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.