NEW YORK (AP) – On the latest news about consolidation in the literary world, Rupert Murdoch’s News Corp. announced on Monday the purchase of the book publishing division of Houghton Mifflin Harcourt, which includes blockbuster publications such as JRR Tolkien’s trilogy “The Lord of the Rings” and George Orwell’s “1984”.
News Corp. owns HarperCollins, one of the largest book publishers in the industry, which will operate the HMH Books & Media division, the company announced on Monday. The announced purchase price was $ 349 million.
“Timeless writing is a timely source of income, and the potential for creating highly profitable audio and video work grows with each digital day,” said Robert Thomson, CEO of News Corp., in a statement. “The HarperCollins collection is strengthened for children and teenagers.” Adults and writers around the world will have a greater platform for their creativity and ingenuity. It’s crucial to expand at a time when emerging monopolies are threatening the creative market. So we say hello to JRR Tolkien, Virginia Woolf, George Orwell, and many, many other respected HarperCollins writers. “
HarperCollins’ writers ranged from Harper Lee and Ann Patchett to Neil Gaiman and Roald Dahl. The publisher expects to “achieve immediate cost savings that add up to more than $ 20 million a year in two years, including manufacturing, distribution, and other cost efficiencies.”
A HarperCollins spokesman on Monday declined to say whether the company had any plans to layoffs, saying it was focused on “closing the deal” and that “no decisions have been made”.
In November, Penguin Random House announced it would take over rivals Simon & Schuster for $ 2.2 billion, reducing America’s publishing industry’s Big Five – which include HarperCollins, Hachette Book Group, and Macmillan – to four were.
According to reports, News Corp. had been interested in buying Simon & Schuster and Thomson slammed the mega-deal when it was announced, saying the new company was a “book giant” and a “literary leviathan” that would dominate the market. HarperCollins’ purchase of HMH, like the proposed Penguin Random House deal, is subject to federal approval. Agents and writers fear that concentrating power in publishing would lead to less competition for book stores and less progress.
The deal is the second News Corp. announced last week. On Thursday it was said to be buying financial news publisher Investor’s Business Daily for $ 275 million.
Houghton Mifflin, who says he serves 90% of U.S. schools, said the sale will allow him to focus on his K-12 education business and it will put more emphasis on digital sales. The company has had financial problems for years and will use a portion of the proceeds from the sale to pay off debts.
The deal is expected to close in the second quarter of 2021.
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