Joseph Perry, Esq.
Judge Blocks Penguin Random House/S&S Merger
Yesterday, Judge Florence Pan blocked the merger between two of the biggest publishers in the world: Penguin Random House and Simon and Schuster.
In a brief two-page order, Judge Pan stated: "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. Accordingly, judgment shall be entered in favor of the Plaintiff and the merger shall be enjoined." The parties have until November 4th to make redactions to protect confidential information.
As expected, PRH disagreed with the outcome. In a brief statement, it said, among other things: "As we demonstrated throughout the trial, the Department of Justice’s focus on advances to the world’s best-paid authors instead of consumers or the intense competitiveness in the publishing sector runs contrary to its mission to ensure fair competition...We believe this merger will be pro-competitive, and we will continue to work closely with Paramount and Simon & Schuster on next steps."
On the other side, the DOJ praised the decision “Today’s decision protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas...The proposed merger would have reduced competition, decreased author compensation, diminished the breadth, depth, and diversity of our stories and ideas, and ultimately impoverished our democracy.”
For those that followed the trial, the outcome may not come as a shock, as Judge Pan repeatedly was skeptical of PRH's arguments. However, as an industry professional, it's still stunning to me to see the result in real time.