From Publisher’s Weekly:
Penguin Random House’s bid to buy Simon & Schuster was always going to change the future of the world’s largest trade book publisher, but the remake is not happening along the lines former PRH CEO (and current CEO emeritus) Markus Dohle had originally planned. The ruling by Judge Florence Pan that stopped the acquisition set off a string of events that included Dohle’s resignation, the promotion of PRH US COO Nihar Malaviya to interim global CEO, and PRH US CEO Madeline McIntosh’s decision, announced last week, to step down once she has helped Malaviya complete the creation of a new organizational structure for PRH.
Though the restructuring is still a work in progress, its goal is to reinvigorate internal competition for new titles among PRH’s many imprints while also providing multiple touch points for agents to pitch their books to different PRH editors. The question about how aggressively different PRH imprints actually bid against one another came up during the trial of the Department of Justice’s suit to block PRH’s S&S purchase.
The reorganization will also put in place a new corporate leadership structure that is unlikely to include a new PRH US CEO. Instead, the leadership group will comprise executives from different parts of PRH (at present, there are no plans to hire someone from outside the company) who will bring different ways of thinking about the business. The new structure will also reflect PRH’s commitment to its DEI initiatives and continue to feature women in positions of power. The current U.S. board, including McIntosh, is composed of 12 women and two men.
In his memo to staff about McIntosh’s departure and the reorg, Malaviya, who is widely expected to become the permanent global CEO, wrote that he’s working closely with her “to minimize any disruption to the company and all of you. I understand that changes like this naturally create unease. Please rest assured that we will move as quickly as possible.”
According to sources, if all goes well, the new structure could be in place by the end of February. It isn’t clear if the restructuring will address the question of finding a replacement for Gina Centrello, who retired in January as president and publisher of the Random House Publishing Group.
McIntosh said that with all the company has gone through over the past three years—coping with the global pandemic, the agreement to buy S&S, and the subsequent trial—she felt the time was right to step away. “I am very proud about what we have accomplished together,” McIntosh told PW.
Link to the rest at Publisher’s Weekly
As PG has opined in previous posts, this merger was never going to happen. Period.
PRH and S&S are both guilty of self-inflicted wounds. If some poor soul actually wants to get into traditional publishing as an employee or an author, PG opines that PRH and S&S are both going to be highly-impaired organizations for a significant period of time to come. They’ve already lost some significant players and more than a few resumes’ are floating around Manhattan, London and, perhaps, Prudhoe Bay, looking for a new home.
Both companies need to hire different antitrust lawyers and actually listen to them if they ever decide to walk down the merger/acquisition path again in the next 5-10 years because the folks at the Antitrust Division of the Justice Department who handled this case will be happy to hit the replay button on a career-making win.
PG thinks no organization in big publishing should be anything but super-cautious about any sort of joint business activity for some time to come.
That said, PG wouldn’t be surprised if the real owners of the major US publishers start looking for a bigger fool outside the publishing biz to take title to these boat anchors.
But, of course, as always, PG could be totally wrong.
OK. This has gone too far. I’m triggered. I spent ten years at Prudhoe Bay, and a publishing resume wouldn’t make it out of the cold.
At least they’re finally acknowledging the mess that 10% inflation brings.
They can’t cover inflation up by reprting unadjusted numbers anymore.
Sadly, Felix, you’re right. I just wish that the ego-inflation in commercial publishing was within an order of magnitude of being as low as 10% — it drives an awful lot more than does mere filthy lucre.
Over at HC lucre still rules; they’re still trying to squeeze the staff to show some.
5000 employees getting pink-slips. 5%.
Probably won’t be enough by itself.
It would be if the entire 5% was in the C-suite. Any complaints that this would leave the inmates running the asylum would, and should, be laughed off by “You’re saying that and your business is dealing with authors? Bwahahahahahahahahahahahahaha!”
True in the short term. But the people making the decisions aren’t going to put themselves out of business. The problems the Manhattan Mafia faces are structural and economic and the latter are beyond their control. Costs reduction will achieve nothing because the enduring problem is on the demand side. At this point I doubt even going full digital can save them, long term. I’m seeing a parallel to the 50’s/60’s slow death of the Hollywood studio system.
I expect the folks that cheered when the judge blocked the S&S sale in order to “protect” the market for big advance projects will be disappointed when the money for those projects dries up over the next few years because of inflation and the ongoing restructuring of North American economies sucking up whatever free capital remains after the boomers finish their exit from productive life. S&S isn’t going to be the only BPH whose owners will try to ditch and fail to find a buyer, mostly because the pockets with the money will be chasing bigger payoff ventures.
A confluence of trends ranging from inflation, labor shortages, and (wealth) taxes is reducing the free cash flow in the US economy and both at the macro and consumer level most of what remains is going to go to Maslov.
Canary in the coal mine:
https://twitter.com/stormrobinson/status/1611582829678440448
The tiny remnants for entertainment are going to be fiercely fought over. (C.f., Disney in crisis, Activision merger fight, etc)
FWIW, I don’t see high priced books getting much of it.
I think they need a Six Million Dollar Man (adjusted, naturally, for inflation, and thus a starting salary of $43 million including bonuses). And he’s already in-house; after a passel of acquisitions over the years, the original publisher of Cyborg is buried deep, deep in the corporate structure of Randy-Penguin.
Frankly, I’d use those bionic legs to run away.