rabe puts an interesting light on Amazon’s prominence, citing it as a positive for a potential PRH-S&S deal when asked by the FT’s Barker and Solomon about whether there might be regulatory issues around a Penguin Random House-Simon & Schuster merger. “If you look at the market holistically, particularly the strength of Amazon, and it includes self-publishing and the like, we don’t think this will be an obstacle.”
In Publishers Lunch today, Michael Cader, however, writes that S&S and PRH “would certainly be challenged by others in the industry others, and sometimes the grind of governmental review is enough to derail a purchase. Both the Quad-LSC merger and the Cengage-McGraw Hill deals were terminated over lengthy reviews and potential divestitures.”
Cader also sees the timing as particularly good for Bertelsmann, financially, because it has completed its buy of what was Pearson’s remaining 25-percent stake in PRH and now has “significant liquidity.”
Good First Half for PRH
At The Bookseller in London, Mark Chandler notes that in its report on the first half of the year, the publisher reported revenues declining 3 percent, from US$382 million to $370 million, but with earnings rising to $57 million—up 6 percent from $54 million.
Bertelsmann’s report made on Tuesday (September 1) saw overall revenue down 8.9 percent for the first half. But Penguin Random House saw only a 1.4-percent decline.
Markus Dohle
PRH worldwide CEO Markus Dohle said in a memo to the staff provided to Publishing Perspectives was talking of more expansion, saying in part, “Our German sister company officially joined our Penguin Random House family. Verlagsgruppe Penguin Random House brings 47 diverse imprints and almost 1,000 colleagues to our community, who–just like you–believe in the social and cultural importance of publishing.”
In his comments, Dohle said, “We never could’ve predicted a global pandemic, but we’ve been working toward a world in which online sales channels would have an even larger share of our overall book sales. A world in which we would need to activate every single competitive advantage we have been investing into over the last 10-plus years. So now is the time.
“The time to benefit from all our investments into supply chain, into corporate marketing, into consumer marketplace developments, and to focus even more on driving sales online. More than ever in our history.”
More from Publishing Perspectives on Simon & Schuster is here, and on mergers and acquisitions is here. More from us on Bertelsmann is here, and more on Penguin Random House is here. More on the coronavirus COVID-19 pandemic and its impact on international book publishing is here and at the CORONAVIRUS tab at the top of each page of our site.