Judge Florence Pan of the US District Court in Washington, DC will hear approximately three weeks of oral arguments. The government says, in its preliminary report, that the combination of publishers “would further consolidate the largest publishing giant in the United States (and the world) and give the combined company control of nearly half of the market for expected top-selling books by authors”. The publishers say that “after the merger, the market dynamics will be exactly the same” and reject arguments that authors will suffer. “The closely watched case has significant implications for a publishing industry that has struggled with consolidation for years,” writes Publishers Weekly reporter Andrew Albanese. “It also looms as a key test for the administration amid growing calls for closer antitrust enforcement and in the wake of a tough 2018 defeat in its bid to block the massive $85 billion merger between AT&T and Time Warner.” they argue that the merger would be anti-competitive. But the government bears the burden of proof. “The suit will test whether the government can bring more antitrust cases targeting the effects of corporate concentration on how much workers — in this case, the authors of major books — are paid,” notes the NYT’s overview of the suit. The judge is expected to rule in November…
Further reading
Simon & Schuster (which, in full disclosure, was the publisher of my most recent book) is going to be sold by Paramount Global one way or another. Speculation abounds about potential private equity bidders. However, for now, the buyer is Penguin Random House, and S&S CEO Jonathan Karp (who previously spent 16 years at PRH) said in a recent memo to employees that “we and our authors will benefit greatly from becoming a part of this wonderful Publishing house.”
“Regardless of the outcome,” Karp wrote, there will be a new owner, and “the best and most important thing we can do is stay focused on achieving excellence on behalf of our authors and their books, with certainty of purpose us…” Joe Pompeo of Vanity Fair (whose book publisher is HarperCollins, which reportedly lost out in the competition for S&S) reports that “the witness list is a who’s who of publishing bosses, power brokers and writers,” including Stephen King… » “An appearance at some point by King, whose works are published by Simon & Schuster, would be a highly unusual and attention-grabbing test for an antitrust lawsuit,” AP’s Marcy Gordon writes in this the big explainer…» Another big antitrust trial is underway in DC on Monday: the government is also trying to block insurer UnitedHealth Group from buying Change Healthcare. “The cases represent a conscious strategy by the Justice Department to expand the boundaries of merger enforcement,” says the WSJ…
