The court case regarding the potential merger of mega-publishers Simon & Schuster (S&S) and Penguin Random House (PRH) is providing plenty of interest for industry figures in Australia. The American Department of Justice is attempting to halt the merger in court, arguing the joining of these two giants would be detrimental to competition and cut authors’ earnings even further. Hardie Grant publishing boss Sandy Grant told Crikey the whole saga is a fascinating insight into how publishers think.
Simon & Schuster CEO Jonathan Karp’s testimony under the sharp and forensic questioning of Judge Florence Y Pan was particularly illuminating. Under Pan’s examination, Karp gave answers around profit and marketing that Grant described as “about as tortured as Alex Jones trying to explain his text messages“.
Karp attempted the slightly circuitous route of contending the merger won’t affect the advances or marketing support an author will receive. An illustrative moment of his vacillating between arguing one point and then having to concede the several examples that go against it came after he argued that publishers sometimes “don’t even know how much we’ve spent on the books”. Pan interjected:
If you pay a lot for a book, like one of these million-dollar books that you’ve been chasing for 10 years, you’re not going to market that harder than another book? You’re not going to get it reviewed, you’re not going to create a buzz about that book?
Karp: We have to market those books quite arduously, definitely.
Pan: And more than your run-of-the-mill book because you’re not getting a reviewer for every one of your books.
Karp: You have to pick your shots, that’s definitely true … the big obvious books that we spent a lot of money for, they definitely have to be marketed and publicised aggressively, although sometimes we’re paying that kind of money because the author takes care a lot of that.
Pan: I’m sure they’re expecting from you a high level of attention.
Pan summed it up fairly pungently: “It does seem that throughout this trial, there’s this sort of sense — competition raises advance levels, less competition lowers them, and that’s consistent with the idea that anytime there’s a competitive situation, whether it’s a round robin or any other type, you’re going to try harder because you might have to bid more in order to win, because more people are in it, the bids are probably going to be higher.”
Meanwhile, a star witness against the merger is horror legend Stephen King, who was uncharacteristically terse, calling the argument that PRH and S&S would still bid against one another after the merger “a little bit ridiculous”.
“You might as well say you’re going to have a husband and wife bidding against each other for the same house,” said King.
The trial is only in its first week of a potential three, so we’re sure we’re going to get plenty more intrigue and faintly horrifying details — such as the fact that S&S made a “mid-six-figure offer” for a book by neurosurgeon turned Trump lickspittle Ben Carson about “his experiences in the Trump administration and his thoughts on race”, but was outbid by Hachette.
Beyond all this, Grant says the merger could have a huge impact on publishing in Australia: “It has the potential to punch a big hole in Australian publishing. Penguin has really backed out of publishing Australian authors; they seem to think the less they do in this market the more profitable they become.”
