News Corp. agreed late last week to acquire the Hearst Book Group from the Hearst Corp. for an undisclosed price. The Hearst book units, William Morrow and Avon Books, will be integrated into News's HarperCollins publishing subsidiary and will form the nation's second largest trade publisher with worldwide revenues of more than $900 million. The deal, which must still be approved by the government, is expected to close in July.
The acquisition marks a remarkable about-face by News chairman Rupert Murdoch regarding Harper, which, as recently as two years ago, was considered likely to be sold. In a statement, Murdoch observed, "We have orchestrated a significant turnaround at HarperCollins over the last few years and are well positioned to take the next step -- to build an even stronger, more vital and profitable publishing company." HC president Jane Friedman told PW she was grateful for the "stamp of approval from News" that the purchase of Morrow and Avon represents.
Friedman said that it was too early to say how the Morrow and Avon imprints will be integrated into HC, although she noted that "our strengths mesh well." The merger will unite two of the country's largest children's publishers, and the addition of Avon will give a boost to HC's mass market paperback efforts. Friedman also noted that Morrow has a "very strong general publishing list that will work well with our publishing program." She said she intends to continue, and even expand, Hearst's branded publishing program.
The sale to HC represents the end of the rebuilding process of its trade book group by Hearst that began five years ago, following the failed sale of the book group to Putnam Berkley (News, Mar. 7, 1994). Frank Bennack Jr., president of Hearst, said, "Although our book publishing companies have made significant progress in recent years, we've known for some time that the Hearst Book Group had to expand by acquisition, seek a merger partner or divest, as we have done here." The Hearst Book Group had estimated sales in 1998 of about $210 million.
Paul Aiken, executive director of the Authors Guild, commented, "We're glad to see that HarperCollins now finds itself in robust health, but the acquisition of an important house is cause for concern in a highly consolidated industry."
Jean Naggar, president of the Association of Authors' Representatives, said the impact on authors and agents would depend on what kind of consolidation took place, "but it looks as if it's a further shrinkage of the market." She added, "They often announce their intentions not to change things, but somehow it always seems to happen in the end."
"Obviously, it's a matter of concern, particularly to those authors and agents with books at Morrow and Avon, whose editors are likely to bear the brunt of it," she said. Naggar noted that after the previous efforts to sell the Hearst book group, there had been a "temporary lull, and it had looked for a while as if it could fly on its own, so this is a big disappointment." She also observed that during such upheavals, "editors become concerned and disturbed, and that slows down everything."
Friedman tried to reassure authors and agents that the merger will benefit the industry by noting that the purchase "will give us the strength and size to publish books even better than we do now."
