Axios Pro: Media Deals

November 01, 2022

Axios Pro Exclusive Content

Good morning, Media Deals readers!

🐦 Situational awareness: Twitter's chief customer officer Sarah Personette tweeted today that she's leaving the company. That means nearly every top Twitter exec is gone days after Elon Musk's takeover, Sara Fischer writes.

1 big thing: Book publisher merger gets axed

Illustration of a gavel on a book instead of a block.

Illustration: Allie Carl/Axios

Simon & Schuster's future is now up in the air, which could open it up to acquisition talks, Kerry writes.

Driving the news: After considering the testimonies from the three-week trial in August, a federal judge yesterday blocked Penguin Random House's acquisition of the rival publishing house.

Why it matters: The decision aligns with the Biden administration's push for antitrust enforcement and sets a precedent for M&A at large.

  • It also leaves Paramount Global, the owner of Simon & Schuster, without the $2.2 billion payday it had expected and with an asset it doesn't want.

Catch up quick: A year ago, the Department of Justice filed a lawsuit alleging the deal violated antitrust law.

  • The deal ⁠— announced two years ago ⁠— was part of Paramount's broader effort to offload non-core assets and focus on streaming.
  • The judge ruled that the deal would "substantially lessen competition" for authors, meaning the combined company would act as a monopsony.

What they're saying: Stephen King had a great Halloween.

  • The author, who had testified against his own publisher, tweeted yesterday, "The proposed merger was never about readers and writers; it was about preserving (and growing) PRH's market share. In other words: $$$."

What's next: All three parties — Penguin Random House, Simon & Schuster and Paramount — issued separate statements yesterday that they were seeking "an expedited appeal."

💭 Kerry's thought bubble: If an appeal isn't granted, Paramount will likely seek another buyer. But the ruling could dissuade another one of the Big 5 or any other book publisher from bidding. That signals an opportunity for private equity.

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