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And so the Big Five became Four. Bertelsmann’s acquisition of Simon & Schuster for $2.2bn sees further consolidation in the publishing industry and reaffirms the group’s position as the world’s largest publisher ahead of Holtzbrink (owners of Macmillan), NewsCorp (owners of HarperCollins) and Lagardère (owners of Hachette).
But that’s if it goes ahead. There are numerous voices calling for the deal to be looked at because of monopoly concerns. In the US the Authors Guild has called on the Department of Justice to block the buy. It said: “The history of publishing consolidation has also taught us that authors are further hurt by such mergers due to editorial layoffs, cancelling of contracts, a reduction in diversity among authors and ideas, a more conservative approach to risk-taking, and fewer imprints under which an author may publish. The Authors Guild calls on the Justice Department to challenge PRH’s purchase of S&S, and refuse to allow even further consolidation of the US book publishing industry.”
Among British publishers, Profile MD Andrew Franklin said: “It’s clearly got nothing to do with good publishing, and everything to do with Bertelsmann trying to stake a monopolistic position. It’s unhealthy for competition, it’s unhealthy for authors, it’s unhealthy for bookshops and competitors because they take a commanding position, and it’s very unattractive. There will be more job losses in our industry, and no doubt they will start beginning to squeeze terms on bookshops and authors, and agents, printers, paper suppliers.”
Franklin believes that in the long term “it is not healthy to have one very large player that is much larger than all the other players put together. It also slightly speaks of their own incapacity to achieve organic growth. It’s not good”.
At News Corp, chief executive Robert Thomson said: “There is clearly no market logic to a bid of that size—only anti-market logic. Bertelsmann is not just buying a book publisher, but buying market dominance as a book behemoth. Distributors, retailers, authors and readers would be paying for this proposed deal for a very long time to come. This literary leviathan would have 70% of the US Literary and General Fiction market. There will certainly be legal books written about this deal, though I wonder if Bertelsmann would publish them.”
But others were less critical. Jonny Geller, CEO of Curtis Brown, pointed out that the merger of Penguin and Random House went smoothly and he believes the group’s imprints retain their identity and independence. Fellow agent Clare Alexander of Aitken Alexander Associates felt it was the best outcome for Simon & Schuster, and that PRH “has already demonstrated their ability to retain the editorial integrity of different divisions and imprints”.
But there was another note of caution from the US. Gail Hochman, president of the Association of American Literary Agents, said: “We have great respect for both PRH and S&S, both of which are fine companies composed of great imprints, and we wish them well however this plays out. However, we have grave concerns that the continued consolidation of the industry into fewer corporate hands may narrow the choices open to authors, harm their ability to sell their work, and diminish the diversity of viewpoints and the vibrancy so essential to the future of books.”