By Iqbal Hussain
Simon & Schuster is living its own story saga and we are yet to find out if it’s a fairy-tale or thriller. The publishing industry has been left with a huge shakeup recently as it was announced that Simon & Schuster, one of the top five publishing powerhouses, is to be sold to private equity firm KKR for £1.27bn.
That’s right, the publishing house has been a permanent fixture in the publishing industry with other big five members, which also include HarperCollins, Hachette, Penguin Random House and Macmillan Publishers.
The plot thickens as this story even has its own “will they or won’t they” dynamic. It was thought at one point that Paramount Global, the current owner of the publishing company, would sell to its direct competitor, Penguin Random House, but this move was blocked last year for competition reasons.
The concern was that this would create an even smaller market for writers to gain the opportunities they deserve and create an even bigger disruption in the market. Paramount Global has been trying to sell the company since 2020 to no avail, but finally, its prayers have been answered.
The company has been around in the States since 1924 and employs 1,600 people globally. Publishing works by writers such as Stephen King and Hillary Clinton, it is no wonder that it made its way to being one of the top publishers globally.
The new character who we are still unsure of in this story has its own vision as a kind of saviour. KKR’s plans at present seem simple, allowing the company to operate independently and use its digital book platform Overdrive to complement the mediums that Simon & Schuster can offer. They also have plans to create an “ownership culture” by providing colleagues shares in the firm.
What is scarier is what is happening behind the scenes to secure this deal, as KKR is an equity company that traditionally aims to get the highest return with the lowest possible risk. In this case, the majority of the £1.27bn will be borrowed against the company itself, leaving only a small amount of investment by KKR, thereby shielding its interests.
This, however, is not the first time they have done this. And it has led to some brutal results in the past. Even though readers may rejoice, there is still so much up in the air for what is a family name in the book industry. Will this be a rags-to-riches story of building yourself back up or a story of being at the top and losing it all? Only time will tell.