Murdoch’s News Corp. bids for Simon & Schuster - BetaBoston

Jonathan Karp, who became the chief executive of Simon & Schuster in May, could be forced out or relagated to a lesser role if the publisher is acquired by a new owner.SIMON & SCHUSTER VIA THE NEW YORK TIMES/NYT

Rupert Murdoch’s News Corp. is making a play for Simon & Schuster, the venerable home to bestselling authors like Stephen King and Hillary Clinton that raised a ruckus this year after releasing a string of hit titles critical of President Trump.

The powerhouse publisher was put up for sale by its owner, ViacomCBS, in March, and the company has since fielded more than half a dozen inquiries, according to three people familiar with the process who declined to be named because the matter remains confidential.

In addition to News Corp., which already owns HarperCollins, a leading bidder is Penguin Random House, according to the people. Penguin Random House, the largest US book publisher, is owned by German media giant Bertelsmann. French firm Vivendi, a minority owner of Hachette through the publisher Lagardère, has also made a bid.

At least one of the offers has topped $1.7 billion, far above the minimum ViacomCBS had set, according to two of the people. Several financial firms, after lobbing offers below that range, are no longer in the running. Final bids are due before Thanksgiving, and ViacomCBS could announce a winner some time after that. A deal may not materialize.

ViacomCBS, the newly merged conglomerate led by Shari Redstone, declined to comment. News Corp. and Vivendi also had no comment. Bertelsmann would not address Simon & Schuster in particular, but a spokesman said, “We have stated in the past that Penguin Random House wants to grow organically and through M&A.” The Financial Times earlier reported on Bertelsmann’s interest; Publisher’s Weekly was the first to report on HarperCollins'.

Simon & Schuster, one of the five largest book publishers in the country, has a deep bench of name-brand writers, including children’s author Judy Blume, novelist Annie Proulx and journalist and historian Walter Isaacson. It also has several perennial bestsellers, including “Catch-22,” by Joseph Heller; “Gone With the Wind,” by Margaret Mitchell; and “How to Win Friends and Influence People,” by Dale Carnegie.

Publishing has become a winner-takes-all business, a circumstance brought on by Amazon’s aggressive pricing, and now a publisher needs size to survive. Tent-pole titles can better offset losses from weaker books. A bigger inventory can generate more data on the habits and interests of book buyers.

Those dynamics underpin the wave of consolidation that has swept the business in the past decade. Penguin and Random House merged, Hachette Book Group acquired Perseus Books, and News Corp. bought romance publisher Harlequin.

Trump, despite losing his campaign for a second presidential term, received more than 72 million votes and could field several big-dollar offers for a book. A deeper-pocketed Simon & Schuster could make a more competitive bid for a Trump book, according to two of the people.

The company has proved durable, even during the recent downturn. Simon & Schuster’s revenue rose 8 percent to $649 million this year through September. Profit before tax during the same period rose 6 percent to $115 million.

Should a major publisher win the auction, Simon & Schuster is likely to undergo staff cuts. Departments such as human resources and finance are often slimmed down after a big merger. It is not clear how a deal might affect high-level positions at the company. Jonathan Karp, who was named chief executive this year after the sudden death of Carolyn Reidy, could be relegated to a lower role or be forced out. Not long after he took over, Karp named Dana Canedy, a former journalist and administrator of the Pulitzer Prizes, as publisher of its namesake imprint, putting a Black woman in charge of one of the biggest publishing houses.

Any merger agreement would also have to undergo regulatory scrutiny. A combination with either Penguin Random House or HarperCollins, the two largest book publishers in the country, could raise questions in Washington. Penguin Random House’s sales exceeded $4 billion last year. Annual sales at HarperCollins, which reports its fiscal year at the end of June, were about $1.7 billion.

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Murdoch’s News Corp. bids for Simon & Schuster - BetaBoston
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