A Penguin-Random House Merger Is Scaring the Literary World
Publishing's Big Six might soon be consolidated to a Big Five. Representatives from Pearson have confirmed that they're in talks to sell Penguin to German media giant Bertelsmann, who would merge it with Random House. "The two companies have not reached agreement and there is no certainty that the discussions will lead to a transaction," Pearson revealed in a statement first lodged with the Financial Times, the newspaper it owns. "A further announcement will be made if and when appropriate." The news frightens industry professionals already battered by sweeping layoffs.
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Earlier this month, industry observers began speculating about the possibility of Pearson (a conglomerate that makes its bread and butter on education materials) getting rid of Penguin. Panmure analyst Alex DeGroote told The Guardian's Mark Sweney, "If they want to sell something non-core then selling Penguin is the obvious choice." Penguin was treated as sacrosanct under former CEO Dame Marjorie Scardino, but incoming chief executive John Fallon has been more open to restructuring. Many floated the possibility of News Corp's Rupert Murdoch placing the highest bid for Pearson's underperforming asset if Penguin came up for auction.
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Publishing professionals may be relieved to know that Murdoch isn't named in this statement on Penguin's future. But further consolidation of the publishing industry won't make anyone happy, especially following this week's round of Simon & Schuster lay-offs. The news has publishing professionals and book reviewers on Twitter so stunned that, aside from the few decrying more mergers, they're not yet sure what to think. Many minds have been blown. Some are frightened. And because it's Twitter, a few are laughing about what we would call the potential publishing house. This could be grim news for many employees, but it would be amazing to hear serious writers discuss their latest book from Random Penguin.
