M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Thursday, November 8, 2012

Attack of the Penguin?

The Authors Guild, for one, appears to be opposed to the recently announced Penguin-Random House merger:

“Survival of the largest appears to be the message here,” said Scott Turow, Authors Guild president. “Penguin Random House, our first mega-publisher, would have additional negotiating leverage with the bookselling giants, but that leverage would come at a high cost for the literary market and therefore for readers. There are already far too few publishers willing to invest in nonfiction authors, who may require years to research and write histories, biographies, and other works, and in novelists, who may need the help of a substantial publisher to effectively market their books to readers.”

Penguin and Random House are controlled by Pearson and Bertelsmann, respectively.  This combination is likely to raise antitrust concerns and that's the obvious target for the Authors Guild message.  Of course, consolidation in the book publishing industry is going to happen.  There's no standing against that wave.  This transaction, though, will present a good test for those who like to define markets.  On the one hand, the authors will argue that the market in question is the market for books.  Pearson and Bertelsmann will counter that the prevalence of iPad, tablets and eBooks makes a broader market definition a requirement.  They're likely to have the winning argument. 

-bjmq

http://lawprofessors.typepad.com/mergers/2012/11/attack-of-the-penguin.html

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Comments

My wife studied book arts and is having a hard time grasping that the publishing industry is diminishing. However, as a corporate lawyer mississauga, I kind of find these complexities to be a little more intriguing than sad. But I guess I won't bring that information to the dinner table.

Posted by: Pablo Von Trapp | Nov 13, 2012 3:56:37 PM

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