Antitrust Trial

This is an interim report on Penguin Random House ceo Markus Dohle’s testimony in the A3 antitrust trial on Thursday. This post focuses on some of the learnings less related to the merger itself from the morning: – On the subject of bidding rules, which we already reported on once — regarding allowing S&S and PRH to bid independently outside of auctions, when authors want to move with an option book, Dohle said he and Madeline McIntosh are considering an even bigger change. Dohle said “We are considering — no decision yet — to even broaden the opportunity” that their […]

Elicited on the stand in PRH ceo Markus Dohle’s antitrust trial testimony was what community members may see as an extension of the previous commitment to treat Simon & Schuster as an external bidder after the merger. Asked by lead DOJ attorney John Read how the policy would apply to one-on-one negotiations — such as situations in which an author wants to move houses from one group to the other — Dohle said, “We’re going to keep that external, too; that’s my understanding.” Pressed on the point by Read regarding direct negotiations and not just competitive bidding situations, such as […]

The third day of the A3 trial had the full spectrum of trial situations, from a morning in which Simon & Schuster ceo Jonathan Karp continued his extensive testimony and the world was introduced to “glam” budgets — along more lively and quotable back and forth with Judge Florence Pan — to a distinctly glamless afternoon of videotaped depositions, explanations of charts and a brief battle over the admissibility of some tweets. Some of the Karp testimony we already covered in Wednesday’s newsletter, since we were trying to present the fullest and most balanced account we could on certain points. […]

Ayesha Pande at Ayesha Pande Literary is one of the few literary agents that the DOJ will be calling to testify directly at length in the A3 trial, but when her appearance concluded on Tuesday morning, it left some people wondering how her evidence supports the case against the merger. She did ratify the government’s argument that the big five are unto themselves in terms of their ability to consistently pay big advances and bring to bear best-in-breed marketing, publicity and sales clout. Pande noted that even for her authors who have published successfully with a smaller, independent house, “it […]

The most important takeaway from the second day of the A3 antitrust trial echoes a point we made the first day, which is that Judge Florence Pan is clearly very smart, learning quickly about publishing, and not allowing herself to be distracted by posturing from either side of the dispute. In the opening session on Tuesday morning, at the end of testimony and cross-examination from literary agent Ayesha Pande, Judge Pan had inferred, “Is it correct that if Simon & Schuster and Penguin Random House were merged, it wouldn’t have affected any of the deals?” (The answer was, yes.) Then […]

A number of Lunch devotees may have had this same recurring dream in which you are in court (in your pajamas, naturally) and executives, editors and agents are lined up to discuss, under oath, the details of their auctions and acquisitions. Or maybe it’s just a pitch for a “Deals Court” reality show? But Tuesday afternoon in Judge Florence Pan’s Courtroom 12, that was part of what unfolded, as the DOJ’s Jeffrey Vernon walked through a number of competitive situations in which S&S and PRH were the final two bidders for projects of scale. (In the fantasy version of Deals […]