From Publishing Perspectives:
In a letter to the staff of Simon & Schuster this morning (March 4), the publisher’s president and CEO Carolyn Reidy in New York City says, “I am writing to let you know that today ViacomCBS CEO Bob Bakish announced that the company is beginning the process by which ViacomCBS will potentially sell Simon & Schuster.
“Whatever the outcome, this process does not change what we know to be true of Simon & Schuster: we are a great publishing house and one of the world’s best known publishing brands, with an incredible legacy and bright future.
. . . .
“We have a history of strong and long lasting relationships with our authors, and we will continue to bring important voices to readers around the world, both with our current publishing and our rich backlist of perennially favorite titles.
. . . .
“This process,” Reidy concludes in her message, “will surely be an adventure for all of us, but we are a company that has always risen to the challenges we face. It is your professionalism and expertise that makes Simon & Schuster great, and I thank you in advance for your hard work and commitment during this coming period of transition.”
In his coverage of the news, Brian Steinberg at Variety writes that Bakish said to investors today that “‘Simon & Schuster is not a core asset. It is not video-based. It does not have significant connection for our broader business. “We have had multiple unsolicited inbound calls about that asset, and so as the market stabilizes, we are going to engage in a process’ to examine strategic alternatives.
“ViacomCBS said publishing revenue in 2019 came to $814 million, down 1.3 percent from $825 million in the prior year,” Stienberg says.
Link to the rest at Publishing Perspectives
“We’ll have a different owner, but everything will remain the same.”
PG suggests if you don’t know who the new owner is, you have no idea whether and how things will change. Ms. Reidy could be the first one sacked. Almost certainly, a new owner will look for fat to trim at S&S.
Of note: S&S is the last big Manhattan corporate publishing still owned by an American conglomerate. Two others to go that way were WarnerBooks and Hyoerion, ditched by WarnerMedia and Disney respectively. So ViacomCBS following suit is no shock.
Since both the above were bought by Lagadere to create Hachette, they automatically become the number one suspect to buy the soon to be departed.
Amusingky, selling off S&S to reduce their debt load would have the “benefit” of making ViacomCBS better takeover target. This could get interesting.
Especially if they *don’t* find a buyer willing to cough up a billion.
One wonders what this will do to media tie-in novel management (etc.) for a certain well-known media property that started out on NBC in the 1960s. Or, for that matter, any other “packaged” IP system. One look at the copyright attribution in any recent printing of a Harry Potter book will give a hint about some of the landmines awaiting everyone…
Like this?
https://the-digital-reader.com/2018/03/15/simon-schsuters-vanity-press-launches-nanowrimo-writing-contest-exploit-authors/
“We’ll have a different owner, but everything will remain the same.”
Danger, Will Robinson!
Heh.
Reidy’s resumé is almost certainly updated and discreetly circulating.
And it’s equally certain so are a lot of others.
She knows exactly what happened after the randy Penguin took over Random House.
Lots of new freelancers will be joining the open market as soon as they announce a buyer.
If they find a buyer willing to drop a billion and a half on S&S.
Not a certainty.
I find it sort of odd that a company which produces video content wants to divest itself of a company that produces written content, given that written content is often the source material for the video content. I’ve heard that companies like Netflix are buying up almost any written content that they think they can adapt.
But Netflix and companies like it are not buying up publishers; they know better. If S&S are giving any discount to ViacomCBS on film rights to properties they publish, they are defrauding the authors of those properties. If they aren’t, there is no particular benefit to ViacomCBS in owning S&S.
I think they’ve just got tired of owning a business that they have no idea how to run. When electronic-media companies buy book publishers, it is nearly always a case of what Peter Lynch calls ‘diworsification’. The best remedy is to get out before you lose your shirt.
Not so odd.
Inevitable.
Even after the merger, ViacomCBS is on the small side to play in the exploding streaming market.
Plus they are late to the party. Like wedding reception late. Possibley after-tbe-newlyweds-left late.
They are asset rich,debt heavy, cash poor, and with big content expenses.
S&S is a stagnant company in a stagnant business with a low return value. It puts out 2000 titles a year yet barely breaks even in a good year.
Viacom merged with CBS because it was a takeover target over its video archives. It still is.
It’s CBS ALL ACCESS streaming service is several years old and is still has but 3 million or so subscribers. By contrast, Disney+ in five days hit 15 Million.
HBO NOW, much more expensive, launched later and has 20M.
They spent $200 million to buy the Pluto TV ad-supported streaming service and are making vague noises about launching a third, larger service built around the Paramount archives. All this after spending $15B in movies and TV shows in 2019. Paramount movies haven’t done too well in recent times and add insult to injury there was recently a report floating around they were looking to sell STAR TREK to Seth MacFarland (with NBCU as backers) to no result.
More?
Pre-merger, the two companies were valued at $30B. As of february, $18B.
When cordcutting analysts look to see which studios might be next to be sold, to Google, Apple, Amazon, or even Netflix, the list runs:
– Lionsgate
– MGM (New, not classic)
– ViacomCBS
– SONY
(Sony is low on the list because the cash cow is the Spider-man franchise but can’t be sold. If Sony sells tge full studio, the IP rights revert to Marvel/Disney. They could, however sell off the Columbia pictures library, much like MGM did in tbe 80’s).
Botton line is selling S&S makes money off a non-performing asset at a time they need big money to survive as a standalone. Compared to the video world, where nets are measured by the billion, S&S is dead weight. Its only real net value was in infouence buying, politician books but in today’s environment those are mostly money losers.
Plus, they need cash. Now.
The boat is taking on water so dead weight has to go.