Who Shall Live and Who Shall Die: What the Random/Penguin Merger Means to You
If you’re an author or agent wondering if it will be harder or easier to sell your work; if you’re an employee of either company wondering about job security; if you’re a bookstore owner or librarian wondering about the supply of product; or if you’re simply a book lover – you’ll want to know how the merger of Random House and Penguin, announced this morning, impacts on your life. As a veteran of far too many mergers and acquisitions I can give you some sense of what’s going to happen and when.
Over the next few months – and it could be as long as a year – little or nothing will occur that anyone can see. That is because executives will be reviewing the vast and complex structures of their respective firms looking for redundancies that can be eliminated or operated more efficiently. Printers, warehouses, and a host of departments ranging from editorial to marketing, sales, publicity and accounting will be scrutinized for unnecessary duplications. The redundancies will be earmarked for elimination or consolidation.
Though it’s clear that merger discussions have been under way for some time, it’s still a long way from the exchange of stock or cash to the shutdown of an imprint or issuance of a pink slip to a sales rep. Even after redundancies have been pinpointed, the implementation of consolidations will not happen rapidly. Negotiations must take place before departments are closed and people let go. Those decisions will be delegated to middle management executives who will be consulted but who themselves may be candidates for elimination.
Because publishing is still a people business, those negotiations will be arduous and painful. And therefore the only immediate effects of the merger will be anxiety and confusion, and there will be plenty of that. Tons of time will be occupied by speculation and gossip, and there will be a great deal of maneuvering as employees try to position themselves to look indispensable and their bosses strive to save jobs. Decision-making will be hampered in a climate of uncertainty and even paranoia as editors and managers wonder if they will be second-guessed or overruled from on high by superiors privy to some secret plan.
Though those superiors may seem like a monolithic autocracy, in fact top brass at both companies will be jockeying for position and struggling for power and control. No one wants to put out on the street friends, colleagues and employees who have labored loyally for years or even decades; no one wants to serve notice to suppliers, distributors or service providers that, in the terrifyingly bland language of bosses the world over, “We have decided to go in another direction” or “Your services are no longer required” or “Your department is redundant.” So, though it may not be visible, there will be plenty of infighting on a high level, and it will eventually filter down to a human scale. But this will take time.
When it does happen, in my experience the last people to get the ax are authors. That is not necessarily because the management of publishing companies is compassionate (though I believe it is). It’s because management is mindful (thank God) that the whole apparatus of the publishing industry is fed by authors, and there is great reluctance to slaughter the geese that lay the eggs. There is also the question of shelf space. Though the two companies have a number of science fiction and romance imprints between them, for instance, closing one of them could remove critical advantages in shelf space for which publishers fight tooth and nail. When that space is given up, competitive publishers are ready to rush in to fill it, and once lost it cannot easily be regained. So, in the next, say, six months to two years or longer we will see mergers of every process and function except editorial.
In time, however, the grim reaper (old-timers referred to him as The Turk) will aim his scythe at editors, imprints and lists. Authors will then realize that where there were three or four markets there are now two or one. Aside from the human toll, injury to literature itself will be inflicted as the Darwinian struggle rewards the most commercial authors and makes it even harder for newcomers to gain a toehold. And that in turn will fuel the self-publication and alternate-publishing trend that is already well under way. The e-book and print on demand businesses, already prospering from that trend, will continue to thrive.
This is what I believe is in the cards for you. As a scarred veteran of hundreds of mergers and acquisitions I think I can make these predictions with confidence. But I also make them with a heavy heart, for the road to Random/Penguin is littered with victims too numerous to list. For some sense of the relentless march of the consolidation you can read Book Pubs Headed for the Chop-Shop?
Or if you’re from the Grin and Bear It School of Adversity, you might be interested in a bit of doggerel I contributed to the 1986 year-end issue of Publishers Weekly entitled Merger, He Wrote. Here’s an excerpt:
Thus in frenzied syncopation
Proceeds the trade’s consolidation.
Scores of famous names of yore
Have since succumbed to corporate war
Or publish books with but a semblance
Of their former independence:
Coward, Crowell, Playboy, Grosset,
Dutton, Scribner, Morrow, Fawcett,
Prentice-Hall and Dial and Dell,
Random, Bantam, NAL,
Lothrop, John Day, Quick Fox, Jove,
Lippincott, Pop Libe, and Grove,
Bobbs and World and Atheneum . . .
There’s no end to our Te Deum.
Huge conglomerates expanding
Till scarcely anyone’s left standing.