When word of a possible merger of Random House and Penguin first appeared, Rupert Murdoch's NewsCorp was lingering there on the sidelines.
NewsCorp already owns HarperCollins, so it wasn't as if they had no experience in book publishing. What the Murdoch clan wanted, and what Bertelsmann wanted, was to create an enormous publishing firm that might out-compete the competition.
Bigger is always better, unless you're creating your behemoth with debt financing. In which case you end up like Barry O'Callaghan, with his educational publishing conglomerate severely reduced and the good people at Houghton Mifflin Harcourt left reeling.
But not to worry.
As Mr. O'Callaghan knew so well, there's plenty of fish in the sea.
NewsCorp has its acquisition eye on Simon & Schuster.
The publishing house is part of the CBS family, which is just like any other big corporation. If the price is right, they're selling off components.
For NewsCorp, the price must also be right. They'd be investing in an industry that isn't demonstrating big growth. It's an industry that's facing the new medium of digital publishing, where the future direction isn't clearly marked.
By combining HarperCollins and S&S, NewsCorp could cut costs by....yes, you guessed it!...realizing synergies. Cut the employees, cut expenses, and profits are boosted.
It's no sure thing that the Random House - Penguin merger will be approved by government regulators who may not be so keen to help firms realize synergies when unemployment is already high.
So it won't be an easy matter for NewsCorp to buy up Simon & Schuster without the anti-trust crew probing the deal. Approval is no sure thing.
Beyond the loss of jobs, however, is the loss of variety. Fewer and fewer options would remain as the big houses join forces and shrink overhead. Fewer imprints, fewer chances taken on unknown authors showing talent that is not guaranteed to sell in blockbuster units.
The deals are good for the stockholders. Is there any benefit to anyone else? Anyone?
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