Massive book deal proposed
The Canadian Press - Nov 25, 2020 - Business Buzz

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BERLIN — German media giant Bertelsmann said Wednesday that its Penguin Random House division is buying rival Simon & Schuster, in a megadeal that would reshape the U.S. publishing industry.

Penguin Random House, already the largest American publisher, will buy the New York-based Simon & Schuster, whose authors include Stephen King, Hillary Clinton and John Irving, from TV and film company ViacomCBS for $2.17 billion in cash.

“Simon & Schuster strengthens Bertelsmann’s footprint globally, and (particularly) in the U.S., its second-largest market,” the Guetersloh, Germany-based company said in a statement.

The purchase of Simon & Schuster would reduce the so-called Big Five of American publishing, which also includes HarperCollins, Hachette Book Group and Macmillan, to four.

The deal, expected to close in 2021, requires approval from the US Justice Department. No U.S. publisher in modern times would approach the power of the new company. ViacomCBS says Bertelsmann will pay a termination fee if the deal fails due to regulatory reasons.

Agents and authors often worry that a concentration of power in publishing could mean less competition for book deals and lower advances.

“As an organization of writers it’s important to us that the publishing industry (thrives), and that there be multiple, robust outlets to bring the widest variety of books to audiences,” said Suzanne Nossel, the CEO of PEN America. “To the extent that efficiencies are garnered through consolidation, it is our hope that they are a catalyst to enable greater investment in authors, books, and outreach to readers.”

Bertelsmann’s rival News Corp., which owns HarperCollins, slammed the deal. “Bertelsmann is not just buying a book publisher, but buying market dominance as a book behemoth,” said News Corp chief executive Robert Thomson said in a statement. “This literary leviathan would have 70% of the U.S. literary and general fiction market.”


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