Stephen King testifies against publishing's biggest merger
Washington DC - The biggest antitrust trial to hit the publishing industry in recent memory kicked off this week, and on Tuesday writer Stephen King had his day in court.
Penguin Random House, the largest publisher in the US, entered a federal courthouse in Washington on Monday to defend its deal to acquire Simon & Schuster, the fourth largest, against a Department of Justice (DOJ) emboldened under US President Joe Biden to enforce antitrust laws aggressively.
If Judge Florence Pan rules in the publisher's favor, the merger would drastically change the publishing world, whittling down the number of major publishing houses, known as the Big Five, to four.
The question Pan is deciding is whether, as the DOJ argues, this will curtail competition and suppress book advances for high-earning authors.
Testifying for the government on Tuesday was Stephen King, one of the most successful and prominent novelists in the world.
Author of bestsellers including The Shining and The Stand, King has been publicly critical of the deal and openly objected to the involvement of his longtime publisher, Simon & Schuster.
"I came because I think that consolidation is bad for competition," King said Tuesday in front of a full courtroom (and an overflow room nearby). "That's my understanding of the book business. The more companies there are, the better it is."
Stephen King discusses the changes he's seen in the industry
During 45 minutes of testimony, King laid out the changes he's witnessed over a half-century career in collaboration with a number of different publishers. He described independent publishers becoming increasingly "squeezed" by conglomerates.
"The reason they're being squeezed is because they don't get the shelf space that they used to because the majors take a lot of that shelf space."
He described his early years with indie publishers as the glory days, recalling his phone ringing nonstop during auctions as his agent fielded offers from smaller publishers. But he eventually migrated to what's now become the Big Five because of their wider distribution networks and deeper pockets.
"I was able to pay the mortgage and I was able to put money away for the kids' education," said King.
"I didn't have to finance the car. As far as I was concerned, I was living the dream: I was writing full time. I enjoyed what I was doing. That was a big deal.... There comes a point where if you're very, very fortunate, you're able to stop following your bank account and start following your heart. And that's what I did. It was wonderful and it was great."
But most writers today aren't so fortunate. The average author only makes around $20,300, which is below the poverty line, said King, citing a 2018 Authors Guild survey. He put the blame for shrinking advances squarely on industry consolidation.
"There were literally hundreds of imprints and some of them were run by people who had extremely idiosyncratic tastes," he added. "Those businesses, one by one, were either subsumed by other publishers or they went out of business."
The dynamics, he argued, have reversed; big business isn't helping the next generation of Stephen Kings. "I think that it becomes tougher and tougher for writers to find enough money to live on."
Penguin seeks to acquire Simon & Schuster
The New York-based Simon & Schuster and Penguin Random House are among the largest publishing houses in the US, known in the publishing world as the Big Five.
Penguin Random House is the result of another megamerger, between Random House and Penguin, in 2013 (at which point the Big Six became the Big Five).
Penguin's roster of blockbuster authors, who generate enormous sales of "backlist" titles, includes John Grisham, Toni Morrison, Dan Brown, and former White House occupants Bill Clinton and Barack and Michelle Obama – all of whom have sold millions of copies worldwide.
Simon & Schuster has leaned in recent years toward big nonfiction, publishing heavyweight writers such as Bob Woodward and Hillary Clinton. If the merger goes through, the Big Five would shrink to the Big Four – one of them significantly larger than the rest.
In November 2020, Paramount Global (formerly known as ViacomCBS) announced it had agreed to sell Simon & Schuster to Bertelsmann's Penguin Random House for $2.18 billion.
Last fall, the DOJ sued to block the deal on the grounds that too much consolidation was bad for authors and, ultimately, for readers.
The government argues that the merger would reduce market competition and ultimately harm writers. If the deal goes through, the merged company would control nearly 50% of the bestseller market, which would ultimately result, the DOJ contends, in authors receiving smaller advances and worse contract deals.
Penguin and Simon & Schuster say, to the contrary, that the merger would bolster competition in the publishing industry and allow them to pay authors more.
Cover photo: Collage: REUTERS & JUSTIN SULLIVAN / GETTY IMAGES NORTH AMERICA / Getty Images via AFP