November 1, 2012
Rupert Murdoch laughs at Penguin-Random House merger
by Kelly Burdick
Everyone is freaking out about the merger of Penguin and Random House, but the man who tried to “scupper” the deal—News Corporation CEO Rupert Murdoch—doesn’t think the mega-merger means a bigger publisher.
Huh? Apparently ticked that his $1.6 billion pitch to buy Penguin wasn’t taken more seriously, Murdoch took to Twitter to call the deal a “disaster”:
Bertelsmann-Penguin faux merger disaster. Two publishers trying to contract while saying opposite. Let’s hear from authors and agents!
According to a short report in the Telegraph highlighting Murdoch’s post, “Many authors have already voiced their objections to the prospect of a News Corp takeover of Penguin, but they are also concerned that the merger with Random House will reduce competition for their books.”
Is Murdoch echoing the criticisms of Andrew Franklin of the Independent, who pointed out that the Penguin-Random House deal was really about cutting jobs—or “contraction” to use Murdoch’s term? Perhaps, but it’s hard to see how a News Corp takeover of Penguin would have been any different. It wouldn’t have been.
Just recently, Murdoch fired a third of the staff of his tablet-only “newspaper” The Daily. In 2009, he dumped a boat load of people at HarperCollins. And earlier this year, Harper dumped a big part of its sales department.
Contraction, disaster? Say you what you will, but M&A folks in the book business—no matter what huge corporate entity they work for—rarely plan to expand. It’s a cost cutting business. You roll one firm into another and try to grow profits a little in process.
Kelly Burdick is the former executive editor of Melville House.