Stephen King going to bat for U.S. gov’t in case against book publishing mega-merger

Stephen King going to bat for U.S. gov't in case against book publishing mega-merger

WASHINGTON, Aug 1 (Reuters) – The U.S. Justice Department on Monday asked a federal judge to block a $2.2 billion merger between two of the “Big Five” book publishers, Penguin Random House and Simon & Schuster , in a trial that is expected to feature testimony from horror writer Stephen King.

“This is real money for real people,” said Justice Department attorney John Read.

Also on Monday, in the same federal courthouse in Washington, the Justice Department argued before a different judge that UnitedHealth Group (UNH.N) $8 billion deal to buy Change Healthcare (CHNG.O) should be stopped. Read more

Join now for FREE unlimited access to

In the publisher merger lawsuit, the government is focusing not on what consumers pay for books, but on advances paid to top performing authors, especially those who received $250,000 or more.

“Evidence will show that the proposed merger would likely result in the authors of the projected top-selling books receiving smaller advances, which means that authors who work for years on their manuscripts will be paid less for their efforts,” said the government said in a pre-trial brief.

The government also intends to show that the merging parties feared the deal was legal. He previously leaked an email sent by Simon & Schuster CEO Jonathan Karp, who wrote: “I’m pretty sure the Department of Justice wouldn’t allow Penguin Random House to buy us out, but that’s assuming we let’s still have a Department of Justice.”

King, author of “The Shining,” “Carrie” and other blockbusters, will testify for the government, alongside publishing executives and authors’ agents.

Hachette Book Group chief executive Michael Pietsch is due to testify on Monday, while King is expected to testify on Tuesday.

Penguin Random House, the largest book publisher in the United States, announced plans to buy rival Simon & Schuster in November 2020. Penguin Random House is owned by German media conglomerate Bertelsmann. (BTGGg.F). Simon & Schuster is owned by ViacomCBS, now Paramount Global (PARA.O). The Ministry of Justice filed its complaint in November 2021. read more

The defense, led by attorney Daniel Petrocelli, which defeated the Trump administration’s 2018 attempt to shut down AT&T Inc. (TN) to buy Time Warner, argued that the market for books, and for publishers to attract top-selling authors, is competitive and the merger will make it even more so.

The government is asking the court to block the merger “for less than 100 pounds a year”, Petrocelli said in his opening arguments, rejecting the idea that the biggest booksellers will be able to reduce the advances.

The publishers will argue that the evidence shows that, in auctions for potential bestsellers, Penguin Random House and Simon & Schuster “are seldom the two highest bidders”.

The top five publishers are Penguin Random House, HarperCollins, Macmillan, Simon & Schuster and Hachette, along with Walt Disney Co. (DIS.N) and Inc. (AMZN.O) also on the market. HarperCollins is owned by News Corp. (NWSA.O).

Judge Florence Pan of the U.S. District Court for the District of Columbia will decide whether the deal can go forward. The trial is expected to last two to three weeks.

Join now for FREE unlimited access to

Reporting by Diane Bartz and David Shepardson in Washington; Editing by Matthew Lewis and Mark Porter

Our standards: The Thomson Reuters Trust Principles.


Leave a Reply

Your email address will not be published.