CLASH–BUT NO MERGER–OF THE TITANS

The pending merger between Simon and Schuster and Penguin Random House, a further consolidation of media, seemed almost inevitable a month ago.  Then A federal district court in the D.C. Circuit announced it viewed the deal as an antitrust violation and vowed to block any agreement between the two publishing houses’ parent companies.  

The Authors Guild welcomed the news that Paramount Global and Bertelsmann Group, which owns Penguin, had taken the offer to buy Simon and Schuster, off the table. 

“We will oppose any mergers among the ‘Big Five’ in the future,” said Mary Rasenberger, CEO of the Authors Guild.  the nation’s oldest and largest nonprofit advocacy group for published authors and journalists, 

“As the court’s analysis in the PRH lawsuit makes clear, the market for anticipated top-selling books is already highly concentrated. If either HarperCollins or Hachette were allowed to buy S&S, while the resulting company would not be as big as PRH and S&S combined, it would result in only four major publishers that regularly pay the kind of advances authors need to sustain a living (more or less) writing. It means there would be less competition for manuscripts, and it also makes it that much more difficult for small publishers to compete. A healthy publishing ecosystem is one that has many publishers of different sizes with different tastes, interests, views, and degrees of risk they are willing to assume. The bigger any of the Big Five is, the harder it is for the smaller and newer publishers to compete.”

With five corporations controlling over 90 percent of media in this country, newspapers, TV, radio, and publishing houses, the implications for further consolidations hang over our heads.

As the Author Guild’s statement further states, “The court’s 80-page opinion analyzed the market for anticipated top-selling books to conclude that the 49 percent market share for potential top-sellers that the merger would give the combined entity was excessive and would leave that market with too little competition. In turn, it would make it extremely difficult for smaller publishers to compete with the resulting Big Four in bids to acquire anticipated bestsellers and less likely for authors to receive competing bids, which lead to higher advances. The court also expressed concern that leaving control of 91 percent of the market in the hands of four publishers would increase the likelihood of coordination among the remaining big publishers, further shutting out competition and hurting author advances. The court’s emphasis of this point casts doubt on whether mergers among any of the Big Five will pass antitrust scrutiny.”

The Authors Guild, the National Writers Union, and many other organizations of writer advocates has made clear that they will continue to oppose concentrations of market power in the publishing industry and ancillary industries that employ creative labor. Without stronger antitrust legislation and enforcement of current law, we lose economic power in the marketplace and are reduced to fighting over scraps.

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