Paramount scraps Simon & Schuster’s proposed sale to Penguin Random House

Simon & Schuster’s corporate parent has officially ended the deal to buy publisher Penguin Random House for $2.2 billion, a proposed sale already a federal judge was blocked last month.

Paramount Global also announced Monday that it still plans to sell Simon & Schuster, the nearly century-old company that includes author Stephen King, Colleen Hoover and Bob Woodward. Simon & Schuster has had a strong 2022 so far, thanks to bestsellers by Hoover and King, who opposed the merger and even testified on behalf of the government during last summer’s antitrust trial . Simon & Schuster is a division of Paramount Global, the parent company of CBS News.

“Simon & Schuster remains a non-core asset for Paramount, as determined in early 2020 when Paramount conducted a strategic review of its assets,” Paramount said in a statement. “Simon & Schuster is a highly valued business with a record of strong recent performance, although it is not video-based and therefore does not fit strategically within Paramount’s broader portfolio.”

Penguin Random House owed Paramount a $200 million termination fee per the original terms of the settlement. Penguin Random House, the country’s largest publisher, is owned by the German conglomerate Bertelsmann.

Other members of book publishing’s so-called “Big Five” — including Penguin Random House, Simon & Schuster, HarperCollins Publishing, Hachette Book Group and Macmillan — may now be looking to acquire Simon & Schuster. HarperCollins was among the losing bidders for Penguin Random House. During the trial, Michael Piset, CEO of Hachette, also expressed interest in Simon & Schuster.

The Book Report: New Fiction and Nonfiction (November 13)


author protests

The CEO of the Authors Guild, which represents thousands of published authors, released a statement saying the guild would oppose any merger between the Big Five.

“If HarperCollins or Hachette were allowed to buy S&S, while the resulting company would not be as large as PRH and S&S combined, it would result in only four major publishers regularly paying advances that writers Surviving requires (more or less) writing,” wrote Guild’s Mary Rasenberger.

Penguin Random House had planned to appeal the decision, and issued a statement on Monday saying it was confident it would be “the best home for Simon & Schuster’s employees and writers.”

“However, we must accept Paramount’s decision to move forward,” the publisher’s statement read.

The proposed merger of the two publishing giants, which would result in the largest ever book publishing house in US history, was first announced in late 2020.

But the Justice Department sued last year, arguing that the new combination would reduce competition for best-selling books and lead to less progress for authors. US District Judge Florence Y. Pan sided with the government’s arguments during a 3-week trial and issued a decision in late October agreeing that the merger would harm book publishing.

Pan’s ruling was a break from decades of precedent, when many publishing mergers were allowed with little objection, and fit a larger pattern of the Biden administration’s efforts to more forcefully enforce antitrust laws.

On Monday, Simon & Schuster CEO Jonathan Karp released a company memo expressing optimism about the publisher’s future.

“We will celebrate our 100th anniversary in April of 2024, regardless of who owns us – and we will have much to celebrate,” he wrote.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button