ViacomCBS to sell Simon & Schuster

ViacomCBS is planning to sell Simon & Schuster. According to the Wall Street Journal, there has been "preliminary" interest from News Corp, owner of HarperCollins.

President and c.e.o. of S&S Carolyn Reidy told staff about the new development following a speech ViacomCBS c.e.o. Bob Bakish made in San Francisco.

According to Variety, Bakish told an audience at Morgan Stanley’s investment conference that S&S was “not a core asset” and there had been “multiple, unsolicited” calls to buy it. He said: “It is not video-based. It does not have significant connection for our broader business.”

Reidy wrote in a message to staff: “ViacomCBS c.e.o. Bob Bakish announced that the company is beginning the process by which ViacomCBS will potentially sell Simon & Schuster.

“Whatever the outcome, this process does not change what we know to be true of Simon & Schuster: we are a great publishing house and one of the world’s best known publishing brands, with an incredible legacy and bright future. We have a tremendous track record of producing best sellers in every category and format, and for readers of every age. We have a history of strong and long lasting relationships with our authors, and we will continue to bring important voices to readers around the world, both with our current publishing and our rich backlist of perennially favorite titles.”

She added: “This process will surely be an adventure for all of us, but we are a company that has always risen to the challenges we face. It is your professionalism and expertise that makes Simon & Schuster great, and I thank you in advance for your hard work and commitment during this coming period of transition.”

In its 2019 financial results, released last month, S&S reported a 1% fall in global revenue to $814m, with a 7% decline in operating income.

UK c.e.o. Ian Chapman said last month his side of the business had been in good shape, with a rise in profits despite revenue also declining slightly, adding 2019 had been a "turning point" for the business.

Commenting on the sale, he told The Bookseller: "Simon & Schuster is home to exceptional authors right across our publishing list and a close-knit team of immensely talented staff. We are a highly successful and profitable business and, while we face a period of transition, we shall continue to do what we do best–publish with excellence. We are here because of our authors and we thrive because of our staff.

“We look forward to a new adventure which will see us bringing even more books to even more people.”

Simon & Schuster is the third biggest publisher in the US, but much smaller in terms of its global reach than rivals such as Hachette and Penguin Random House, with its UK division the 9th largest publisher, not only much smaller than the big four, but also behind Bloomsbury and Bonnier Books. Strategically, though the Wall Street Journal reported that ViacomCBS wanted to get an ambitious $1.2bn, for the group, it could still represent an attractive acquisition for HarperCollins, Hachette or even Bonnier, as each group looks to respond to the dominant Penguin Random House.

Penguin Random House's 2018 revenues were €3.4bn; were Hachette to buy Simon & Schuster, the combined revenues would be just over €3bn, within striking distance of the PRH total but not knocking it from the top place. If HarperCollins were to buy S&S, it would consolidate its position as the US' second-biggest publisher, while nudging it slightly closer to Hachette in the UK.

Speculation over a potential sale had mounted after S&S parent company CBS merged with US conglomerate Viacom last year.