There's More Than One Fish In The Sea

The state of California believes that the merger of Harcourt with Houghton Mifflin-Riverdeep has reduced competition. They'd like to see an end to it.

Seems a bit late, but California is suing to untie the bonds that Barry O'Callaghan fashioned out of yards and yards of debt. The lawsuit is filled with the usual complaints of prices being driven up because HMH would be the possessor of over half the nation's supply of educational publishing materials. They claim that the value of the goods would decline, since there'd be no incentive for HMH-Riverdeep to do a good job.

The Feds already looked at the merger and let it go through, because competition was seen from Pearson and McGraw-Hill. If HMH lets things slide, the logic goes, there's two other textbook publishers hot on their heels.

With California so deeply in debt, you'd think they should have more to worry about than the off-chance that HMH will be producing the one and only version of some textbook that the state's school board must have or go without.

In essence, that is the basis of their lawsuit. Maybe, just maybe, Pearson and McGraw-Hill won't have what California school children need. And maybe, just maybe, neither publisher would sink the money into production to meet that need, even though it would be worth millions in sales.

Textbook publishers create textbooks that fill the specific needs of a specific school board, goes the lawsuit. It's not as if Pearson could run off a social studies text for seventh-graders and find a customer in California as well as Michigan and New Hampshire. Because of this tailored fit, it's expensive to make textbooks and only a big, rich publisher could do it.

Look at Kansas. They wanted science texts that omitted evolution. Such a book would be cheap to produce, of course, since most of science is based on evolution and without covering the topic, there'd be few pages between the covers. No other state school board would want such a thing. So if HMH were pursuing business in Kansas, they'd write up the special book, and have to charge more to recoup costs, leaving Kansas with no other choice since no one else would want their business.

If there's so much prestige in gaining state business as the lawsuit claims, why would the likes of Pearson or McGraw Hill choose not to participate, as the suit also claims? Is Barry O'Callaghan's little whale-swallowing minnow that fearsome of a competitor?

The California school board could just buy textbooks that have been approved by other school boards in other states, thereby negating the effect of customizing. Such a simple solution appears not to have occurred to them.

Far easier to weave imaginary Hollywood doomsday scenarios and take HMH-Riverdeep to court, in the hope of squeezing some concessions out of the educational publishing firm. Just in case someone at HMH was thinking about setting a price for next year's textbook order, keep that lawsuit in mind...and tack on a generous discount.