PRH merger: media round-up

PRH merger: media round-up

The Penguin and Random House merger completed yesterday (1st July) has attracted widespread media coverage, with many reports focusing on the fact the combination has created “the biggest book publisher in the world".
 
The Financial Times said the new Penguin Random House would generate around €3bn in revenue and publish around a quarter of the world’s English language titles. The newspaper is owned by Pearson, which owns 47% of the new publisher while Bertlesmann owns 53%. In a brief interview with the FT, Markus Dohle, the new chief executive of Penguin Random House, said Random House’s position in Latin America and Penguin’s in India and China meant the new company represented “the model of a truly global book publisher”. He added that the company aimed to “help sustain the physical market and to further develop and expand digital retail” in the face of growing competition from online retailers such as Amazon and Apple.

Much of the media coverage has focused on the merger as a bolstering of power between the publishers in the face of the growing market influence of giant technology companies. The Telegraph said: “The merger comes at a critical time for the companies, as well as for the wider book publishing industry which spent most of the last decade in major turmoil, as new online businesses like Amazon, Google and Apple tried to stake their claims on their traditional business . . .

"Pearson and Bertelsmann hope that joining forces will give their publishing assets the scale they need to compete with the growing challenges to their business, by catapulting them ahead of rival Hachette to become the biggest publisher in the world.”

The Independent focused on the fact
that Penguin Random House’s headquarters will move from London to New York and that former Random House UK boss Dame Gail Rebuck will “step back from the day-to-day running of the company” and chair the business.
 
Meanwhile the Wall Street Journal reported
that the “shakeout . . .  in management so far has been relatively modest”, noting that David Shanks had lost his former job as the chief executive of Penguin USA but will serve as senior executive advisor to Dohle and the executive US team. It quoted global spokesman for Penguin Random House, Stuart Applebaum, as saying that “Mr. Dohle is expected to spend the next three weeks on the road, hosting a series of town-hall meetings for staffers.”

An article in Forbes magazine said one of the things to “watch out” for in the merger aftermath was staff redundancies. “Both companies have large finance, legal, human resources and other back-office departments. While a merger doesn’t mean that an entire side’s accounting department will be let go, but the new company probably won’t have need for everyone in it and, of course, there can only be one person in charge,” it said.