Trade reacts to Penguin Random news

Trade reacts to Penguin Random news

Industry members have welcomed the confirmation this morning (1st July) of the Penguin Random House merger completion and the announcement of its new organisational structure, which sees Tom Weldon installed as chief executive of the UK business, Gail Rebuck made chair, and Ian Hudson as Weldon's deputy.

Jonathan Lloyd, chair of Curtis Brown, described it as "a dream team—a very well thought-out and, in the end, obvious management structure". He said: "There is none wiser than Gail, her appointment as chair will be seen as an important boost for the people in the group and for authors and agents. For the day-to-day running of the company, it is also obvious, both Tom [Weldon] and Ian [Hudson] are brilliant, hard-working people."

Waterstones m.d. James Daunt said: “Tom is an exceptional publisher; the two companies have extremely good people running them, but I think Tom is exceptional and has given great support to Waterstones. The way that Tom has run Penguin has been effective but thoughtful. He has taken a strategic view of where they should go, which is how you want to be running these companies . . . He is sensible and able to look forward and peer into this murky future that we have before us."

Foyle's c.e.o. Sam Husain said: “It doesn’t surprise me that Tom has taken on the top position and I am not surprised that Gail features in there either. I like Tom and both have been very supportive (towards high street book selling] with Gail heading the Books are My Bag Campaign. Both Tom and Gail have been in the industry for a long time and they both know what they are doing."
 
Helen Fraser, former Penguin m.d., said Weldon's appointment as c.e.o. was "wonderful news". She commented: "He'll bring his customary incisiveness, energy, thoughtfulness and strategic grip, which he has in spades. It makes me feel very positive about the future of Penguin Random House. When I heard the news [of the merger] originally, I felt a pang of sadness—it's such a wonderful company with a wonderful heritage. But with Tom as chief executive the things that are remarkable about Penguin will be preserved."
 
Lloyd said that while the merging of the two companies did diminish potential competition for book acquisitions, he was not concerned as "another opportunity always pops up". What particularly concerned him was that Penguin Random House's muscle should be directed at improving author earnings, he said: "It could take a lead in the industry by recognising royalties for e-books are iniquitous and not fair, and they should give a proper escalating royalty as they do for print books."

Lloyd also said: "The secret of running a big company is to behave as thought you are small—the basics of publishing are the picking of the right book and the right author, making it happen . . . One always hopes each side will learn from the other and recognise the strengths and weaknesses of each. They will evolve—they are all smart, intelligent people and will work out what's best."

Daunt said: "I would be surprised if there were any great immediate change in the short term. What they do need to do is use their combined resources to drive improvements in the back end of it all. I would expect the company to continue to innovate, especially in the digital sphere. Clearly there are going to be significant synergies, particularly in the supply chain and cost savings." He added that Penguin and Random House had both been “extraordinarily” supportive and “positive” towards Waterstones. “I think they understand what we are trying to do,” he said.
 
Tim Godfray, chief executive of the Booksellers Association, said the BA welcomed the merger and looked forward to working with the new team. "In America, Penguin and other leading publishers have been introducing new financial models to give physical bookshops greater support," he noted. "The BA hopes that the merger of these two great publishers will pave the way for similar opportunities here in the UK. We need new financial models that benefit both publishers and booksellers, in order to ensure that the UK has a diverse marketplace in the years ahead.”

Husain predicted that the merger would be "a good thing for the industry". He said: "I think it will bring efficiencies at the back office end, that would seem logical, and I would expect those cost savings to be passed on to retailers. Together the combined publishers will make about 25% market share of the industry—if it means they have more bargaining power that is no bad thing for the industry.

"They have always been very sympathetic to us and high street booksellers. Both Random House and Penguin have expressed great concern about the future of the high street and how bookshops are preserved and I would expect them to be supportive going forward. The fact that they have more power (as combined forces) means that perhaps they will take on other retailers and make sure there is more of a level playing field than there was before."
 
Husain added: "I certainly do not see the number of titles diminishing. If they say they are going to give their authors ‘unprecedented resources to reach global audiences’, if that is their plan, then the combined business will do more for authors and more for the industry as well. I only see it having a positive effect on publishing.”

Daunt added that he expected to see more mergers taking place in the industry. “If you have a strong player in the market, that is what tends to happen for the overall health of the market,” he said.

Toby Mundy, c.e.o. of Atlantic Books, said: "They are both very well run companies with a lots of good people, and I hope they now have enough scale to achieve what they want to achieve. They are in a position now with their size to affect the direction of the business. I hope this will give them more ability to stand up to financial pressures coming from other parts of the supply chain."

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