The sale of Simon & Schuster to the owner of Penguin Random House has been blocked. The decision was made by a judge on Monday.
U.S. Circuit Court Judge Florence Y. Pan wrote in the decision:
Upon review of the extensive record and careful consideration of the parties’ arguments, the Court finds that the United States has shown that ‘the effect of [the proposed merger] may be substantially to lessen competition’ in the market for the U.S. publishing rights to anticipated top-selling books.
Penguin Random House said they would appeal and have called the decision a setback.
The $2.175 billion deal was revealed in November 2020 and was part of ViacomCBS’ effort to sell off assets that weren’t core to its streaming strategy. The plan was to sell Simon & Schuster to Bertelsmann, the owner of Penguin Random House. The US government filed a lawsuit in November of last year arguing the deal would give the two publishing houses too much influence and power over what is published and how much authors are paid. The combined companies would control close to half the market for acquisition of publishing rights.
Penguin Random House is the largest publisher in the United States. It has more than 90 imprints and releases about 2,000 books a year. If the merger happened, it’d have gained Simon & Schuster’s 30-plus imprints and its roughly 1,000 titles a year.
In our analysis, we questioned the impact of not just the acquisition of graphic novels and comics by the publishers but their distribution as well. Each has seen an influx of comic publishers as more have expanded their distribution choices or completely left Diamond Comic Distributors. The merger would have also shrunk the bookstore distribution for the comic market with an unknown impact.
Overall, this is a victory for the Biden administration which has made these types of challenges a priority.
Source: Graphic Policy
