In 2020, Paramount was trying to downsize its assets in order to increase focus on entertainment. This meant shedding several of their properties, including CNET, CBS’ Blackrock Studio in New York, and their Studio City lot. Publishing house Simon & Schuster was also on the cull list. However, attempts to sell the publisher to Bertelsmann, were thwarted by the Department of Justice. The reason being concerns of a megamerger, since Bertelsmann also owns publishing giant Penguin Random House.
This purchase would have narrowed publishing possibilities and author pay, and with a disconcertingly high market share, according to U.S. Circuit Court Judge Florence Y. Pan. So, it was denied. But Paramount has finally found an approved buyer, as Simon & Schuster has been sold to KKR, a privately-owned equity firm in the US.
Paramount CEO Bob Bakish is relieved to have found a buyer. “The proceeds will give Paramount additional financial flexibility and greater ability to create long-term value for shareholders, while also delevering our balance sheet,” he said of the news. CEO of KKR, Richard Sarnoff, is excited for the opportunity the publisher will provide. “We see a compelling opportunity to help Simon & Schuster become an even stronger partner to literary talent by investing in the expansion of the company’s capabilities and distribution networks,” Sarnoff said.
“The Authors Guild hopes that KKR as a private equity firm will defer to the editorial leadership at Simon & Schuster, recognizing that publishing is a unique business model that requires vision and creativity in ways that don’t always justify themselves on P&L sheets,” the Authors Guild said in a statement about the news. “In the short term, this will mean recognizing that Simon & Schuster is a lean company that cannot afford to lose employees or have editorial decisions and processes undermined. In the long term, this will mean recognizing the tremendous value and prestige offered by Simon & Schuster as a cultural institution and a necessary player in the publishing landscape.”
S&S Have A New Home
This sale has been a long time coming. Paramount has tried desperately to find Simon & Schuster a new home since March of 2020, when they decided to shift their focus primarily to streaming entertainment. The arrival of COVID-19 lockdowns shortly after slowed everything to a crawl.
Simon & Schuster boasts a hefty roster of best-sellers from prolific authors. They come with a number of book deals with celebrities including Britney Spears and Nia Long to name a few. As the company transitions to a standalone company, CEO Johnathan Karp and COO Dennis Eulau will remain directors for the publisher.
Simon & Schuster sold to KKR for the discounted price of $$1.62 billion, down from $2 billion plus.