In the beginning there were lots and lots of publishers. Then along came a lot of things, and mergers, and niches, and publishing became Big Business. And as everyone knew, bigger was better, so larger companies bought out smaller ones, sometimes keeping the original editors (DAW books under Donald A. Wolheim for example), sometimes just holding onto the name and the genre. By 2000 there were the Big Seven, plus Baen, university presses, and a few tiny super-specialty presses that were labors of love, like David R. Godine books and similar. Then along came e-books, and things got complicated.
As mergers and shifts from “publishers who love books” to “publishers who read” to “MBAs who look only at numbers” combined with the Clintonian paper-cost increase and the unexpected results of Thor Power Tools and so on, more publishers consolidated until only six remained (not counting the e-book retailers such as B&N, iBooks, Kobo/Rakuten, and Amazon). Penguin, Random House, Simon and Schuster, HarperCollins, Hachette, and Macmillan. This is when I entered the scene. Borders was still limping along, but Walden Books and B.Dalton were circling the drain. Hastings Books and Records did well in a regional market.
Then along came another shake out, and to make a long soap opera short, Random House bought out Penguin. There were jokes about the new name (Random Penguin? Penguin House?), and dark mutters about monopolies and German ownership of global publishing and so on. So we had the Big Five. Skipping over the mess with Simon&Schuster vs. Barnes &Noble over end-cap space and other things, most of us not in the traditionally published world (aside perhaps from Baen) ignored that part of the business. We had other things to do.
I was over at The Passive Voice, and discovered that something I’d sort of followed about the Big Six, er Five had bubbled back to life.
Last year, Simon and Schuster started making noises to Random House Penguin. Random House proposed buying out Simon and Schuster (which one suspects has not really recovered from the mess with Barnes and Noble, and what it did to S&S’s midlist authors) for $$$$$. This brought in attention from the US Government because it would reduce the number of major publishers in the US to four, and give RHP-S&S the lion’s share of the US market. Back in October of 2022, the feds sued to stop the merger, and were successful.
Last week, the private equity firm KKR bought Simon and Schuster from Paramount for $1.62 billion. I thought I’d heard the name KKR before, and it turns out I had. Not in a good way. They were one of the private equity groups that would buy a functioning company, load it with debt, let it deteriorate, and then bail out after basically destroying the asset. Yes, it is far more complicated than that, but that was the sense I had from other media reports.
I have no idea what this means in the long run. I need to do some digging and see what imprints are owned by Simon and Schuster, and what their markets are. I do know that when I see “private equity” and “buy out” I tend to assume the worst. It’s probably not fair, but so goes it. My feeling is that the authors and editors are probably safe through the end of the calendar year, since KKR is new to the publishing business and messing with sales during the back-to-school and holiday book-buying seasons would be a bad financial idea. Some rumors already say that KKR will cut the New York City office space to reduce expenses, and probably trim editorial staff. They will probably guard the backlist, since that is where a lot of Simon and Schuster’s income is generated. Beyond that? Who knows.
Image Credit: A really traditionally published manuscript! Author photo, Vienna, June 2019.
Mad Genius Club 
16 responses to “And Then There Were Four? The Latest Trad-Pub News – Alma T. C. Boykin”
Since Simon & Schuster distribute Baen, this could be interesting.
Also, I looked up Thor and no shock, that’s a Warren Court decision. I’m beginning to understand why the man is universally despised.
among the sane
Warren’s good historical rep is entirely due to the various civil rights cases that he presided over. And even then, too many of them got good results with bad legal reasoning.
Oh, dear.
They have the Halo books, and the Star Trek ones, as well.
Yes, “the ‘unexpected’ results of Thor Power Tools,” that everyone capable of reasoning from A to B to C could have told them about….
List of their divisions and imprints: https://about.simonandschuster.biz/divisions-and-imprints/
Nothing’s jumping out at me as looking familiar, beyond S&S itself and maybe Scribner.
They seem to be the current publishers for Raggedy Ann, Hardy Boys, and Nancy Dress. They published Star Trek tie-in novels back in the day; I think the severing of Paramount and CBS put paid to that already.
I have a bad feeling about this …
As soon as I saw “S&S”, I thought “Baen.” S&S tolerates Baen despite their extreme un-woke-ness, because they make money. KKR may not care.
Baen needs S&S for printing and distribution of conventional books. E-books don’t need much in the way of capital equipment. Pure speculation here (not a lawyer or accountant), but …
One way this could shake out is that KKR/S&S cuts Baen loose, and Baen becomes an entirely e-Book publisher, perhaps with (comparatively expensive) print-on-demand as an option. Another way–KKR might wind up with the legal right to the name “Baen.” They could keep the name (to sink it) and fire the staff. Perhaps the staff then reorganizes as the publisher “Weisskopf” or something like that. Probably, again, as e-Books and/or print-on-demand, but not traditional mass-production printing.
I would buy from Weisskopf publishing
It would depend on the exact relationship between Baen and S&S. If Baen contracts with S&S for printing and distribution, then the terms of the contract might be changed [cue Darth Vader discusses contract law]. If S&S owns Baen, then … Problems might really ensue.
It would not surprise me if Baen is/has been looking into other options for print distribution. After the spat between B&N and S&S, that’s something I’d probably start doing, but I’m a wee bit paranoid.
https://www.bloomberg.com/news/articles/2023-08-07/jefferies-leads-1-billion-loan-for-kkr-s-simon-schuster-deal
On further investigation, it’s a standard (for KKR) leveraged buyout using roughly $1 billion in high-interest debt (rated “five levels below investment grade”, says the article) and presumably the other $600 million or so in cash. The way these things work, KKR will get a lot of that $600M back in the next few years through various fees, bonuses, preferred stock sales, etc. The debt probably won’t collapse S&S until after KKR gets most of their cash back. If S&S survives and pays off (most of) the debt, then KKR can sell them to someone else for maybe $2 billion, which is a nice 900% return on their (guessing here) $200 million they’re actually risking. And if four out of five companies in such deals fail, KKR still winds up with a 100% profit counting all five deals. Great for KKR. Not so great for employees at the four companies that were doing fine until they got hit by the KKR tornado.
Am I cynical to suspect that this sort of thing would have been made unprofitable a long time ago if KKR and its ilk weren’t cutting lawmakers in on the deals?
Not so great for employees at the four companies that were doing fine until they got hit by the KKR tornado.
If they were doing fine, the company wouldn’t be up for sale.
Am I bad for sitting here munching popcorn and chanting “FAFO, FAFO!!!!” at the prospect of Simon Und Schuster being sold to Wall Street pirates? Pillage and burn, baby!
I’ve got a big bag saved up for when Random Penguin slips beneath the waves. They f-ed around, they found out.
Speaking as an author, the Big Five/Four/Three? publishers have presided over the complete destruction of “author” as a way of making a living. Latest numbers are the average income of a successful dead-tree author is $8k/year. At $40 a case that’s barely beer money and a couple of family dinners out per month.
Speaking as a -reader-, the Bigs have presided over nothing less than the destruction of my reading hobby. I simply don’t read anymore. Now I write. Not for money, but so I can have a story that suits me. I am literally forced by the publishing industry to do it myself.
Which is why authors are making $8K/year, and why S&S is being pillaged by pirates.
This is really good popcorn. [munch]
As far as fiction goes, I suspect you are not alone. For nonfiction … To me it’s more complicated, but I have a foot in that world on the academic side, so I’m biased.
Funny you should mention non-fiction:
https://thepostmillennial.com/amazon-bans-scott-adams-for-life-ahead-of-new-book-launch?utm_campaign=64483
Scott Addams, cancelled by his dead-tree publisher, goes to release a book on Amazon. Is then BANNED FOR LIFE!!!11! by Kindle, can’t get a human being on the phone, his lawyer can’t either. And today mysteriously un-banned, no explanation. “Sorry, just kidding, as you were.”
I noted the “cancelled by publisher” part and the “Amazon ignored him until it hit the newspapers” part as well, two separate “failure to honor contract because politics” events.
I’m left praying for an asteroid here. Can’t they -all- be nuked from orbit?
Apparently, Addams himself tracked this down, and it looks like it could also have been malicious incompetence. From his Tweet in the article: “Looks like a leftover placeholder from the publisher who canceled me and returned all of the rights to me. That might be the problem, maybe not. I can’t get an answer.”
They re-instated him–personally I think it was confusion over the rights to the book in question, which was under contract to a publisher that canceled the contract due to Adams getting accused of racism. There was already a pre-order page for the publisher-published edition, so I’m not surprised that when Adams tried to self-publish it triggered multiple alarms that KDP’s (not great) customer service was incapable of handling until upper level management involvement was triggered (probably by social media attention).