From The Wall Street Journal:
News Corp has agreed to buy the consumer arm of educational publisher Houghton Mifflin Harcourt Co. for $349 million, marking the media company’s second deal in less than a week.
The deal adds a portfolio of high-profile novels from authors such as George Orwell, Philip Roth and J.R.R. Tolkien to News Corp’s HarperCollins Publishers division. The Wall Street Journal on Sunday reported that the companies were nearing a deal.
The sale would allow Boston-based Houghton to pay down debt and focus on its digital-first strategy in education, goals that the company had set when it put HMH Books & Media on the block last fall.
The deal indicates that New York-based News Corp, which in addition to HarperCollins owns Wall Street Journal publisher Dow Jones & Co. and news organizations in the U.K. and Australia, among other assets, is looking to expand through select acquisitions after a period of slimming down through sales of noncore businesses.
. . . .
“Timeless writing is a timely source of revenue and the potential to create highly profitable audio and video works flourishes with each passing digital day,” News Corp Chief Executive Robert Thomson said.
News Corp is focusing investments on growth areas including books, digital real estate, and the Dow Jones unit, a person familiar with the situation said.
In an interview, HarperCollins Chief Executive Brian Murray described Houghton’s catalog of children’s and adult titles as a “crown jewel.” The unit’s children portfolio includes the “Little Blue Truck” and “Curious George” series, and other favorites such as “The Polar Express” and “Jumanji.”
Mr. Murray also cited Houghton’s focus on transforming its children’s titles and brands into streaming and interactive-gaming opportunities. “They have a good team and it should help us accelerate our own children’s activities on that front,” he said.
. . . .
HarperCollins has been a strong performer during the pandemic, which helped propel book sales. In its most recent quarter, the unit posted a 23% growth in revenue to $544 million and 65% jump in profitability to $104 million.
Houghton’s consumer-publishing unit generated revenue of $191.7 million in 2020, accounting for approximately 19% of Houghton’s net sales. Other core properties of HMH Books & Media include the Peterson Field Guides, which cover topics ranging from birds to fish to wildflowers; lifestyle titles from Martha Stewart ; and the Carmen Sandiego franchise.
HMH Books & Media also boasts a strong line of cookbooks that includes titles by Jacques Pépin, Mark Bittman and Priya Krishna.
. . . .
The deal marks the second sale of a well-known publisher in less than six months. German media giant Bertelsmann SE, which owns Penguin Random House, last November agreed to buy Simon & Schuster from ViacomCBS Inc. for almost $2.18 billion.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
For PG, the key information bit was “transforming its children’s titles and brands into streaming and interactive-gaming opportunities.”
Perhaps he’s biased, but this didn’t sound like a ringing endorsement of books on paper. Again, he wondered whether the buyer or the seller is going to look like it got the best out of this deal in 5-10 years.
HMH wasn’t big enough to be counted as a “big” publisher, even though Hachette started out smaller. APub has probably been bigger than both for a while, too.
The “big” publisher adjective is more a reflection of their status as appendages of foreign-based multinationals than their actual size and relevance to the US publishing world.
The remaining US-based trade publishers are all smaller and more focused on specific markets and mostly beneath the notice of the NYC establishment media. Which is probably good for them. Helps preserve their independence.
The consolidation that started in the 80’s is still ongoing but unless Lagardere is willing to sell of Hachette the count will remain at 4; neither News Corp nor Holtzbrink has shown much interest in selling to Bertelsmann. Most likely they’ll continue to prop up their nominal market share by buying up smaller publishers.
To be precise, HMH as a company (pre-deal) was bigger than S&S.
But the education side of the company was much bigger and, like Pearson before, are getting out of trade books.
A side note: HC was a contender for S&S so buying HMH’s trade book business is a consolation prize. Plus it says they fully expect the S&S sale to Penguin to go through, whiners notwithstanding.
Is it now “The Big Four”?
Is it “The Big Three” (or Two) RSN?
I don’t know about the adult titles, but the childrens titles listed as crown jewels all look like they have already had their day.