Following the announcement that Penguin Random House parent company Bertelsmann won the bidding war for Simon & Schuster with a $2.2 billion offer, members of the book business and related organizations have begun to weigh in.
In a statement on Wednesday, the Authors Guild laid out its opposition to the proposed deal. The sale "would mean that the combined publishing house would account for approximately 50% of all trade books published, creating a huge imbalance in the U.S. publishing industry," the Guild said. (Penguin Random House's global CEO, Markus Dohle, told PW that he believes PRH's publishing market share is about 14.2% and S&S's 4.2%, including self-publishing; others have estimated the combined companies' market share would amount to roughly one third of the U.S. book market.)
Among the Guild's concerns are a decrease in competition among publishing houses once the Big Five become the Big Four, which, the organization asserted in its statement, would mean that, for authors, "there would be fewer competing bidders for their manuscripts, which would inevitably drive down advances offered." In addition, "less competition would make it even more difficult for agents and authors to negotiate for better deals, or for the Authors Guild to help secure changes to standard publishing contracts—because authors, even best-selling ones, wouldn’t have many options, making it harder to walk away," the statement read.
The Guild added: "The history of publishing consolidation has also taught us that authors are further hurt by such mergers due to editorial layoffs, canceling of contracts, a reduction in diversity among authors and ideas, a more conservative approach to risk-taking, and fewer imprints under which an author may publish. The Authors Guild calls on the Justice Department to challenge PRH’s purchase of S&S and refuse to allow even further consolidation of the U.S. book publishing industry."
In addition, American Booksellers Association CEO Allison Hill wrote a public letter decrying the move.
"The announcement today that Penguin Random House, the biggest of the 'Big 5' publishers, is buying Simon & Schuster is alarming," Hill wrote. "As the dominant player in the publishing industry, PRH’s purchase of another 'Big 5' publisher, further reducing the market to the 'Big 4,' will mean too much power over authors and readers in the hands of a single corporation." She added: "ABA will be calling on the Justice Department to challenge this deal and to ensure that no further consolidation of power be allowed in the U.S. book publishing industry."
Other institutions to publicly oppose the sale include the Open Markets Institute, whose executive director, Barry Lynn, issued a statement following the announcement that Hill quoted in her own letter. "Bertelsmann’s plan to take control of Simon & Schuster poses multiple dangers to American democracy and to the interests of America’s authors and readers," Lynn wrote. "By bringing three of the big six publishers under one roof, the deal will concentrate vastly too much power over the U.S. book market in the hands of a single, foreign-owned corporation." He added: "It will also threaten the ability of independent booksellers—who are already reeling from the COVID-19 pandemic and other pressures—to stay in business."
Reaction from the Association of American Literary Agents (formerly the AAR) was more muted than from the other organizations, and did not call for the Justice Department to look at the deal: "We have great respect for both PRH and S&S, both of which are fine companies composed of great imprints, and we wish them well however this plays out. However we have grave concerns that the continued consolidation of the industry into fewer corporate hands may narrow the choices open to authors, harm their ability to sell their work, and diminish the diversity of viewpoints and the vibrancy so essential to the future of books."
And then there was the comments from Robert Thomson, CEO of News Corp, whose HarperCollins subsidiary also bid for S&S. Thomson had previously said that if Bertelsmann acquired S&S it would create a “book behemoth” which should raise antitrust concerns. In his new comments, Thomson doubled down on is behemoth remark, but stopped short of calling for an investigation. "There is clearly no market logic to a bid of that size—only anti-market logic. Bertelsmann is not just buying a book publisher, but buying market dominance as a book behemoth. Distributors, retailers, authors, and readers would be paying for this proposed deal for a very long time to come,” Thomson said. “There will certainly be legal books written about this deal, though I wonder if Bertelsmann would publish them."
This story has been updated with further information.
