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Today, notes on an antitrust lawsuit that hits close to home: Nearly two years ago, the D.O.J. sued to block Penguin Random House’s $2 billion deal for Simon & Schuster, which would turn the Big Five publishing houses into a Big Four. What the hell happened? And more importantly, would preventing a merger actually benefit writers? Herewith, a definitive breakdown of where things stand.
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| Way back in November 2020, a few weeks after Joe Biden defeated Donald Trump to become the 46th President of the United States, the company then known as ViacomCBS, and now known as Paramount Global, announced the sale of its profitable and respected book publishing business, Simon & Schuster, to Penguin Random House, the industry behemoth, for $2.175 billion. Although relatively small by current deal standards, the proposed acquisition had a huge impact in the book publishing industry since it would combine the largest trade book publisher, P.R.H., and the third-largest trade book publisher, S&S, into one company, further cementing P.R.H.’s industry dominance with revenues of the combined businesses expected to reach $3 billion.
Along with the usual commentary regarding his excitement about the deal, Markus Dohle, the C.E.O. of Penguin Random House., which is a wholly owned subsidiary of Bertelsmann AG, told Publishers Weekly, the industry bible, that he didn’t expect “any antitrust issues to arise,” adding it was “a good day for books, book publishing and reading.”
Well, here we are, some 18 months later, and the deal is probably no closer to closing. Biden’s Justice Department has decided to try to block the combination on antitrust grounds, with a trial scheduled to begin Monday, August 1 and to continue until Friday, August 19. The post-trial findings of fact and conclusions, plus the objections to them, bring the timing—at least at the moment—to late September 2022 and then, presumably, it will be for U.S. District Court judge Florence Pan, in the District of Columbia, to take it from there, with an expectation that she will rule on the matter before the end of the year... |
