AALA Survey Finds Literary Agents Strongly Against Penguin Random House’s Plan to Acquire Simon and Schuster
August 17, 2022
For Immediate Release
As the case of U.S. v. Bertelsmann draws into the third and likely final week, nearly nine out of ten literary agents say they oppose Penguin Random House’s plan to acquire Simon & Schuster, citing concerns over diminished bargaining power with an outsized publisher, fewer imprints to place their authors’ books, and the negative effects of further consolidation.
The Association of American Literary Agents conducted the online anonymous survey of members from August 11, 2022 to August 16, 2022. “ Amidst all of this coverage, we are keen to understand what our members think about the case and what implications the eventual ruling might have for our authors and our roles as literary agents,” says Jennifer Weltz, AALA’s president.
In the five days the survey has been active, 87.6% of respondents report being against Penguin Random House’s bid for Simon and Schuster, with 4.1% supporting the acquisition. The remaining 8.3% express mixed feelings.
“Less competition” and “lower advances’ are the most frequently cited concerns. “It’s crucial to
keep the number of significant bidders from dropping below the current level,” says one agent. “The big 5 are already extremely restrictive (and opaque) in their rules regarding submissions between editors and imprints. PRH and S&S merging would limit the amount of reputable imprints a project could be submitted to, and lower the chances of auctions or competitive buying situations,” says another. Summing up the skepticism about assurances that PRH and S&S will continue to bid against each other, a respondent states, “The promise of a CEO, one that cannot be legally upheld, means nothing.”
Many respondents expect their bargaining power will weaken. Not only do they predict monetary advances to go down, but it will be “harder to have leverage in negotiations” on everything from rights to royalty percentages to payout schedules. Multiple agents point to PRH’s insistence on payout in four or more installments while the company reported record profits as an example of “PRH’s sweeping mandate,” “rigidity” and “throwing its weight around even more.”
Respondents point to the potential harmful effect on mid-list and marginalized authors. “This trial has focused exclusively on bestselling novels, when the midlist is so much more expansive and the typical author’s experience is certainly not a $100,000 ‘low’ advance in any genre or
category,” says one agent. Says another, “I am less concerned with competition among high six and seven figure auctions, and more concerned about how this would likely drive competition for and among profitable mid-list authors way down.” An author looking for a new home with a major player may find editors reluctant to poach from an in-house division is one example given. Agents aiming to bring a more diverse pool of authors to the big publishers consider this to be an “diversity and inclusivity issue.”
Not all respondents are against the acquisition. Those who support combining the two publishers into one consider PRH to be the best buyer. “S&S is for sale no matter who buys them. Better an established publisher with systems and distribution in place than a sale to a hedge fund or non-publishing entity who can potentially sell off assets and cause a venerable and profitable publishing house to disappear,” says one respondent. The recent sale of Houghton Mifflin Harcourt is brought up by another respondent as an example of what can happen. “I don’t want S&S to be sold to private equity or a company that doesn’t understand publishing (see: HMH). And I don’t want S&S to be absorbed into a big house just for the backlist (also see: HMH). If PRH will truly let S&S operate independently, I don’t hate it. I still don’t like it though.” This mixed feeling is expressed by many who support the acquisition or remain neutral. “We’re between a rock and a hard place” is the prevailing sentiment. As a respondent points out, “Penguin and Random House already compete against each other. Why would it be different to add S&S? Maybe I’m just looking at it through rose-colored glasses.”
The survey was conducted while the agent community followed the trial closely. The focus of the testimonies on top sellers drew frustration and questions. “The issues being discussed at trial, about ‘anticipated topsellers’ don’t even remotely get at the fundamental issues that make this acquisition worth discussing. Trial is a waste of taxpayers’ money.” Still others believe the trial reflected poorly on the industry as “a declaration that this is a market only suitable for ‘big’ books” and “those at the very top of book publishing are in a bubble.” The coverage of the trial converted some who were on the fence. “I think the arguments that have been put forward by people in favor of the merger have been wildly unconvincing and have relied on a lot of sleight of hand about the dynamics of auctions, pre-empts, etc., and the leverage of agents. I have become more adamantly anti-acquisition over the course of the trial.”
About the Association of American Literary Agents
Since its founding in 1991, the Association of American Literary Agents has been a leading force in furthering the interests of agents, authors, and other rights holders. Through regular educational programming, community-building initiatives, and advocating for agents and authors alike, the volunteer-run organization is dedicated to helping our members maintain and broaden their professional skills in a fast-changing publishing environment. Recognizing the historically
exclusive nature of publishing, AALA is committed to engendering a more diverse, equitable, participatory and inclusive publishing community. Members of AALA must agree to adhere to its widely-respected Canon of Ethics, thus ensuring that our membership maintains the highest standards of ethics and integrity in dealings with and on behalf of our clients and our publishing colleagues.
Name: Jennifer Weltz, President Email: firstname.lastname@example.org