PRHSS or Whatever It Will Be Called
On the morning after Penguin Random House/Bertelsmann acquired Simon & Schuster from ViacomCBS for $2.175 billion, I tested my recollection of previous benchmarks in the history of all these great names in the publishing of books.
In 1965, RCA bought Random House from its founder Bennett Cerf, adding Alfred A. Knopf, Pantheon and Ballantine before unloading it in 1980 for $70 million around the same time, I am pretty sure, as the unraveling conglomerate sold Hertz Rent-A-Car. The buyer of Random House was Advance Publications, a multi-media company owned by the Newhouse family.
In 1998, the Newhouse’s sold Random House and its imprints to Bertelsmann, the large privately-owned German publisher (with a miserable record in Hitler’s Germany) for about $1.4 billion, it was reported.
Now, Bertelsmann has added Simon & Schuster to its massive portfolio. By any measure, this is a major development in the consolidation of book publishers at the very top level.
When I arrived at Random House as an editor in the mid-1980s, those of us in the trade book division considered S&S as our most formidable rival . We competed for big-time authors and had a reputation for glamorous parties and other perquisites of the New York publishing scene of the time.
S&S was also founded as a family business — crossword puzzle books were its first big success. In 1980, it was owned by the Gulf+Western conglomerate. ViacomCBS was apparently its seventh owner and deemed it extraneous to the company’s entertainment businesses.
Why go through all this?
Because this latest transaction has again ignited the concern, even the alarm, about the fate of publishing. Is it all about blockbuster bestsellers? Are smaller titles in decline? What now for authors and agents who rely on publishers for their incomes?
The answer, of course and predictably, is that time will tell. I do not intend to compete with the critics who now have the floor. But I do want to make the case that this process is not new and maybe not as dangerous to culture as it seems.
The swallowing of one brand by another is routine, even in this digital age. Ariana Huffington’s innovative website (which featured left-leaning essays by Nora Ephron and others early on) has just been merged with BuzzFeed and is controlled, I have lost track by AT&T, Verizon or maybe, Time Warner.
So, let me try to discuss without rancor or prejudice the elements and consequences of this development.
S&S in its current phase is very strong. The late Carolyn Reidy as CEO and the two leaders of the company now, Jonathan Karp and Dennis Eulau are superb professionals. I knew them in their previous time at Random House in the 1990s. They were among the best of the cohort of young colleagues there. I take some pride in having spotted them early.
CBSViacom, the late Sumner Redstone’s aggregation of businesses understood that S&S had some value, but not enough to make it worth holding on to when the emphasis is on streaming and screen time. The company is also selling its headquarters building. Bertelsmann, by contrast, is a book company and certainly did not acquire S&S to strip and sell as private equity outfits might have done.
Having watched from the middle distance the merger in the past decade of Viking, Penguin, Putnam, Doubleday, Bantam, Dell, Crown, Random House, Knopf and so forth under a corporate banner, the fact is they all are still around and contribute in keeping with their traditional legacies from the highest quality of literature to rank nonsense.
Authors and agents decry the power of the publishers to decide what to publish and how much to commit in advances and marketing. Over the years, particularly after proposals and manuscripts could be easily reproduced and circulated, the standard practice has become multiple, simultaneous submissions which usually lead to auctions with the book going to the high bidder.
The result, naturally, are commissions to the agents and bets by the publishers on which books would sell enough to be worthwhile. It is the agents’ role to earn for their clients and the publishers’ challenge to maintain cash flow that pleases their owners. Where you stand depends on where you sit.
Bertelsmann and its hundreds of imprints compete against each other in auctions. (I am fuzzy on the rules when it is just two imprints in the company bidding against each other.) Big bets, meaning six figure advances and more are common for authors of books thought to be commercial. That has been the case for decades.
But, but, but. The small publisher that I founded and ran independently for many years and is now owned by Hachette Book Group, PublicAffairs, has published over a thousand books of quality. My belief, shared by my successors, is not to buy books for sums which, if they underperform — as alas so many do — can undermine the company generally.
Hundreds of thousands of books are published in the United States every year. Smaller publishers with niche markets, university presses, digital-only publishers and self-publishing is an undeniably significant factor in publishing. Amazon, the behemoth of the retail universe, is also a publisher. Its impressive translation list, Crossings, has probably released more titles in its history than any other publisher. As far as I know, Crossing’s books are largely excluded from sales in bookstores which regard Amazon as an existential threat to their own futures
To be clear PRHSS is a an extremely big deal. Is it the end of publishing as we know it? History would suggest that books, the people who write them, the people who sell them and the people who read them will go on doing their jobs on a spectrum from very small to exceptionally large as they always have.