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Summary
- German media group Bertelsmann is set to buy publisher Simon & Schuster at USD 2.17 billion.
- The deal if closes, is expected to create a market dominator in the US publishing industry which houses three other dominant players
- Agents and authors are raising concern about the reduced competition and lower advances post deal closure.
German media group Bertelsmann, through its company Penguin Random House (PRH), is set to buy publisher Simon & Schuster at USD 2.17 billion from TV and film company ViacomCBS. The acquisition is expected to close in 2021 and requires approval from the US Justice.
The deal, if it happens, will see Bertelsmann’s PRH turn into a mega-publisher. Bertelsmann already operates and owns an extensive portfolio of broadcast, music and online businesses. For the German media conglomerate, which took control of PRH in less than a year, the addition of Simon & Schuster is expected to create a book behemoth.
New York-based firm Simon & Schuster was established in 1924 by M. Lincoln Schuster and Richard L. Simon. It later ballooned into a big publishing company comprising 30 publishing units and prominent literary treasures. The authors of the Simon & Schuster include the likes of Stephen King, Hillary Clinton and John Irving.
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Image source © Kalkine Group 2020
In March 2020, Simon & Schuster was put up for sale. The company's chief executive Carolyn Reidy died suddenly in May and was replaced by Jonathan Karp. The book publishing company also faced lawsuits from the administration and Trump family when Trump tried to control the publication of books that were critical of him. Even though Trump could not succeed in manipulating the publisher however it did make for quite a challenging time for the company.
The collaboration will change the market equations drastically for three other companies that dominate the US publishing market. These are HarperCollins, Hachette Book Group and Macmillan.
Agents and authors pensive over the deal
The news is creating a ripple in the publishing market, with many agents and authors concerned about the concentration of power in the US publishing, as it could reduce the competition over book deals and might also lead to lower advances. The prominent writers' organisation, Authors Guild has opposed this deal and urged US Department of Justice to intervene as it is anticipated to impact market competition, making itextremely challenging for the authors and agents to negotiate with publishers.
Bertelsmann's rival News Corp., which owns HarperCollins, is also against the deal and said that this is not about buying a book publisher but buying the market dominance.
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