Stephen King Testifies Against Book-Publishing Merger

From The Wall Street Journal:

Famed horror novelist Stephen King took the witness stand in a federal antitrust case on Tuesday, testifying that up-and-coming authors would be harmed if his longtime publisher Simon & Schuster is acquired by larger rival Penguin Random House.

“I came here because I think consolidation is bad for competition,” Mr. King said in a Washington, D.C., courtroom. “That’s my understanding of the book business, and I’ve been around it for 50 years,” he said.

The bestselling author said less-established writers are harmed by corporate consolidation in the industry. As publishers combine, “it becomes tougher and tougher for writers to find money to live on,” he said.

Mr. King’s testimony came on the second day of trial in the Justice Department’s lawsuit challenging Penguin Random House’s planned purchase of Simon & Schuster, a deal valued at more than $2 billion.

The trial is being closely watched by authors, literary agents and publishing-industry executives. Instead of arguing that the deal will increase book prices, the government has focused on author wages, saying writers of anticipated bestsellers likely will receive smaller upfront payments, or advances, if the deal is completed.

Penguin Random House and Simon & Schuster have defended the transaction as pro-competitive, saying that author advances won’t be lowered and that Simon & Schuster authors will benefit from access to Penguin Random House’s distribution channels and supply chain.

The German media company Bertelsmann SE, which owns Penguin Random House, agreed in November 2020 to buy Simon & Schuster from ViacomCBS.

. . .

Mr. King testified that he wasn’t reassured by Penguin Random House’s pledges that, if the merger is completed, imprints it owns will continue to compete against imprints owned by Simon & Schuster.

“It’s a little bit ridiculous,” Mr. King said. “You might as well say you’re going to have a husband and wife bidding against each other for the same house,” he said.

Link to the rest at The Wall Street Journal and thanks to S. for the tip

PG notes that Bertlesman is a very large media conglomerate which is owned and controlled by one very wealthy German family, both directly and via a family-controlled trust.

PG suggests that such ownership is usually not conducive to innovation, including lower prices.

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