Simon & Schuster, which got its start in 1924 by publishing the first-ever crossword-puzzle book but has become home to 50 imprints and some of the world’s best-selling and most eminent authors, is up for sale.
“Simon & Schuster is not a core asset of the company,” ViacomCBS CEO Bob Bakish said during a live-streamed session at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco yesterday. “It is not video-based. It does not have significant connection for our broader business.” He also disclosed that he’s already received several unsolicited offers for the publisher he intends to pursue.
“The company will seek at least $1.2 billion for Simon & Schuster, according to a person familiar with the matter…. [It] will likely attract widespread interest since major publishing houses come on the market infrequently. ViacomCBS is seeking to sell Simon & Schuster to rival book publishing houses, the person said,” Jeffrey A. Trachtenberg and Benjamin Mullin write for The Wall Street Journal.
“Potential bidders include HarperCollins Publishers, which like The Wall Street Journal is owned by News Corp. ‘HarperCollins has been interested in gaining scale through organic growth and acquisitions of other companies,’ chief executive Brian Murray said in an interview. ‘Any time a publishing company is on the market, we’d like to take a look.’ One publishing executive who asked not to be identified said Lagardère MMB SCA’s Hachette Book Group is also likely to express interest,” Trachtenberg and Mullin add.
“The company now has 1,350 employees and publishes about 2,000 books a year. Its authors include Stephen King, Ursula K. Le Guin, Judy Blume, Annie Proulx, Bob Woodward, Walter Isaacson and Hillary Clinton,” Edmund Lee and Alexandra Alter report for The New York Times.
“ViacomCBS, the newly combined business controlled by Shari Redstone, is betting its future on streaming and sports content. Owning a major book publisher does not fit into those plans.
“A sale of Simon & Schuster, one of the five largest book publishers in the country, would shake up the publishing industry, which has become a winner-take-all business dominated by huge companies and brand-name authors” Lee and Alter add.
“Since Amazon emerged as the dominant bookseller, publishing houses have scrambled to preserve their influence in the market and there have been several consolidations. In December, Bertelsmann announced that it would pay $675 million for the remaining 25% stake in Penguin Random House from the British firm Pearson, which would make Bertelsmann the sole owner of the world’s largest book publishing operation. That deal is undergoing regulatory review,” Meg James writes for The Los Angeles Times.
“Bertelsmann’s move to own all of Penguin Random House came six years after it and Pearson stunned the industry by combining Penguin and Random House. That tie-up, which trimmed the Big Six to five, prompted others. Since 2013, Hachette Book Group has acquired several smaller firms, including Hyperion from Walt Disney Co., Minnesota-based Meadowbrook Press and the Perseus Books Group. In 2014, News Corp. acquired the romance novel giant Harlequin Enterprises, based in Toronto,” James adds.
“Simon & Schuster has been part of ViacomCBS’ predecessor companies since 1975. The publishing company was founded in 1924 by Richard Simon and M. Lincoln Schuster and went through numerous iterations before it was sold in 1975 to Gulf + Western, which was then the parent company of Paramount Pictures. Sumner Redstone’s Viacom took over Simon & Schuster as part of its 1994 acquisition of Paramount Communications. Simon & Schuster moved to CBS Corp. in 2006 when Viacom and CBS Corp. were split into two separate companies by Redstone (who acquired CBS in 2000),” Brian Steinberg recounts for Variety.
Bakish’s “presentation to the investors conference followed ViacomCBS last month, in its first earnings report since the recombination of Viacom and CBS Corp. in December, swinging to a quarterly loss that disappointed Wall Street, dragging its stock down 18% that day. Analysts have said the merged firm must prove it can grow despite continued cord-cutting and ratings challenges in the digital age due to the young target audiences of many of its cable networks,” Etan Vlessing writes for The Hollywood Reporter.
“Bakish during his Morgan Stanley conference presentation focused on touting synergies, cost savings and free cash flow generation to come from the recombination as he spoke against the background of market skepticism. ViacomCBS called the final quarter of 2019 a ‘transitional’ one, saying that it was affected by ‘operating items expected to be mitigated through the benefits of the combined company,’” Vlessing continues.
Among Simon & Schuster’s more-prestigious trove of imprints is Scribner, whose authors include Arthur Koestler, F. Scott Fitzgerald, Thomas Wolfe and Ernest Hemingway, author of “For Whom the Bell Tolls.”