NEW YORK (AP) — The Justice Department’s effort to prevent the merger of Penguin Random House and Simon & Schuster isn’t just a demonstration for the Biden administration’s tough approach to corporate consolidation, it’s a rare moment for the publishing industry. in the dock.
During the first week of the expected two- to three-week trial in US District Court in Washington, top publishing executives at Penguin Random House, Simon & Schuster and elsewhere, with agents and writers such as Stephen King, have shared opinions, relieved have disclosed disappointments and financial data, otherwise they would have preferred to discuss privately or converse with journalists on background.
“I apologize for the sentimental language,” Penguin Random House CEO Marcus Dohle testified about correspondence displayed in court that showed tensions between him and other Penguin Random House executives. “These are private text messages for my closest associates in the company.”
The government is trying to demonstrate that the merger will result in less competition for bestselling authors, less progress and fewer books. The Justice Department argues that top publishers, including Hatchet, HarperCollins Publishers and Macmillan, already dominate the market for popular books and authors and have made it nearly impossible for any smaller publisher to break into it.
Penguin Random House and others argue that the market is dynamic and unpredictable, with competitors from university press to Amazon.com being able to create bestsellers.
Like any other self-contained community, book industry professionals speak in a kind of shorthand and follow customs that are intuitive to them and sometimes obscure to outsiders. US District Court Judge Florence Y. For PAN and the lawyers for each side, the trial has been in the form of a translation project.
It is also a chance to hear some of the industry leaders under oath.
The chairman and publisher of the William Morrow Group, Liet Stehlick, admitted that they only made a limited effort to get fiction by Dean Koontz published with Amazon.com, as their sales declined.
Award-winning author Andrew Solomon explained that he chose to publish his acclaimed “Nonday Demon” with Scribner, a Simon & Schuster imprint, because Scribner has the kind of sales and marketing resources that smaller companies lack.
Brian Tart, president and publisher of Penguin Books, agreed with the judge’s suggestion that the profit and loss assessments for potential book acquisitions are “truly spurious” and do not reflect actual costs. Tart also testified that he bid for Marie Kondo’s million-selling “The Life-Changing Magic of Tidying Up” because he “didn’t know what to make of it.”
Simon & Schuster CEO Jonathan Karp acknowledged that a popular industry term, “mid-list writer,” has long been associated with a broad and fearless core of non-commercial writers, a type of publishing middle class, essentially To be imaginary and a polite way of not labeling someone. A “low-list” writer.
When asked by the judge, Karp also said that while publishers value all the books they receive, books received for high advances – money guaranteed to the author no matter how the book is sold – need special attention. it occurs.
“If you really love the book, you have to jump through hoops,” he said.
Sometimes, terminology may be needed to comply with some common industry terms:
– To earn This is when a book sells well enough to recover the upfront payment and the author can begin collecting royalties, although some books may still make a profit for the publisher even if they are not earning. (Most new books, officials acknowledged, do not generate earnings.)
-Backlist. It refers to older books, an invaluable resource for publishers who rely on them as steady sources of revenue.
-Beauty contest. This is when two or more publishers are offering similar upfront and non-financial terms such as marketing skills or the appeal of working with a particular editor to determine who wins.
-10% topping. This means when an agent asks the publisher to not only match the highest competitive offer, but to add 10% more.
—All Access Books: As defined by Dohle, these are books so cheap, such as Amazon.com offers through its e-book subscription service Kindle Unlimited, that they can reduce prices and essentially , harms the industry by pushing the author.
Witnesses, from Dohle to Hachette Book Group CEO Michael Pietsch, spoke at length about their love for the business and what they said was the high mission of bringing ideas and stories to the public. But publishing is a profit-making business and even the most idealistic of writers and executives are mindful of the bottom line.
Via internal emails, statements, and both live and videotaped, the test has withheld internal rules and strategies regarding the acquisition and letdown of books when a desired book goes elsewhere.
At Simon & Schuster, editors must submit “justification” reports to senior management to receive approval for deals of $200,000 to $250,000 or more. The William Morrow Group, a HarperCollins division, numbers $350,000. Tart also required approval for deals worth $250,000 and more, while Dohle testified that he should sign deals worth $2 million or more.
Publishers love to share favorite takeover stories. Pietsch ranges from David Foster Wallace to Keith Richards. Edward Kennedy in Carp, D-Mass. and Bruce Springsteen.
But the trial has uncovered disappointments and missed opportunities – a source of “hanging humour,” as Tart put it. He passed on not only Kondo’s book but also Delia Owens’ blockbuster “Where the Crowds Sing.” In Hatchet, they keep a list of “The Ones That Got Away” deals for which the publisher bid $500,000 or more but still lost.
Karp testified that the famed neurosurgeon who was former President Donald Trump’s housing secretary, Simon & Schuster was ousted by Hatchett over a new book by Ben Carson. At one point, the Justice Department reported, citing internal emails, that Simon & Schuster had lost three bidding contests to Penguin Random House in the same week.
Karp also talked about a book he had acquired, a requisition work by a spiritual leader who had many followers.
“Unfortunately, his followers did not follow him to the bookstore,” Karp said.
AP Business Writer Marci Gordon in Washington contributed to this report.