Simon & Schuster Is Up for Sale

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From The New York Times:

Simon & Schuster, the publishing powerhouse behind best-selling authors like Stephen King, Ursula K. Le Guin and Judy Blume, is up for sale.

Its owner, ViacomCBS, announced Wednesday that, after a “strategic review,” the book publisher was no longer essential to its business and that it would seek a buyer.

“We will look to complete a transaction that maximizes its value once the market stabilizes,” Robert M. Bakish, the chief executive, wrote in a memo to employees, most of whom learned of the sale only on Wednesday.

ViacomCBS, the newly combined business controlled by Shari Redstone, is betting its future on streaming and sports content. Owning a major book publisher does not fit into those plans.

A sale of Simon & Schuster, one of the five largest book publishers in the country, would shake up the publishing industry, which has become a winner-take-all business dominated by huge companies and brand-name authors.

A wave of consolidations has swept the book business in the last decade. In that series of moves, Penguin and Random House merged, Hachette Book Group acquired Perseus Books and News Corporation bought the romance publisher Harlequin.

. . . .

The company is going up for sale at an uncertain moment for publishers, who have struggled with lethargic sales and anxiety over the future of Barnes & Noble, the once-dominant chain that was bought last year by the hedge fund Elliott Advisors.

“It hasn’t been a strong growth industry in a long time, and what little growth there has been recently seems to be arrested,” said Thad McIlroy, a publishing industry analyst.

. . . .

Still, with the rise of Amazon and e-books, the business has suffered. In 1989, one of its best years, the publisher generated $1.3 billion in sales. Last year, sales were $814 million. The company’s profits have also declined, hitting $143 million in 2019, a 6.5 percent drop from the previous year. Legacy media businesses can sell anywhere from five times to 10 times annual profits.

. . . .

The potential sale of Simon & Schuster is part of a great unwinding taking place across the media industry as conglomerates cleave off or close down ancillary businesses. The spate of acquisitions in recent years — AT&T bought Time Warner and the Walt Disney Company absorbed the majority of 21st Century Fox — has largely been a defensive measure against Big Tech and a bet on digital video as the future of entertainment.

Books won’t play a significant role in the coming skirmish, in Mr. Bakish’s view. Simon & Schuster is “not a core asset of the company, it is not video-based, it doesn’t have significant connectivity to our broader business,” he said at an investor conference Wednesday morning.

Link to the rest at The New York Times

10 thoughts on “Simon & Schuster Is Up for Sale”

  1. AT&T bought Time Warner

    They could expand on this a little more. I’ve been seeing rumors AT&T may pull the plug on DC Comics. They want the license to make, for example, Batman movies for a new streaming service, but the comics themselves aren’t integral to that goal. And, I gather, people are reading comics less and less for various reasons. Gamestop is ending their “sell comics in our spinner racks” experiment, citing that customers don’t want to buy them.

    The Roaring Twenties are off to an interesting start.

    • Fanboy rumors.
      DC (and Marvel), as companies, are pocket change within ATT and Disney.
      Selling either would bring in nothing unless they were sold along with tbeir IP.
      They are, however, cheap IP factories for the conglomerates.
      So it would be “galactically stupid” to sell them.
      The root of the rumor is that the DC copublisher was fired for doing now the same thing Marvel did a couple years ago that tanked Marvel sales. As if it was Marvel’s execution and not a ridiculously bad idea. It took time but eventually Disney took notice of what was going on at Marvel (where the characters in the books bore no resemblance to the version in the cash cow movies) and put Feige in command.
      So when the WarnerMedia folks found out the DC was going to replace their franchise characters with all new, all different characters (no Clark Kent, no Bruce Wayne, no Diana of Temiscyra, no Barry Allen or Wally west, etc) and give them the classic names and *titles*…
      Well, they called him up and asked for clarification: it really was supposed to be a replacement of the entire line, not a companion (like, say, the old Marvel Ultimate Universe)?
      “Don’t. New 52 was bad enough.”
      ” I’m the publisher. ”
      “Co-publisher. And not anymore.”
      The thing is tbat it doesn’t matter how many comics might sell, just one movie will bring in far more money.
      What is going on at WarnerMedia is they’ve discovered that tbeir horror film formula (lots of well-made but cheap movies) is a surer money mint than betting on blockbusters.
      They don’t necessarily want tge next ENDGAME.
      What they want more JOKER’s. More SHAZAMS. And more CW shows. (People underestimate how much money those shows make.) Even the Harley Quinn movie will end up well in the black, over its full life cycle. What they don’t want is risk.
      They don’t care if DC sells a lot or not as long as it keeps generating IP and new ideas.
      Experimenting is fine.
      (Seen RED SON yet?)
      Dropping the cash cows isn’t.
      There’s a WW coming, a Batman movie, Flash, and eventually, even Supes.
      They want writing prompts.
      New52 was awful saleswise but it highlighted ideas that worked and ideas to steer clear from.
      It showed AQUAMAN could be cool.
      And James Wang ran with it to a billion-plus.

      DC COMICS IP is invaluable and the comics operation is valuable because it is an idea factory. And WarnerMedia owns most of what it produces.
      It makes no sense to disrupt the creativity pipeline. There’s more money in keeping it that selling it.

      S&S, however, is a pure middleman operation.
      When they acquire a copyright, ViacomCBS doesn’t automatically get the video rights. They still have to pay market rights. Or cheat the author.
      Either way owning S&S confers no advantage.
      Instead it is stagnant company in a stagnant market.
      (So are DC and Marvel. But they *own* their IP outright. Owning them generates big returns. Bigger ones if exploited properly.)

      So S&S is for sale but DC isn’t. As reported, without explanation, by its now sole publisher.
      Who now understand his role a little better than the fired one.

      • Elements of fanboy hysteria, sure. I’m not steeped in the comics media world, so I couldn’t be sure if the fanboys were just buying into the “soulless corporate bastards” stereotype, with AT&T in the starring role. It would be breathtakingly stupid of them to sell DC, most definitely.

        To be clear, the sticking point in one case isn’t that AT&T would sell DC, with it’s money making IP, but simply shut down the comic book wing and rely on Hollywood to exploit the IPs for their streaming service. If I understand correctly, this would be instead of leaving the “ideas factory” in the hands of people who think Iron Man should be a teenaged black girl, Thor should be a woman, and Batman should be in therapy for his crippling phobia of fluffy white bunnies (I made up that last).

        That’s the angle that piqued my interest. AT&T could easily say, “we’ve got a backlog of classic comics, and a sure pool of Hollywood script writers, so why do we need these 5G idiots again? That’s not the stuff that’s selling, so we can’t stream anything based on it.” Agreed they have “Joker” and “Shazam” and the CW, but did any of their storylines come from the last 10 years of the comic books? That’s the question I wonder if AT&T is asking.

        The fact that the 5G guy was tossed out makes me lean toward “AT&T is merely doing some welcome housecleaning.” Right now, “Wonder Woman: 1984” is one of the few movies I’m looking forward to this year. I’ve watched the trailer soooo many times. I’ve also heard “The Mandalorian” is good, so I’ll get it if it becomes available outside of Disney+. But as far as I can tell, those stories didn’t originate in any recent comics. Comments in the WW1984 trailer say elements are taken from older comics, e.g., Diana’s golden armor is from the 90s. I want there to be a return to form as far as “Making Comics Great Again,” when friends would tell me which graphic novels I must to read. I never hear anyone say that about comic-based storylines written now.

        Again, I’m not plugged in; I just hear about the crazy stuff. Which makes it hard to sift the wheat from the chaff in this case. I haven’t heard of Red Son at all. I went looking for the trailer, and from what I can see: this has a Batman vs. Superman storyline that makes sense!

        • Aquaman leans heavily on the NEW52 renditions. Especially but not exclusively Mera. The Black Manta origin. And wait until you meant Manta’s own teenage son. A delight.
          SHAZAM is based on this decades version, after they had to rename Bilky Batson’s hero persona from Captain Marvel to Shazam. I miss the classic Mary Marvel, especiaoy the 9 year old version, but the six member Shazam family is more unique.
          The Steve Trevor in WW is more NEW52 and Rebirth, where he’s a Navy Seal and top rank spy, not a male Lois Lane. In fact, the TV Lois Lane is patterned after the modern Rebirth rendition from 2016.
          In fact, a lot of the creators doing the movies as writers or producers, Goyer, Johns, Heinberg, etc, all have passed through DCCOMICS or started there.
          The characters and IP are old but the old stories and characterizations aren’t what’s being adapted but the newer, more recent ones. Some reports are that Shazam 2 & 3 will be filmed back to back (kids age fast) and will be based on a story that is still playing out in the comics.
          In a very real way, comics readers are the focus groups for tomorrow’s movies.

          That is something traditional hollywood script mills can’t do.
          Neither can NY publishing.
          DC was moved lock stock in barrel a few years back precisely because of that.
          The Warner folks wanted them close at hand to both WB and the Hollywood writers.

          While Marvel in Hollywood was building their movie empure, Marveo comcs in NY was cluelessly trying to replace the movie characters, the established straight white male types, and tanking, DC was refocusing on what used to work in ways that evooved them for current tines, but by *adding* new diverse characters or focusing on tbe diverse characters they already had. So Black Lightning got a great TV show. Vixen was moved front and center. JohnStewart got a chance to shine liie he does in the animated version. An all new Batwoman was introduced. Side by side the classics. Hal Jordan is Green Lantern but so are John Stewart, Jessica Cruz (check out the video release JLA vs FATAL FIVE, which is built around her), Kyle Rayner, Guy Gardner, and Simon Baz. Each different and interesting in different ways.
          DC does best when they add to their mythos (and corporate IP) whether trough Elsewords, in-continuity Legacies, or standalones like the DVD JLA: HEROES and monsters. They even did a series where STAN LEE got to create a whoke different set of characters that fit the names of the DC franchises but torally different.

          Didio didn’t get fired for experimenting but for forgetting the comics are an adjunct to the video business. They’re not just a creative playground but a business. Jon Kent, Luke Fox, and Cassie Sandsmark are all good characters but as Superboy, Batwing, and Wonder Girl, not as total replacements for Clark, Bruce, and Diana. And when the comics shops and trade press start griping, the Warner guys stepped in.

          As for Mandalorian it is pretty good. Only one, maybe two filler episodes out of eight. Worth signing up for D+ trial.
          The same applies to DCUniverse.
          Just not a once.
          And make sure you have a lot of free time the week you try DCU. In addition to tge cited DVD releases, they have must watch DOOM PATROL, HARLEY QUINN animated, SWAMP THING, two season of Titans, plus a full third season of YOUNG JUSTICE.
          Both are worth at least one month of subscription.

          One more thing: of late, Warner has discovered that the shows work best tge more comics accurate they are. Still adapted to the hew medium but thusting tgevIP seems to work best. In that vein come may, the CW and DCU will be running STARGIRL. Which, by the trailers on Youtube, is going to be a living comic book in both story and design. Right up to the giant mecha.

          The new shows have bigger budgets and better production values but they will never be anywhere but their streaming homes. The studios are doing what the big five should’ve done but never dared: going direct to consumers.

          Streaming video today is roughly where publishing was in 2010. Except that instead of backing off to protect existing distribution channels, Hollywood is leaning into the new ways with a vengeance. Turns out they’ve learned from what happened to the Manhattan Mafia.

          • Thank you, this is good stuff here. I see I have conflated DC with Marvel, in thinking they were both actively alienating their comics-customer base. So yeah, there’s no rational reason for AT&T to shut down DC’s comic book wing.

            This part:

            of late, Warner has discovered that the shows work best tge more comics accurate they are. Still adapted to the hew medium but thusting tgevIP seems to work best

            Respecting source materials is a good sign, and further indication that the recent source materials are also a rich vein of gold.

            I won’t be able to set aside time for the Mandalorian and the rest until much later, but at least I will have something to binge when I finally get from under my little avalanche.

            • The good news about the new streaming services is they’re cumulative. New stuff comes in, old stuff stays. And you get to watch what you want when you want.

              Check the trailers for STARGIRL. They could be straight out of the Johns JSA run.


              Or STARS AND S.T.R.I.P.E #1.
              They even cast a teenager *as* a teenager. They’ve come a long way from 25 year old Tom Welling as a 15 year old Clark Kent on SKALLVILLE.

              Also, if you trial DCUniverse and its archive, make sure to sample the SUPERMAN REBIRTH arc from 2016. Or SUPER-SONS. And last years YOUNG JUSTICE and NAOMI are actually good, considering they’re by Bendis.

      • They are, however, cheap IP factories for the conglomerates.
        So it would be “galactically stupid” to sell them.

        Is there a price point we can use to measure that? At what price does it lose the label of galactically stupid?

        • When $40M movies stop bringing in a billion and more.

          Everbody knows AVENGERS ENDGAME unadjusted gross is tbe biggest of all time but JOKER’s net is actually much higher and Warner risked only $40M instead of $750M for both Endgame and its setup Infinity War.
          When all is set and done, Disney got the higher revenue and hype but Warner had little risk, lots of cash, and an Oscar to boot. And that’s two Oscars in a decade for the same DC Character.


          Title……..production $…..opening…..domestic gross….global gross
          Harley Quinn $82,000,000 $33,010,017 $82,773,376 $195,703,839
          Shazam! $85,000,000 $53,505,326 $140,371,656 $363,664,533
          Aquaman $160,000,000 $67,873,522 $335,061,807 $1,146,894,640
          Justice League $300,000,000 $93,842,239 $229,024,295 $655,945,209
          Wonder Woman $150,000,000 $103,251,471 $412,563,408 $821,133,378
          Suicide Squad $175,000,000 $133,682,248 $325,100,054 $746,059,887
          Bats v Supes $263,000,000 $166,007,347 $330,360,194 $873,634,919
          Man of Steel $225,000,000 $116,619,362 $291,045,518 $667,999,518

          Averages…………$180,000,000 $95,973,942 $268,287,539 $683,879,490
          Totals………….$1,440,000,000………….. $2,146,300,308 $5,471,035,923

          On average, including “flops” like SUICIDE SQUAD (With a sequel that just finished filming), $180M investment grosses $685m globally.

          And this is just for officially connected movies so JOKER in’t on the list, nor tge BATMAN movies from before this decade, nor the tens of millions of net brought in annually by the CW shows or the WARNER ANIMATION direct to Disk releases or non theatrical revenues from the above-listed DCEU theatrical release.

          Clearly, Disney makes a lot more money off Marvel movies, but WARNERMEDIA’s DC take is hardly peanuts. And, more inportantly, moving forward there will be more demand for affordable content to feed the new streaming services. Here DC shines because where Marvel’s IP is over 95% superheroes, DC is 60 percent, with decades of great non-superhero content from their Vertigo line with franchises like Constantine/Hellblazer (horror), The Sandman (adult fantasy), Amethyst (young fantasy), plus DC published westerns, war stories, Noir Detective, straight adventure, and straight SF.

          WARNER has just begun to mine that IP beyond the Trinity. They’ve already announced four very different series for HBO MAX, on top of the three critically acclaimed ones from the DCUniverse streaming service

          So, while Disney would no doubt pay tens of billions for DC ip, WARNER isn’t so cash strapped as to give it to its primary competitor.

          One last example.
          After the generally worthy but badly executed mess that was DCCOMICS’ NEW52 effort, they pivoted to a more traditional take to their characters with the REBIRTH line. Where they still tried new things but based on the proven popular takes.
          Wity Superman in particularly they went from the bachelor urban crusader/action hero approach to the previius marriedvincarnation and evolve him to family man Superman with a sweet and innocent ten year old suddenly developing his own powers. The writer did a great job and when they paired him with Batman’s devil spawn Damien, the latest Robin, they struck paydirt creatively. Lots of fun stuff.

          Fast forward to this fall, when the CW will debut a Superman show featuring Clark, Lois, and two sons. One bright and happy, the other brooding. Now where could they have gotten the idea for a family man Superhero show?

          Its a very different game in today’s video world because of streaming.
          There is a hunger for engaging content to keep viewers engaged and minimize churning. That is something ViacomCBS has faied miserably at.
          Warner’s HBO has done better but with HBO MAX launching in two months they need even more content. And DC has over 80 years worth of IP to work with. Now is absolutely the worst time to drop it.

          In that world, DC COMICS is at worst a loss leader, at best a self-funding idea testing lab.
          ViacomCBS wishes tbey had a release like, say, BvS that outgrossed and out-netted all of S&S. Never mind WONDER WOMAN, AQUAMAN, or every studio head’s fondest dream: JOKER. With more to come.
          DC has never been as valuable as they are today.

          • What price, not what conditions?

            And, what alternatives does a firm have in acquiring content other than by owning the content producer?

            Is it galactically stupid for another conglomerate to pass up the opportunity to buy S&S? Do they know this?

            • Passing on S&S would be wise, not stupid.
              It is decling compony in a declning business priced too high.

              Note that both Disney and Warner long ago ditched their publishing business. Both are doing fine without them.
              So don’t expect a media company to buy S&S. They have way better uses for a billion bucks. Uses with much better returns on investment.
              The entire DCEU line of movies cost about as much as ViacomCBS thinks they can get for S&S but brought in way bigger returns.

              As I’ve said before if anybody buys S&S it will be somebody like Hachette or News Corp. Somebody used to the stagnant corporate publishing business.

              Streaming video is a growth business, corporate publishing isn’t.
              The other difference is video is expensive, a game for deep pockets, not for pipsqueaks. Both industries are under consolidation but publushing is consolidating downwards, to hide decline, which video is consolidating to fund growth.

              Right now 25% of the US population buys trade books to tge tune of around $14B a year. Netflix alone, spends $16B a year in content licensing and creation, resulting in a $3B a year net profit.
              Vs S&S, netting $140M with a declining gross.

              For contrast, 60% of the US is Video streaming already, with growth projected to grow 25% over the next five years.

              And that is solely the number of people watching some streaming, not the growth in spendibg which is likely going to be bigger.

              Right now, it makes more sense to spend $18B to buy ViacomCBS than to spend $1B to buy S&S. Whike I can’t see a single US media conglomerate buying S&S, I *can* see any of four companies junping to buy ViacomCBS to fortify their streaming archive. If they don’t it will be because of ViacomCBS’s heavy dependence on the declining cableTV and broadcast advertising businesses. Waiting for further declines there reduces the potential of a write down in a couple of years.

              Mind you, if the price comes down by maybe half, I coukd see Bezos buying it and merging it with the WaPo.

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