On November 21st, it was announced that Paramount Global had chosen not extend their agreement with Penguin Random House to acquire their subsidiary company Simon & Schuster. The purchase was terminated and Penguin Random House is now liable to pay a $200 million cancellation fee to Paramount Global.
In November last year, the U.S. Justice Department blocked Penguin Random House from purchasing Simon & Schuster for $2.175 billion arguing it would harm other authors. The New York publishing industry is currently dominated by the “big five” that frequently lands their authors the best selling spots.
After the merger was blocked, Penguin Random House attempted to overturn it with an appeal, which would have required Paramount Global to extend the purchase agreement. Paramount Global refused and therefore voided the acquisition. With the dissolution of the deal, Penguin was forced to pay a $200 million termination fee to Paramount.
It is likely that Paramount Global will continue to pursue selling Simon & Schuster in 2023 nonetheless, with a price that will reflect the company’s recent increase in performance. In 2022, Simon & Schuster’s profits were up 29% in comparison to 2021, having published bestsellers such as Jeanette McCurdy’s I’m Glad My Mom Died and the works of Colleen Hoover including It Starts With Us, the much anticipated prequel to the TikTok sensation It Ends With Us.
Previously the CEO of Simon & Schuster, Jonathan Karp, rejected the idea that the merger would have a negative impact on the competition of manuscript acquisition, arguing that the two companies would still compete for manuscripts.
Penguin’s owner, the German media conglomerate Bertelsmann, is not looking to appeal the US judge’s ruling that would have been illegal due to the impact it would have had on author’s pay. But the company did say in a statement on November 21st that they would continue to “advance the growth of its global book publishing business without the previously planned merger”.
This outcome also comes at a time the when the administration of US President Joe Biden voiced its intention to tackle monopoly positions, citing them as to blame for a number incredibly high prices on products such as meat and concert tickets.
Author Stephen King, who despite publishing his novels with Simon & Schuster, vocally voiced his disapproval at the merger. King highlighted that it is becoming more difficult for writers to make money, and that the merger would only pose further hardships for new writers. For many, the termination of the deal will be received with a sigh of relief.
Words by Georgia McInnes
Want more Books content from The Indiependent? Click here!
Support The Indiependent
We’re trying to raise £200 a month to help cover our operational costs. This includes our ‘Writer of the Month’ awards, where we recognise the amazing work produced by our contributor team. If you’ve enjoyed reading our site, we’d really appreciate it if you could donate to The Indiependent. Whether you can give £1 or £10, you’d be making a huge difference to our small team.