Eight months after it was first announced, the merger between Penguin and Random House closed today with the make-up of its senior UK management team announced. As widely expected Penguin's youthful chief executive Tom Weldon is given the top job, and emerges as chief executive of Penguin Random House UK. Ian Hudson will be his deputy, and in addition will become chief executive of the international businesses outside of the US. Gail Rebuck will be chair of the UK group, but relinquishes her role as chief executive of Random House UK—she does however join the global board of Penguin Random House, one of only two women on the nine-strong board.
The new leadership has the continuity of the old, but with Weldon taking the helm offers the promise of change. I don't mention age flippantly: Weldon and Hudson are the same age. When Weldon was made incoming chief executive of Penguin UK, his predecessor Helen Fraser said she had been preparing Weldon to step into her shoes since she first brought him to Wm Heinemann from the Macmillan graduate training scheme 20 years ago. At that time, she added: "My senior team are all in their forties, and I feel they need the kind of run I have been lucky enough to have, in order to shape Penguin for the future." She said Weldon would be "the first publisher c.e.o. of Penguin".
In a profile with The Bookseller in 2011, Weldon commented: "Clearly this is a generational change and Penguin is the first place to do it."
Rebuck will play a key role in the future of this business, with group chief executive Markus Dohle publicly acknowledging her stewardship of Random House during its most successful recent period, and of course after Transword and Random House merged in the late 1990s. In his letter to staff, Dohle said Rebuck would "act as a global publishing advisor, and will continue to work closely with the many authors she has supported throughout their careers, as well as attracting new talent to the UK group". As Jonathan Lloyd, chair of Curtis Brown, said today, "there is none wiser than Gail". But this looks to be an advisory role. Weldon reports to Dohle; Hudson to Weldon.
This was all hinted at last week. In an interview on Radio 4's "Woman's Hour" , Rebuck spoke about how she threw herself into work following the death of her husband Philip Gould in 2011, but said that now, 18 months on, she was thinking about how best to channel her energies. She said: "I think as I'm now 18 months away it's time for reassessment, of thinking about—and I used to talk to Philip a lot about this—how I channel my energies, what I really care about. I'm passionate about reading, long-form reading, I'm passionate about literacy, and I'm passionate about my authors, so I look at the opportunities ahead and I genuinely see them as limitless."
Weldon now finds himself running a business more than twice the size he is used to, located in three different head offices, with different cultures in each—and in Markus Dohle, a new boss.
The popular view of Penguin is that it no longer feels like a publisher; its focus is on brands, intellectual property and digital. It sees its competition not as Hachette, HarperCollins, or Macmillan, but Disney, Sky and the BBC. Weldon is an innovator, not unlike Allen Lane before him. Yet Penguin is also seen as more risky, more creatively managed than its new best friend. Weldon is an enthusiastic gambler, and this manifests itself in his approach. Before his joined Penguin in 1997, Weldon turned down a lucractive offer to remain at Reed Books (later sold to Random House): a high stakes gamble that has now clearly paid off.
Random House, by contrast, is more corporate, presided over and tightly controlled by the leadership team of Rebuck and Hudson. Perhaps it mimics its parent, though there are suggestions that this is Rebuck's stamp. One agent told me that when Gail says 'jump' the entire Random House management team jump as one; when Weldon says 'jump', everyone does so, but not necessarily in unison. Yet under Rebuck, Transworld has kept its unique focus, operating independently (albeit within limits) from the other side of London.
Random House is also strong on innovation: its publishing of Fifty Shades broke the mould (Penguin aped the strategy with Sylvia Day), while its author portal, and its digital experiments, such as Black Crown, demonstrate a strong commitment to developing its future publishing and IP. Financially prudent, the EL James books have given it leeway to extend itself.
Random House is also the bigger, both in the UK and internationally, and last year was more profitable. RH's global sales in 2012 were £1.5bn to Penguin's £1.1bn. In terms of size the two UK businesses are broadly complementary. Random is much bigger in fiction; Penguin much bigger in kids. Random's market share is 16% through Nielsen, compared with Penguin's 11%. Penguin's UK accounts (not including Dorling Kindersley) show sales of £167m; Random House's 2011 accounts record sales of £227m.
If prior to the merger closing there ever felt like an imbalance between the two groups, Weldon's appointment redresses that. In the US, there are not such balms; Dohle carries on as chief executive of the expanded US arm, Madeline McIntosh, formerly chief operating officer of Random House, moves up to be president and chief operating officer of Penguin Random House in the US. Penguin US boss David Shanks steps down, and becomes senior executive advisor to Dohle.
Back in the UK, Weldon's task will be to bring this all together under one cohesive creative management structure, while also identifying and preparing for the challenges of the future. We'll find out more about that in the weeks and months ahead. But the overwhelming sense I get is that he is the right man, in the right job, at the right time. And he is in the right place. "I like working for a large company, I like the scale," he told The Bookseller in 2011. And here the generational thing seems important again. Some publishing chief executives give the impression of wishing the digital revolution would stop. They stomach it, but the old days were better. Weldon never gives that impression. As he said in that same interview: "I like change".