Consolidation in tradpub continues.
https://www.publishersweekly.com/pw/...-sell-s-s.html
Quote:
Nearly three months to the day after the completion of the ViacomCBS merger, the mass media company has indicated its intentions to possibly sell Simon & Schuster, one of the U.S.'s Big Five publishers.
Word that ViacomCBS was looking to sell S&S came at a Morgan Stanley investor conference where ViacomCBS CEO Bob Bakish said the publishing house is not a core asset and that the company has received interest in the past from companies about buying S&S. Bakish said when the market stabilizes it will engage in the process of selling the company.
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Quote:
Simon & Schuster's place in ViacomCBS's otherwise film and television–focused portfolio was unclear from the jump, and speculation over the sale has spread in certain circles in the industry since the ViacomCBS merger was approved, let alone completed. Should S&S be sold to another of the Big Five, it would mark the second major merger of the U.S. publishing landscape's biggest publishers in less than a decade, following the merger of Penguin and Random House in 2013.
Some in the industry have guessed at potential buyers already. First among them is News Corp., the Rupert Murdoch-owned mass media and publishing company, which owns HarperCollins, another of the Big Five. HC has a history of making big acquisitions, having bought both Thomas Nelson (2012) and Harlequin (2014). News Corp. CEO Robert Thomson has supported the expansion of HC and HC CEO Brian Murray has said in the past that the company would consider another acquisition if the right deal came along.
Hachette Book Group parent company the Lagardère Group is another corporation that likes the book business. The company has supported a string of acquisitions by HBG, most recently the purchase of 1,200 children's book titles from Disney.
Should S&S be bought and merged with one of the Big Five, the resulting Big Four would only be more proof of consolidation in an industry that had a Big Six only eight years ago. Amazon's rising size as a publisher in its own right complicates the landscape somewhat as well.
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More at the source.
Also:
https://variety.com/2020/biz/news/vi...le-1203523803/
Quote:
iacomCBS CEO Bob Bakish told investors Wednesday that the company is taking a hard look at all operations. Simon & Schuster has generated inquiries from prospective buyers in the past, Bakish said during a Q&A held as part of Morgan Stanley’s annual investor conference in San Francisco.
Simon & Schuster “is not a core asset. It is not video-based. It does not have significant connection for our broader business,” Bakish said. “We have had multiple unsolicited inbound calls about that asset, and so as the market stabilizes, we are going to engage in a process” to examine strategic alternatives. ViacomCBS said publishing revenue in 2019 came to $814 million, down 1.3% from $825 million in the prior year.
Since merging in late 2019, ViacomCBS has examined whether all of its businesses fit well as the company places more emphasis on streaming video and reaching TV viewers in new ways. Already, the company is working to sell Black Rock, the Eero Saarien-designed skyscraper that served as headquarters to CBS Corp. since opening in 1965. Baskish said the company is in talks with “a set of blue-chip buyers who are engaged in the process,” which he expects to wrap this year. Research firm MoffettNathanson has pegged the value of Simon & Schuster at $1 billion to $1.5 billion
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Via:
https://the-digital-reader.com/2020/...s-up-for-sale/
Quote:
This does not come as a surprise. Simon and Schuster is not technically the smallest of the "Big Five" US trade publishers, but it is the most vulnerable. The other four are either significantly larger in their own right or part of larger international publishing conglomerates (Macmillan is owned by Holtzbrink, Hachette is owned by Legardere Publishing, HarperCollins is twice the size of S&S, and PRH is PRH).
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Two things come to mind:
First, ViacomCBS is late to the streaming game and it is rushing to reduce its lag behind the leaders, NETFLIX, WARNERMEDIA, AMAZON, and DISNEY. They are even behind laggard NBCUniversal, who are at least launching their streaming strategy next month.
So far Viacom has bought and expanded Pluto, talked vaguely of expanding its limited CBS ALL-ACCESS (3 Million subscriptions, a tenth of Disney's Hulu and a fifth of DISNEY+ five day launch tally), and hinted of maybe doing a combined service. Real. Soon. Now.
Whatever they do is going to cost big money. Or they're going to have to sell out to somebody with big bucks. Speculation has named Google, Amazon, even Apple. For now, selling non-core assets raises cash to retire a bit of debt (it's big) or fund enough new content for a year of their streaming services. Assuming they find a buyer willing to give them a billion. No sure thing.
Second, S&S isn't bringing in much cash these days, generating but 3% of ViacomCBS revenues and much less of net. So cashing it in while it might still fetch some cash to help with their streaming challenge.
Worst case scenario, getting rid of non-video assets and reducing debt would make them more attractive to a buyer down the road. The streaming game is getting very pricey. WARNERMEDIA is looking to spend $4B over the next two years, Netflix has a $16B pipeline in place, and PRIME spent a billion just for the rights to the TOLKIEN series, with another billion budgeted for production.
If ViacomCBS wants to play in that league, they can't afford to hang on to unproductive assets.
Also, S&S is the last big Manhattan publisher still owned by an American conglomerate.
The rest of the big american companies sold out long ago, Disney most recently. Warner before that.