MONOPOLY CAPITALI$M
ViacomCBS sells Simon & Schuster to Pengiun Random House
ViacomCBS also said it will upgrade and rebrand its CBS All Access streaming service under the name Paramount+ next year. File Photo by John Angelillo/UPI | License Photo
Nov. 25 (UPI) -- ViacomCBS said Wednesday it has agreed to sell publisher Simon & Schuster to Penguin Random House for more than $2 billion.
ViacomCBS said the $2.175 billion sale came after "a highly competitive auction" for the publisher, which has been involved with works by Stephen King and presidential scholar Doris Kearns Goodwin, along with popular titles like The 7 Habits of Highly Effective People and Catch 22.
"This divesture follows a strategic review of non-core assets ViacomCBS undertook early in 2020," ViacomCBS said in a statement. "Proceeds from the transaction will be used to invest in ViacomCBS's strategic growth priorities, including in streaming, as well as to fund the dividend and pay down debt."
ViacomCBS said it will upgrade and rebrand its CBS All Access streaming service under the name Paramount+ next year.
"We've made the determination that Simon & Schuster is not a core asset of the company," ViacomCBS's CEO Bob Bakish said. "It is not video-based; it doesn't have significant connectivity to our broader business. At the same time, there's no question it's a marquee asset that's highly valuable."
The ViacomCBS portfolio includes the CBS network, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET and PlutoTV.
The deal is expected to be completed next year.
ViacomCBS also said it will upgrade and rebrand its CBS All Access streaming service under the name Paramount+ next year. File Photo by John Angelillo/UPI | License Photo
Nov. 25 (UPI) -- ViacomCBS said Wednesday it has agreed to sell publisher Simon & Schuster to Penguin Random House for more than $2 billion.
ViacomCBS said the $2.175 billion sale came after "a highly competitive auction" for the publisher, which has been involved with works by Stephen King and presidential scholar Doris Kearns Goodwin, along with popular titles like The 7 Habits of Highly Effective People and Catch 22.
"This divesture follows a strategic review of non-core assets ViacomCBS undertook early in 2020," ViacomCBS said in a statement. "Proceeds from the transaction will be used to invest in ViacomCBS's strategic growth priorities, including in streaming, as well as to fund the dividend and pay down debt."
ViacomCBS said it will upgrade and rebrand its CBS All Access streaming service under the name Paramount+ next year.
"We've made the determination that Simon & Schuster is not a core asset of the company," ViacomCBS's CEO Bob Bakish said. "It is not video-based; it doesn't have significant connectivity to our broader business. At the same time, there's no question it's a marquee asset that's highly valuable."
The ViacomCBS portfolio includes the CBS network, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET and PlutoTV.
The deal is expected to be completed next year.
By Douglas Busvine, Klaus Lauer
BERLIN (Reuters) - German media group Bertelsmann has agreed to purchase publisher Simon & Schuster for $2.175 billion (1.63 billion pounds) in cash from Viacom CBS, strengthening its presence in the United States.
Bertelsmann outbid Rupert Murdoch’s News Corp in a contest for the publisher of Dan Brown, Hillary Clinton and Stephen King which Viacom put on the block earlier this year.
The deal represents the second major move in CEO Thomas Rabe’s drive to consolidate Bertelsmann as the world’s biggest bookseller, after the 185-year-old publisher took full control of Penguin Random House less than a year ago.
“We are building our position as one of the leading creative content companies in the United States,” Rabe said on Wednesday of the move deeper into Bertelsmann’s second-largest market.
“I’m convinced that this a good day both for book publishing and for authors.”
The acquisition of Simon & Schuster, which reported revenue of $814 million in 2019, is profitable and employs 1,500 staff, is expected to close in 2021 subject to U.S. antitrust approval.
The merged entity would have a U.S. market share of less than 20%, making the transaction “approvable”, Rabe told reporters.
However, News Corp CEO Robert Thomson criticised the deal, which he said had an “anti-market logic”.
“Bertelsmann is not just buying a book publisher, but buying market dominance as a book behemoth. Distributors, retailers, authors and readers would be paying for this proposed deal for a very long time to come,” Thomson added.
TALKING BOOKS
Jonathan Karp and Dennis Eulau will stay on to run Simon & Schuster under the umbrella of the far larger Penguin Random House. Combining printing, sales and distribution would deliver significant synergies, Rabe said.
Pencils with the logo of German media group Bertelsmann CEO are seen at the annual news conference Berlin, Germany, March 22, 2016. REUTERS/Fabrizio Bensch
VIDEO REPORT https://www.reuters.com/video/?videoId=OVD62MXGF&jwsource=em
Size is important in publishing as bestseller lists become dominated by a handful of blockbusters - such as Penguin Random House’s edition of ex-U.S. President Barack Obama’s memoir ‘A Promised Land’.
But overall U.S. book sales have been growing by a mere 1% a year, according to the American Association of Publishers, as readers are distracted by social media and other online formats.
Rabe described books as the “past, present and future” of Bertelsmann but also highlighted the U.S. publishing deal’s significance for its digital content as people turn to e-books or listen to narrated ‘talking’ books.
Size is important in publishing as bestseller lists become dominated by a handful of blockbusters - such as Penguin Random House’s edition of ex-U.S. President Barack Obama’s memoir ‘A Promised Land’.
But overall U.S. book sales have been growing by a mere 1% a year, according to the American Association of Publishers, as readers are distracted by social media and other online formats.
Rabe described books as the “past, present and future” of Bertelsmann but also highlighted the U.S. publishing deal’s significance for its digital content as people turn to e-books or listen to narrated ‘talking’ books.
CASHING IN
Founded in 1835 as a publisher of theological texts, Bertelsmann is a private conglomerate spanning magazine, educational and music publishing and controls European TV group RTL.
Rabe is restructuring to reduce its exposure to declining areas such as printing, has merged its Arvato CRM customer services unit, and made a string of smaller technology bets.
The lack of its own public equity to serve as an acquisition ‘currency’ has constrained Bertelsmann’s ability to chase big deals, even as tech giants led by Facebook and Alphabet’s Google suck up more ad dollars.
Yet Rabe was able to pay cash after this year building a war chest of 4.3 billion euros ($5.1 billion) in liquid funds.
Rabe pulled this off by retrenching during the coronavirus crisis, and selling other investments and property. And, while Bertelsmann’s focus is mainly on organic growth, it has the capacity to do further deals, he added.
Viacom CBS, which was advised by LionTree Advisors and Shearman & Sterling LLP, said it would plough the sale proceeds into its streaming operations, fund its dividend and repay debt.
Writing by Douglas Busvine; Editing by Louise Heavens and Alexander Smith
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