ABA to Call on Justice Department to Challenge Penguin Random House Purchase of Simon & Schuster

From Allison Hill, CEO of The American Booksellers Association:

On November 17, I sent a letter to the Honorable Joseph Simons, chair of the Federal Trade Commission, to express ABA’s concern about the antitrust implications of a potential Simon & Schuster sale to Ingram, Amazon, or any of the “Big 5” publishers. I explained that the consolidation of publishing that this sale could represent threatens to undermine competition in the book industry, harm the interests of American consumers, and put bookstores and authors at risk.

The announcement today that Penguin Random House, the biggest of the “Big 5” publishers, is buying Simon & Schuster is alarming. As the dominant player in the publishing industry, PRH’s purchase of another “Big 5” publisher, further reducing the market to the “Big 4,” will mean too much power over authors and readers in the hands of a single corporation.

ABA will be calling on the Justice Department to challenge this deal and to ensure that no further consolidation of power be allowed in the U.S. book publishing industry.

Similarly, Open Markets Institute Executive Director Barry Lynn issued a statement following the announcement of the potential sale of S&S to PRH.

“Bertelsmann’s plan to take control of Simon & Schuster poses multiple dangers to American democracy and to the interests of America’s authors and readers. By bringing three of the big six publishers under one roof, the deal will concentrate vastly too much power over the U.S. book market in the hands of a single, foreign-owned corporation. The deal will make it harder for authors and editors to attract the support they need to research, write, and prepare the sorts of books Americans need to address the many serious political and economic crises we now face. It will also threaten the ability of independent booksellers — who are already reeling from the COVID-19 pandemic and other pressures — to stay in business,” said Lynn.

“Antitrust enforcers should block this deal. There’s ample evidence that concentration in the book industry is already harming readers and authors. Allowing more consolidation among the big publishers will further reduce the range of books and ideas that find their way into print and into the hands of readers,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance. “There is a growing consensus among the public and lawmakers that concentrated economic power is a serious threat to the nation’s well-being and that our antitrust laws must be strongly enforced. This proposed merger will be a test of whether the antitrust agencies have gotten that message.”

Link to the rest at The American Booksellers Association

PG received an “A” in an antitrust law during law school. Since then, he has not spent a great deal of time thinking about the topic.

PG does remember that the United States Department of Justice can take steps to stop or delay the sale of Simon & Schuster by ViacomCBS to Bertelsmann. If Justice takes some of the more extreme steps available to it, there’s a good chance of a long court battle.

How will S&S fare during such a battle? PG won’t predict the outcome of any antitrust review or lawsuit involving the Justice Department, but, since the announcement of the deal, job pressure on S&S employees has increased substantially and the company’s well-being has already been impaired.

Will anyone want to go to work for S&S if they have any sort of reasonable alternative? Is anyone closing in on retirement age going to consider jumping ship early? Is any literary agent with a brain going to take an attractive manuscript to S&S first or second or third? Is any intelligent new or old author going to sign a publishing contract with S&S unless there is absolutely, positively not any other alternative?

S&S is not an independent entity that can have any influence on what happens next. S&S is owned entirely by ViacomCBS and the people working for S&S have no control over their future occupational destinies. Presumably, the agreement the current owner has made to sell S&S to Bertelsmann includes a provision to the effect that, “Seller will continue to operate S&S in a normal manner until transfer to Buyer is complete.”

But things are anything but normal inside of S&S.

PG is generally aware that some Buy/Sell deals in other industries have included a provision to the effect that the Seller will fire enough people to reduce payroll and associated costs by X amount prior to the conclusion of the deal so the new owner doesn’t have to look like the bad guy/gal/monolith. This may include a list of people/positions to be terminated and/or a list of people not to be fired.

One of the benefits arising from the purchase that Bertelsmann may anticipate is a savings in people costs after the acquisition. If S&S is merged with another Bertelsmann entity, the resulting organization will likely not need two CEO’s, two CFO’s, two general counsels, etc., etc.

Usually, the redundant people are those working in the company to be acquired, but that is not always a sure thing, so people at S&S and people at PRH may all be a little nervous.

A whole lot of people will be freshening up their résumés over the next few months and trying to answer questions like, “Should I pitch myself as a replacement for XX at HarperCollins?” or “Where in the world other than in New York publishing can I find someone who might want to hire somebody like me with XX years of experience at S&S?”

While PG may not like the way some large publishers treat authors, he takes no joy in seeing individuals being fired or demoted for no fault of their own. For more than a few people at S&S, an already dismal Covid Christmas is going to be anything but merry and bright.

16 thoughts on “ABA to Call on Justice Department to Challenge Penguin Random House Purchase of Simon & Schuster”

  1. “ABA to Call on Justice Department to Challenge Penguin Random House Purchase of Simon & Schuster”

    Ha.
    Wishful thinking, right?

  2. said Stacy Mitchell, co-director of the Institute for Local Self-Reliance. “There is a growing consensus among the public and lawmakers that concentrated economic power is a serious threat to the nation’s well-being and that our antitrust laws must be strongly enforced. This proposed merger will be a test of whether the antitrust agencies have gotten that message.”

    You can sort of tell that she has something else on her mind when she says this…

  3. Legal neepery alert, but it’s really important in order to understand what’s really going on.

    The Department of Justice and Federal Trade Commission, which share somewhat overlapping authority to challenge mergers and acquisitions as antitrust violations, also operate under some numeric guidelines in a Department of Justice guidance document (which is presently under periodic, scheduled review, so no link here). Those numeric guidelines try to define “overconcentration in a market” by aggregating the squares of the market shares, expressed as percentages, of the top five market participants. (Yes, I’m hiding the ball in plain sight here, and will discuss it below.)

    Consider a hypothetical market in which the relative market shares — and I am not claiming that this is verifiably a reflection of the market relevant to this acquisition, although I think they’re close — before and after:

    Before = {34,19,19,16,9} = {1156,361,256,256,81} = 2110
    After = {50,19,16,9,2} = {2500,361,256,81,4} = 3202

    Under the Guidelines, any increase in that last number of more than 100 HHI units where either the “before” or “after” is over 1600 is “suspect”; over 2000, “overconcentrated”; over 2500, “presumptively anticompetitive.” (Notice that using these figures, the “industry” is already overconcentrated.)

    The key questions are (1) how does one define the relevant market? and (2) how does one define market share? And this is where things get interesting. The numbers I used in the example included parts of “book publishing” not ordinarily considered by the public — textbooks, STEM/professional reference, etc. — that dwarf trade fiction publishing. And those numbers are gross revenue estimates (not unit sales, certainly not profits manipulated through the magic of tax accounting). Most of the “pro-acquisition” rhetoric, however, appears to focus on unit sales of trade fiction… including electronic fiction, much of which is not in competition with Big Five materials (e.g., it includes hardcore porn, and don’t dismiss that as an element without thinking about it).

    The three things that you should take away are these:

    (1) The DoJ/FTC already blew it by allowing the RandyPenguin transaction to occur, pushing the market described here into “overconcentrated” territory. They would really blow it, under these market definitions, by not objecting here.

    (2) The market definition and measures really, really matter. This is where antitrust attorneys make their money; in at least 80% of antitrust cases that don’t involve overt price-fixing (like U.S. v. Apple did), the winner of the market-definition argument wins the case without regard to any other facts.

    (3) We’re in for a good time watching the posturing of everyone while they try to account for changing market conditions — a fundamental, mathematical weakness of the HHI, which presumes (explicitly) a mature and stable market (and implicitly assumes that there is no cross-market substitution, such as “podcast downloads” for “e-book downloads”).

    As an editorial note, the entire theory behind the HHI is BS. It is based upon calculations from government-stated production of defense commodities — not finished goods, even (“steel ingots,” not even “naval armor/ordnance grade sheet steel”) — in Europe from 1880 to 1928… and assumes that the sources of those numbers weren’t lying for political advantage or even just mistaken. And even then, using more-recent statistical tools, confidence in its results is just barely into “interesting, justifies further research” territory (and certainly not into “well-supported enough to make widespread policy” territory). But the HHI is what established Ed Meese-sponsored antitrust law accepts, so that’s where we must start (just like, in census matters, we can’t entirely ignore “three-fifths of all other persons” even though we’ve struck that language from the clause by amendment since).

    • Just curious: which is the relevant market definition that results in the “overconcentrated” number?
      At the time of the randyPenguin merger, the DOJ published verdict described the relevant market as *all* US print publishing, not just trade pbooks.

      Today, some would argue (as you seem to) that web-publishing counts, too. Plus ebooks. With Indie ebooks being about as big as the Penguin itself.

      Others that all disposable-income entertainment is the relevant market; the fixed eyeball-hours argument. So video and gaming would count (and dwarf the pbook side).

      By any of the latter, the shift of $800M is a rounding error.

      Finally, the newcomer to the WH is bringing in retreads from tbe Obama era so they might not see anything actionable. That was, after all the administration that rubberstamped the previous Penguin deal and the Comcast/NBCU merger while the outgoing crew tried to stop the ATT/Warner merger and lost in court because of the Comcast precedent.

      Finally, tbere is the “what’s the alternative” argument.
      ViacomCBS is in dire straights and needs cash fast to *try* to remain independent.
      Regardless of what DOJ says, S&S is being sold or shut down. And don’t discount the “shut down and stripped for parts”.
      And the Penguin outbid HC by half a billion so stopping the sale (it’s not really a merger, despite the media misrepresentation–Its more like MS absorbing ZENIMAX, but much smaller) would really hurt ViacomCBS and not measurably alter market dynamics for *customers*, which is what US antitrust is supposed to be about.

      Depending on the choice of relevant market, the Penguin is either a whale or a guppy. Unfortunately for the OP it can’t be both an underdog to Amazon and too big to allow.

      • (1) Those estimates are print publishing in volume form (that is, excluding periodicals, serials, and compilations thereof). Electronic publishing is not included because there are no verifiable figures… nor actual replicability. It’s even incredibly difficult to tease out the electronic-publishing aspects from commercial publisher revenues, etc. So they are estimates.

        And before anyone screams “but the future is electronic,” that’s not what the law requires; the law, and the DoJ guidelines, explicitly deny the relevance of anticipated market changes, except when those market changes are based solely upon control of enabling intellectual property (patents and standards, not copyrights). Further, the most-profitable segments of volume publishing are those most resistant to rapid or market-based transition to electronics; just think for a moment what would be required to shift the market in first-through-third-grade readers to electronic form across the country! (And it gets worse in specialty areas where it’s not considered safe or sufficient to have forms that require electrical power/lighting/communications, like aicraft maintenance manuals…)

        (2) I am not arguing for or against web publishing. I am only saying that if the DoJ follows the rules it has set forth, it can’t consider web publishing.

        (3) It was the senior career attorneys, et al., who sabotaged any review of the Randy/Penguin transaction, and almost all of them were holdovers from Bush II and Clinton. So don’t blame the Obama Administration too much there; instead, go watch The Thick of It again and ponder how the “civil servants” are the ones actually in charge. If there’s a Deep State to consider as a problem, it’s the combination of Reagan/Bush I/Bush II civil servants and the stagnant promotions during the Clinton administration that entrenched things — at least in the departments requiring professional status.

        (4) Viacom/CBS is far from in “dire straits needing cash.” That’s PR nonsense based on refusal to consider reducing its real (not publicly acknowledged) rate of return… or excessive executive pay that by itself amounted to nine figures in 2018. These are common problems across the entertainment industry, and have been since Clinton allowed elimination of Glass-Steagall (with a bunch of other hidden things).

        So I don’t buy the premise for the entire transaction. Explaining what’s really going on requires delving into Redstone family dynamics that are waaaaaaaaaaaaaay outside the scope of this forum… and I should disclose that I’ve been across the v. from CBS/Viacom almost continuously since 1998, so I’d also be relying on “ya just gotta trust me on this” stuff. IOW, YMMV. Heck, your mileage will vary (especially if you’re still trying to process Sumner Redstone’s estate tax returns).

        • Fair enough.

          About the ViacomCBS situation, though; they’re not crying wolf.
          They really are at risk: of a hostile takeover, as is the case for any operation with a significantly lower paper value than in real terms. And dropping dividends to free up (some) cash isn’t going to help. They basically zigged, when they needed to zag. They totally misread the streaming subscription market as a “secondary TV market” when it rrally is a Primary market all its own. Netflic got it completely right, they got it completely wrong. They were looking to the past while Netflix was looking to the future.

          Redstone really messed up with the merger and its timing; it reminds me of TimeWarner buying AOL just as the commercial internet opened up.

          Quick version: when the pandemic hit Disney got a $60B line of credit to stay independent. Think anybody is going to lend Redstone even half that amount? When they can buy them outright for less?

          Longer version:

          While Redstone spent all the time focused on the merger, the video world changed overnight as all the major players have shifted to the Silo model instead of the ads and everywhere licensing model.

          As a result, they have gone from a world where the bulk of their revenues come from B2B long term (with cablecos, streamers, and ad agencies) deals to one where the money comes from transient B2C, where you need to earn each viewer’s subscription every month or risk the “one month binger” churn. And from a world dominated by new theatrical releases and seasonal TV beats to one where the bulk of *their* corporate value is the Paramount archives as a bulk play.

          In fact, the bulk of the value of the entire merged operation is the TREK archives, not by themselves but as a backup to a subscription service rich in cash but poor in content. AppleTV+, for one. GOOGLE, PRIME, and PEACOCK, even NETFLIX, could easily bid up double or triple the $10B valuation of the merged company just for Paramount and their archives. Disney could, too, but the Feds would squawk. Ditto for Warner. Now imagine what a Gordon Gekko would do. That’s what Ted Turner and others did 40 years ago, to MGM and RKO RADIO, etc. They did it to monetize them via cable but what was valuable for cable is even more so for streaming subscriptions.

          The video world changed overnight and it wasn’t the pandemic that did it: it was Disney. Going from 0 to 60 (million) in 11 months flat is something unheard of. They were expected to get to 150M in 5-6 years but they got halfway there in one. They’ll probably hit 100M by next spring.

          Where Warner built their service around HBO and tbeir full movie and TV archives and their Movie IPs, CBS tried to build theirs around ads and old show spinoffs like THE GOOD FIGHT and DISCOVERY and have barely made it to 6 Million, mostly transient subscriptions. Churn is killing the already anemic CBS All Access and even (belatedly) adding in the Paramount movies and renaming the service Paramount + (how original) isn’t going to help. Because they’re still keeping SHOWTIME out.

          Worse of all, as the Forbes piece pointed out, they are spending all tbeir free cash in creating new content (yay!) but the money is going into MOVIES (nay) not streaming originals. Disney and Warner both just reorg’ed and moved the bulk of their spending and ongoing projects to the streaming side because there is more money there. As long as they do as Netflix does and keep a steady flow of new content coming out. It’s not just the pandemic but also the economics of movies: 50% of box, a couple times a year, and a single bomb can ruin the year, vs 100% of a predictable subscription cashflow stream (sic).

          Look at the economics for consumers: a movie outing for a family can run north of $30 so two outings is about the cost of a full year of Disney plus or six months of Netflix. Which is the better deal? For Disney, in 2019 they had a record 6 billion dollar movies. Of which they took in 50% in the US, and 25% in China. Generously, their movies grossed *them* about $3B. At 60M subscribers and tbe discounted annual rate of $70 Disney+ is running at $4.8 B. 50% better you don’t ignore.

          And that’s the top movie studio moneywise.
          PARAMOUNT is nowhere near that. Neither is SONY, nee COLUMBIA, not LIONSGATE, nor MGM.

          All are in play.
          If Apple ever got serious about streaming video they could buy them all. And still be only fourth in the business.
          (That’s why rubberstamping Comcast/NBCU was a…problematic decision.)

          ViacomCBS is now running for its life and its geriatric management painted themselves into a corner. They’re lucky Bertlemann is willing to overpay double the S&S value since it gets them enough cash for another month of operations. But in shedding tbst dead weight, it makes the rest of the mess even more valuable.

          They’re desperately trying to buy time to make their streaming service viable, make up the movie revenues that aren’t coming back amid declining cable revenue (cable is losing a million accounts and more each month) and the ongoing decline of broadcast. The odds are not on their side.

          Streaming is now in gold rush mode; everybody with an archive and and audience wants in. A&E and BET are in. Discovery is coming this month. Hallmark has been in for a while and they are everywhere on the live streaming faux-cable services, especially the cheap skinny bundles. PEACOCK is ramping up. All under 10M, usually barely over 1M.

          Not all will survive. They can’t. There’s only so many eyeball hours and so much disposable cash to go around. Consumers aren’t going to ditch their hundred dollar cable bill to spend as much on streaming. Instrad, they’ll subscribe to 3, maybe 4 and churn the rest, if at all. The $50 monthly savings they’ll pocket.

          Today is already too late to be starting and 2021 way too late.
          The top four spots are already claimed:
          – Netflix is king with 190M subscribers and new movies and entire series for bingeing weekly. Tbeir ceiling looks to be 250M, eventually. Most growth will be international.
          – HBOMAX is looking to slowly transition its 150M cable subscribers to streaming: same price, double the content, and it’s on demand. They ‘ve been producing movie quality streaming content forever; now they’ll be doing more. Tbey’re already international.

          – Disney has D+ at 60M plus Hulu at 30M and ESPN+ at 3M. Already international. Their ceiling? 200M easy. How much beyond that depends on how international their content gets.

          – Prime is the wildcard. Technically they have 150M but since Prime is a bundle of perks plus video so churn is no concern. They have no significant archive to support the originals but they have the most “prestige” originals. They dropped $2B just to secure the rights to a Tolkien prequel series (origin and rise of Sauron!) and will be spending at least that much on production.

          – PEACOCK is the fashionably late player, hoping to squeeze in before the door shuts. They’re the ComcastNBCU entry which makes them as much of an oddball as Prime. They’ve grown quite fast into the 15M range as of Sept but since the service includes a “free” ad-supported tier there’s no telling how many of those are paying subscribers.

          Note that all those could buy Viacom alone, as Forbes suggested, or the entire mess Redstone has created.

          If anybody is shocked by S&S being sold, wait until the archive studios get scarfed up. I expect a falling dominoes scenario where one of the last four (MGM, PARAMOUNT, COLUMBIA, LIONSGATE) goes and the rest of the buyers jump in to get the rest while the getting is good.

          As with the bloated Penguin, the matter of size is dependent on context.
          To the ABA, $4B a year is huge. To ViacomCBS it is a month or so of gross. To Apple, a couple days worth, and ViacomCBS is just pocket change. SALESFORCE just dropped $27B to buy SLACK to better stand up to Microsoft. Disney paid $71B for FOX and ATT paid $85B for Warner. Bigger deals are coming. (Tesla’s Musk said recently he would consider a merger. A change.)

          There be giants out there.

          Regardless of what yardstick DOJ uses in the end, the one that really matters in the outside world is the one defined by the substitution rule: if two products can substitute for each other, they’re in the same business.

          Trade books, videos, games, they’re all entertainment.
          In the end, the eyeballs rule.

          • Look at the economics for consumers: a movie outing for a family can run north of $30 so two outings is about the cost of a full year of Disney plus or six months of Netflix

            More than $30, and if you look around you’ll see 80-inch TVs walking out of Costco every few minutes. In the past I have watched movies in secondary showings on screens that size. People are tired of paying $10 a ticket, $10 for popcorn and then having to deal with some morons crying baby and a bunch of mouth-breathers who talk through the film. Streaming lets you watch much more stuff, pause it, deal with your OWN crying baby, do your OWN talking, or not as you wish, rewind, rewatch, look at your phone – basically, watch the movie on YOUR terms, when you want, how you want.

            The economics of streaming also means that the nature of visual entertainment itself is changing. When I was a lad, variety-based shows were still a thing, and any repeating property had to make it’s episodes each stand by themselves so it could be easily resold. It was a big deal when two episodes of anything had a common continued theme. Now, vaudeville is truly dead, and movies themselves tell an ongoing story that develops over time. “The Crown” would not have been possible 20 or 30 years ago. Nobody would have done it in the format it is today because there was just no virtual shelf to stock it on, no viable delivery mechanism.

            That, and if Covid is not fully vanquished theaters will collectively go tits-up. A huge chunk of the public is concerned enough about infection to avoid theaters no matter what is playing in them. They could easily turn into the albatrosses of 2020+.

            Penguin buys S&S? A few newspaper mentions and some hand-wringing lit majors. Nobody cares.

            • I recently upgraded my mother to an *entry level* 65″ 4K Vizio. List price $460. No discount sale (yet). It support all current HDR and digital audio formats, including both Dolby Audio and Video. HDMI 2.1 and all the required features used by the next Gen gaming consoles. The image quality is stunning. Limitations? It only runs up to 60fps (but it supports 24/48) and any rate between 50-60fps for gaming. And the top brightness is merely adequate.

              Two years ago, such a set didn’t exist at all, even in the top of the line OLED monsters. Today it is entry level .

              My first Flat Panel, ages ago was a 42″ FullHD with first generation HDMI. It was a bargain at $2500. Most equivalent sets were $4000.
              Today that would be a top of the line 80″. Maybe running 8K. Theaters can’t match that.

              Those are list prices–no discount.
              I can’t imagine what next spring’s closeout sales will bring.

              To add insult to injury for the closed theater operators, Warner decided it couldn’t sit on the finished WONDER WOMAN 84 anymore, three times delayed and slated for Dec 25 release globally, so they will release it day and date for free to HBOMAX subscribers. In 4K with HDR and Dolby audio. To watch and rewatch at will for one month.

              Theaters won’t die but their numbers are about to shrink dramatically. (Like bookstores.)
              Tbe days of 30 screen multiplexes are probably over.

            • Indeed, video storytelling has been evolving since the 70’s.

              The end of the studio system, the cable era, first run syndication, Turner hoarding Old movies, HBO bringing theatrical production values (and budgets) have all been leading to tbe streaming Silos, which are effectively a new kind of studio system.

              (BTW, it is notable tbat the ruling that killed the studio system–the Paramount Consent–died a couple months ago. Studios owning physical theaters is irrelevant now.)

              Both Disney and HBO are putting out series of shows where dach “season” has a budget comparable to a Hollywood blockbuster. Say $200M. MANDALORIAN, WATCHMEN, The new PERRY MASON, and all the new shows under production are indistinguishable from Hollywood’s best. And on top of that we’re seeing movies for streaming matching and beating the old movie studios.
              With more to come.
              The combination of big budgets and creative freedom are letting Netflix draw in folks like Coppola, Amazon Spike Lee, HBO Zach Snyder. And more, they’re developing a whole new generation of directors and producers weaned on the new rules.

              As discussed here before, traditional movies have been limited by runtime, much as tradpubbed stories have been limited by fixed word counts, but the new streaming series aren’t. Individual chapters can be 30, 35, 50 or 110 minutes long and follow narrative beats dictated by the story, not the need to insert ads every few minutes.

              Its a whole new era and viewers are responding by opening their wallets.

              The old guard clinging to the old ways are at a serious disadvantage. Netflix pioneered the new era but it is going to be Disney and Warner who will most benefit. The have the money, the archives, the IP generator franchises, and the audience size. All four are essential.

              And, going back to the OP, ViacomCBS only has the archives. They are long on ambition but way short on cash.

          • I should probably have been more explicit and condemnatory about Viacom’s “need” for capital.

            Anyone seeking to engage in a hostile takeover of Viacom will have to personally convince and buy out Shari Redstone, because the multiple-classing and voting-rights structures of Viacom give her majority control of the entire conglomerate. It’s a several-stage thing, but that’s exactly the point: Hiding who’s actually in charge and how insulated from reality that person/entity can be.

            That makes this about ego far more than about money. (I can think of a certain organization controlled by a former New Yorker through his legal residence in Florida that is disturbingly parallel. Or, for that matter, of a certain organization controlled by a former Australian.) Viacom is in no danger whatsoever of bankruptcy, so any “forced sale” of Viacom means “Shari Redstone decided to do it for Reasons” — Delaware law provides virtually no protection at all for “minority shareholders” who would rather force the sale through in a multiclass stock corporation, especially one ultimately controlled by a trust that has a merged, sole trustee and beneficiary. Under the business judgment rule, if she decides that there are good business reasons not to sell, that’s pretty much final — the remedy that the minority shareholders have is to sell their shares to someone else.

            So the “must sell” narrative is based on an alternate reality. That this is all too appropriate for any media conglomerate is beside the point!

            • Have you looked at Viacom’s debt load?
              It’s higher than its valuation.
              https://www.forbes.com/sites/noahkirsch/2020/04/08/viacomcbs-downward-spiral-is-accelerating-as-talk-of-unraveling-grows/?sh=571db57c7b09

              Their last quarterly (prepandemic) they ended up with $274Min loses, minimal free cash, and an $800M payment due in a few months. Those numbers might acceptable on a startup but on an aging company with $18B in debt?

              Paramount can’t film new movies, they have no way to monetize the existing ones, and tbeir cable and TV streams are drying up.

              Whatever Redstone’s ego may want, if the bankers owning the debt come calling, her options are going to shrink. If she’s lucky might save the CBS part (much as the Murdochs saved Fox TV), by selling off the movie sections, as Forbes was saying last April.

              Their prospects haven’t gotten any better since.

              • A substantial part of Viacom’s “debt” (42% when I last looked at public reporting in 2018) is either accounting magic or internal lending. That combination (although not quite as high as 42%) is extremely common in film/tv companies. Then, too, consider your source: Forbes believes that it’s great to be a lender, but inherently bad to be a borrower, and has since the 1970s.

                The best demonstration that Viacom’s debt is not truly crippling is that it has had no difficulty getting operating capital extended to it since Sumner Redstone’s legal competence was first called into question.

                So I think we’re going to have to agree that “almost all of the stated numbers are dubious” and to disagree elsewise…

        • You can slice and dice or aggregate all you want but in tbe end its how consumers vote their eyeballs and pocketbooks that defines markets.

          The one thing those people, BERTLESMANN as well as the ABA, refuse to understand is that the internet is GLOBAL. And that changes everything. Scale is a cricial part of the game.
          Innovation more so.

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