With news that Random House and Penguin are merging, agents said that, despite what the move will mean for the industry, business moves ahead as usual. Last week, after the Financial Times broke word that the merger was a possibility, a number of agents told PW that having fewer big houses would be a negative, namely because less competition would result in smaller advances. Now, with a unified Penguin Random House expected to emerge by late 2013 (after the government has signed off on the deal), agents say that, despite the changes afoot, they will be approaching potential deals with both houses just as before.
"Frankly, there are hirings and firings constantly in this business, regardless of these massive forecasted changes," explained one agent. Although this agent noted that the shifts-to-come at both Random House and Penguin might make her think about taking certain projects elsewhere, publishers are, she said, constantly morphing and cutting back. "In situations where we have other players vying for a project, we will be taking this change into account when making decisions." Noting that an agent couldn't take two of the biggest houses off their list when selling projects, this agent added that her assumption is the merger will "more deeply impact Penguin than Random House... so I will probably make decisions based on that hunch."
Other agents noted that the goal is often to sell a project to an editor, and not a publisher. "Agents always prefer more competition to less. But in this rough market, I and my colleagues, I believe, have been submitting more narrowly anyway, so for us it’s really editor by editor," explained another agent.
Jason Ashlock, an agent and founder of Movable Type, who spoke on the record, said that it would be very difficult to ignore two of the biggest publishing houses when shopping a project. For now, Ashlock, like others, are betting on what this unified super-publisher might look like. "Though we can't and won't know how the two companies will structure their divisions once all is revealed next fall or winter, we can guess, and my bet is that the strength of the big divisions will remain. [In other words], I can see Penguin becoming two or three groups alongside Crown, Doubleday/Knopf, and Little Random. It's difficult to ignore Random House and Penguin when submitting a property."
Regardless of how Penguin Random House is actually structured, though, Ashlock said agents need to be focused on the bigger picture. The more important thing is "projecting what the landscape will look like in two years when all this shakes out. That's where agents have to put a lot of their thinking: as consolidations continue, it is not going to be a seller's market."
