Yesterday PRH svp of M&A Manuel Sansigre, who has reviewed 100 possible acquisitions at PRH and closed 26, testified on the details of developing PRH’s bid and “efficiencies model” for S&S. His testimony resumed Tuesday morning. When Viacom announced the sale of S&S in March 2020, Sansigre’s team began creating an efficiency model—analyzing duplications between the two companies—(and continued even when the sale was on pause through the spring and summer due to COVID) with publicly available info about S&S. Around Labor Day 2020, Viacom restarted the sale process and gave Sansigre access to raw S&S data—“P&Ls by country, by […]
Antitrust Trial
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 […]
Agents on the Merger
The antitrust trial’s afternoon session continued with three literary agents taking the stand for the defense—Elyse Cheney, Andrew Wylie, and Gail Ross. They discussed auctions and negotiations, how they retain their power, and the effect of the possible merger on their clients. Cheney echoed what many other witnesses have said when asked why Big 5 publishers acquire books for $250,000+ more often than non-Big 5 do. “I think the non-Big 5, you know, are just not going to play in that sandbox too many times. They don’t have the same scale.” But when they do acquire ATSB, smaller publishers have […]
A3 Thursday: Charles Duhigg’s Atypical Testimony, and More
Author of The Power of Habit Charles Duhigg served as a curious and somewhat baffling witness for the defense on Thursday. The upshot is, he is a very happy Random House author, and he has made so much money he really doesn’t care about his advances. Also, despite having an MBA and having written about economics, he does not appear to understand the nuts and bolts of business very well. Duhigg has had a rewarding and valued partnership with his editor, Andy Ward. On the process of writing The Power of Habit, Duhigg said, “It would not be unfair to […]
Judge Pan Learns How “Informal” The Industry Is As Defense Calls Walsh, Bergstrom and Glusman
Halfway through the antitrust trial, yesterday the defense began calling witnesses. Walsh The defense’s expert, former literary agent Jennifer Rudolph Walsh, took the stand on Wednesday, explaining to the court how important love, dreams, and art are to the publishing industry, rather than just the financials, and the informal nature of most business deals—all of which seemed to surprise Judge Pan. Walsh explained that an agent is a “curator” for a publisher who finds the content, and has a fiduciary relationship with authors. They are “honor bound to act in the best interest of our clients.” In explaining exclusive submissions […]
Final Government Witnesses: Hill and Fletcher
The DOJ finished calling their witnesses in the antitrust trial on Wednesday morning, with the end of testimony from economist Dr. Nicholas Hill (who will be called again during rebuttal) and a video deposition from literary agent Christy Fletcher. Defense counsel Oppenheimer again challenged Hill’s models and the data input to them. Hill used the minutes of editorial meetings at 12 S&S imprints (out of 38) and 13 PRH imprints (out of about 100) to determine how often one party bids, and if they lost, how often the other was the winner. (Oppenheimer: “This was hard work for you right?” […]