After the fireworks of the morning opening on Wednesday, when Judge Florence Pan thoroughly disallowed Penguin Random House’s models of the extra money they say they will make after the merger — and share with authors — as being “unverified and unverifiable” the rest of day was a far more plodding parsing of the defense economics expert, Dr. Edward Snyder. His cross-examination continued Thursday morning, also included in this post. The DOJ will bring back their expert Dr. Nicholas Hill for rebuttal, and then the testimony will be complete. Closing arguments will be presented Friday, on schedule. Once again, Judge […]
The Efficiencies Papers
Further to our report from Wednesday morning on Judge Pan’s rejection of PRH introducing evidence of their projected efficiencies and synergies after the merger, we can now present you with full documentation. The preceding discussion is remarkable on its own, as you can view the judge’s frustration with the defense attorney. Then her actual ruling, which was quite detailed and designed to withstand scrutiny, since it’s likely to be an element of an appeal if it comes to that, is also worth reading and presented here (comprising 24 pages of transcript). Efficiencies discussion Efficiencies ruling
Judge Pan Challenges the Defense’s Economics Expert, Asserts Her Current View of Diminished Competition
The antitrust trial took a pretty striking turn on Monday afternoon for anyone trying to gauge where the case actually stands as it enters its third and likely final week. The defense was questioning their economic expert, Yale professor Dr. Edward Snyder, who was duly explaining why he believes the government’s expert Dr. Nicholas Hill got almost everything wrong: “The government has not proven that there will be a substantial lessening of competition as a result of the merger.” That will likely be the question on which the case hinges. Yes, the merger will give the combined firm half of the […]
Berkett Details the S&S Bidders
Most of ViacomCBS executive Alex Berkett’s testimony on Monday morning was in closed session. But he confirmed for the record that the final three bidders for Simon & Schuster were PRH, Vivendi and HarperCollins. The other invited bidders in the first round were “another strategic buyer” (e.g. a company in publishing), and a financial buyer, identified as based on “relationships that we had with certain human beings at one of the private equity firms and their background in the publishing business.” (This means, presumably, Richard Sarnoff at KKR). And “there was a very small strategic buyer that had a financial […]
McIntosh Speaks Broadly About Publishing; Approves About 200 Seven-Figure Deals A Year
PRH US ceo Madeline McIntosh testified for a good portion of Monday in the DOJ antitrust trial, spending much of her time on a level-headed explanation of many of the financial, strategic and procedural nuts and bolts of publishing. There were a lot of numbers, but one number stood as representing just how big PRH already is as a company. McIntosh approves all advances at the company of $1 million or more, and annually, “on average, I directly approve about 200” such deals. So of the approximately $1 billion market the government says ATSB represent — and the roughly $370 […]
Pearson Sells the Last Part of their K-12 Education Business In South Africa
Pearson has finished the long-running sale of most of their K-12 education businesses around the world, with a deal to sell the South African units to Novus Holding. The total price is £53 million, and Pearson has a 75 percent share of the company. Pearson decided to retain their K-12 education businesses in Australia and English-speaking Canada. The businesses sold since 2021 had provided revenue of £252m, and £22m in adjusted operating profit. Pearson says they “achieved a blended multiple of 14.1x EV/EBITDA 2021” across the various international units sold. That’s much better than they did while unloading the big […]