Opposition grows to proposed Penguin Random House merger with Simon & Schuster

“A vibrant democracy needs more editorial diversity,” writes Ron Charles about the potential adverse effects of a PRH/S&S merger (Photo: LinkedIn)

Since the announcement last November that Bertelsemann-owned multinational publisher Penguin Random House had entered into an agreement to purchase rival multinational Simon & Schuster for a reported $2.75 billion USD, various voices have risen in opposition to the proposed deal on both sides of the 49th parallel.

One of the first out of the gate was Ron Charles, writing for the Washington Post. In a column dated November 25, 2020 – the same day the PRH/S&S merger was announced – Charles wrote that “the proposed consolidation of the publishing business is bad for authors, bad for readers, and bad for American culture.” Calling the 2013 merger of Penguin and Random House “ill-conceived,” Charles argues that the publishing behemoth is already outsized and that any further conglomeration will result in fewer options for authors and an increased market domination by tentpole and other blockbuster titles.

But Charles goes even further, arguing that the merger would be detrimental to American democracy itself. “A vibrant democracy needs more editorial diversity representing a broader range of tastes and interests,” he writes. It’s similar to the argument Dennis Johnson, publisher of U.S. independent press Melville House, makes in The Atlantic. Johnson, whose press is distributed by Random House, argues that the larger a house becomes, the more risk-averse it becomes; it would not be a stretch, Johnson contends, to imagine a financially conservative PRH/S&S being hesitant about greenlighting books such as Too Much and Never Enough by Mary Trump or Disloyal by Michael Cohen, the first published and the second distributed by S&S. Johnson goes on to predict layoffs at S&S should the deal go through and speculates that “we could be witnessing democracy getting injured in real time.”

In Canada, the Association of Canadian Publishers called for the department of Canadian heritage to review the acquisition to ensure it abides by the government’s “net benefit” standard for such mergers, arguing the deal will harm Canadian independent publishers. “ACP calls on the Government of Canada and Minister of Canadian Heritage Steven Guilbeault to use the policy tools they have available to support an ecosystem that will allow Canadian writing to flourish,” the group wrote in November.

Canadian opponents of the deal relying on the net benefit argument face an uphill battle given the government’s reluctance to interfere in previous mergers affecting the publishing and bookselling sectors. They did not act in 2013 to challenge the merger of the Canadian branches of PRH and Penguin, nor – much more egregiously – did they intervene to prevent the absorption, in 2011, of iconic Canadian publisher McClelland & Stewart (once literally branded “the Canadian publishers”) as an imprint of Random House. And the government remained silent at the turn of the millennium when Indigo Books & Music merged with big-box competitor Chapters to create a single major national book retail chain.

Writing in the Toronto Star, ACP executive director Kate Edwards warns that continued indifference from Canadian heritage with regard to the PRH/S&S merger will further imperil Canadian publishing: “The surrender of our publishing landscape pushes important Canadian voices to the margins. Small and medium-sized Canadian houses publish the majority of Canadian authors, including those from BIPOC and other marginalized communities and those telling local stories. To continue that work, they need conditions that allow them an appreciable footprint in the marketplace.”

Former M&S editor and publisher of Key Porter Books Anna Porter echoed Edwards’s concerns in the Globe and Mail, where she wrote that a combined PRH/S&S “would dominate the Canadian market in a way that has so far not been possible. Authors would have fewer options for publishing their books, jobs will be lost – and with those lost jobs, there will be less diversity of interest in subjects and literary tastes.”

This is of pressing concern for independent, small, and regional Canadian presses, which remain on the vanguard of discovering and nurturing new talent. It is the small presses that take the risk on new or innovative writers who the multinationals then lure away with offers of large advances and greater marketing clout. Examples of recent successful PRHC authors who came up through independent Canadian presses include Cherie Dimaline, Billy-Ray Belcourt, Souvankahm Thammavongsa, and Ian Williams. Should the independent publishing sector in Canada – already underfunded and incapable of reaching the same levels of advertising or market penetration as the multinationals – lose any more ground, they may not be around to discover the next wave of Canadian literary stars.

“Most people’s first publication in Canada is on the independent, Canadian-owned side of the industry,” John Degen, executive director of The Writers’ Union of Canada, told Quill & Quire. “It’s a pretty delicate ecosystem and we want to make sure that everyone is competitive.”

It seems clear that the market dominance of a combined PRH/S&S would pose an existential threat to small presses on both sides of the border. While it has been argued that the merger is an attempt by the multinationals to build a bulkhead against what they see as their own most significant adversary – not smaller houses, but Amazon – this doesn’t appear reasonable: even the combined punch of two out of the U.S. big five couldn’t put a dent in Amazon’s stranglehold on the online book retail market or persuade the retailer to offer more favourable terms. So the question must then be asked: If the merger doesn’t benefit independent publishers, writers, readers, or even, in some respects, PRH and S&S themselves, whom does it benefit?

Opposition grows to proposed Penguin Random House merger with Simon & Schuster