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Paramount Scraps Proposed Sale Of Simon & Schuster To Penguin Random House

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Paramount Scraps Proposed Sale Of Simon & Schuster To Penguin Random House

Simon & Schuster's parent company has officially agreed to buy publisher Penguin Random House for $2.2 billion, a bid that a federal judge blocked last month.

On Monday, Paramount Global also announced plans to sell Simon & Schuster, the nearly century-old company owned by writers Stephen King , Colin Hoover and Bob Woodward. Simon & Schuster has had a strong 2022 so far thanks to bestsellers from Hoover and King, who opposed the merger and even testified for the government in an antitrust case last summer. Simon & Schuster is a division of Paramount Global, the parent company of CBS News.

"Simon & Schuster remains a non-core asset to Paramount, as determined in early 2020 when Paramount conducted a strategic review of its assets," Paramount said in a statement. "Simon & Schuster is a well-respected company with a strong track record of recent success, but is not video-based and therefore does not fit strategically with Paramount's broader portfolio."

Penguin Random House owes Paramount a $200 million termination fee under the original terms of the deal. Penguin Random House, the country's largest publisher, is owned by the German conglomerate Bertelsmann.

Other members of the so-called "Big Five" book publishers, including Penguin Random House, Simon & Schuster, HarperCollins Publishing, Hachette Book Group and Macmillan, may now be considering buying Simon & Schuster. HarperCollins was among the losers at Penguin Random House. During the process, Hachette CEO Michael Pitts also expressed interest in Simon & Schuster.

The chief executive of the Writers' Union, which represents thousands of published authors, issued a statement saying the society would oppose any merger between the Big Five.

"If HarperCollins or Hachette were allowed to buy S&S, the resulting company, while not as big as PRH and S&S, would still be just four major publishers paying authors the advances they (more or less) regularly need to make a living. get it by doing,” Guild member Mary Rasenberger writes.

Penguin Random House planned to appeal the decision and released a statement Monday saying it was confident it would be "the best home for Simon & Schuster employees and writers."

"However, we must accept Paramount's decision not to proceed," the publisher said in a statement.

In late 2020, a proposed merger between the two publishing giants was announced, which would result in the largest book publisher in US history to date.

But the Justice Department filed a lawsuit last year saying the new combination would stifle competition for bestsellers and reduce upfront payments for authors. U.S. District Judge Florence Y. Pan sided with the government in a three-week trial, ruling in late October that the merger would hurt book publishing.

The Pan decision was a break from previous decades, when multiple publishing mergers were allowed with little opposition, and is part of a broader effort by the Biden administration to more forcefully enforce antitrust laws.

On Monday, Simon & Schuster CEO Jonathan Karp released a memo expressing optimism about the future of publishing.

"We will celebrate our 100th anniversary in April 2024, whoever it is - and there will be a lot to celebrate," he wrote.

Paramount Drops plans to sell Simon & Schuster to rival Penguin Random House

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