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Home ENTERTAINMENT Paramount drops Simon & Schuster's proposed sale to Penguin Random House

Paramount drops Simon & Schuster’s proposed sale to Penguin Random House

Simon & Schuster’s corporate parent has officially finalized the deal for Penguin Random House to buy the publisher for $2.2 billion, a sale proposed by a federal judge. had blocked last month.

Paramount Global also announced Monday that it still plans to sell Simon & Schuster, a nearly century-old company where authors include Stephen King, Colleen Hoover and Bob Woodward. Simon & Schuster has had a strong 2022 so far, thanks in part to the sales successes of Hoover and King, who both opposed the merger and even tried on behalf of the government during last summer’s antitrust trial. Simon & Schuster is a division of CBS News’ parent company, Paramount Global.

“Simon & Schuster remains a secondary asset for Paramount, as determined in early 2020 when Paramount conducted a strategic review of its assets,” Paramount said in a statement. “Simon & Schuster is a very valuable business with a recent track record of strong performance, however it is not video-based and therefore does not fit strategically within Paramount’s broader portfolio.”

Penguin Random House owes a $200 million termination fee to Paramount, per the original terms of the deal. Penguin Random House, the country’s largest publisher, is owned by the German conglomerate Bertelsmann.

Other members of the so-called “Big Five” of book publishing, including Penguin Random House, Simon & Schuster, HarperCollins Publishing, Hachette Book Group and Macmillan, could now try to acquire Simon & Schuster. HarperCollins was among the losing bidders for Penguin Random House. During the trial, Hachette CEO Michael Pietsch also expressed interest in Simon & Schuster.


The Book Report: New Fiction and Nonfiction (November 13)

02:44

Opposition of the author’s voice

The CEO of the Authors Guild, which represents thousands of published writers, issued a statement saying the guild would oppose any merger between the Big Five.

“If HarperCollins or Hachette were allowed to buy out S&S, while the resulting company would not be as big as PRH and S&S combined, it would result in just four major publishers that regularly pay the kind of advances authors need to earn a living (plus or less) writing,” wrote the Guild’s Mary Rasenberger.

Penguin Random House had planned to appeal the decision and issued a statement Monday saying it remained convinced it would have been “the best home for Simon & Schuster employees and authors.”

“However, we have to accept Paramount’s decision not to proceed,” the publisher’s statement read.

The proposed merger of the two publishing giants, which would have resulted in by far the largest book publisher in US history, was first announced in late 2020.

But the Justice Department went head to head last year, claiming the new combination would stifle competition for best-selling books and result in fewer gains for authors. US District Judge Florence Y. Pan appeared to favor the government’s arguments during the three-week trial, rendering a decision in late October in which she agreed that the merger would harm book publishing.

Pan’s ruling was a break with decades of precedent, when numerous editorial mergers were allowed with little objection, and fits a broader pattern of the Biden administration’s efforts to more vigorously enforce antitrust law.

On Monday, Simon & Schuster CEO Jonathan Karp issued a company memo expressing optimism about the publisher’s future.

“We will celebrate our 100th anniversary in April 2024, regardless of who owns us, and we will have a lot to celebrate,” he wrote.

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