It’s not every day that the publisher of All the President’s Men takes a back seat to a Great America theme park, but Sept. 7 was such a day for Simon & Schuster. That was when New Yorkers found a new media superpower, spawned by Viacom Inc. and the CBS Corporation and wriggling into the No. 2 slot behind Time Warner Inc. Over at 1230 Avenue of the Americas, a statement from Viacom chief executive Sumner M. Redstone was circulated to employees of Simon & Schuster, Viacom’s publishing division. At a CBS press conference at the St. Regis hotel, members of the Fourth Estate were handed a map pinpointing all the TV and radio stations that would henceforth buzz with one signal. But the part in the next day’s papers that would raise some eyebrows was Viacom’s asset list, which began with MTV Networks and concluded with MTV Networks Online: Simon & Schuster came in behind Paramount Parks, Viacom’s theme park company.
“I didn’t see that, but if that’s the case, I don’t take that seriously,” said Simon & Schuster publisher David Rosenthal, adding that the publishing house has been a tiny part of the big empire for a while.
If the $80 billion merger is approved, the proportion of Simon & Schuster’s total revenue at Viacom-CBS will shrink from 4.7 percent to 2.4 percent. “It’s dwarfed by the billion-dollar units,” said Albert Greco, a professor who specializes in publishing at Fordham University’s graduate school of business. “They become a smaller player at the corporate level.”
“Size is not the only issue,” said Mr. Rosenthal. “There are other factors than the size of a unit in any company.”
Maybe size matters in this way: Simon & Schuster stands to shrink into a metaphor for the publishing industry.
“Ten years ago, Simon & Schuster felt like it was bigger than the island of Manhattan, and now they feel like an imprint,” said Jim Fitzgerald, a former St. Martin’s Press editor who became an agent this year with the Carol Mann Agency.
That’s the way history has been writing it. “If you look at the largest book-publishing companies, even 10 years ago, they have been increasingly smaller portions of increasingly larger media and entertainment conglomerates,” said Robert J. Broadwater, a managing director at Veronis, Suhler & Associates, an investment bank that specializes in the communications industries.
The conglomerates exert certain pressures. “The whole industry in the last 20 years has seen a shift from editorial to marketing and sales,” said Robert Weil, an executive editor at the employee-owned W.W. Norton & Company. “Without question, editorial plays a smaller and smaller role. I don’t think there are more than 200 editors in mainstream American publishing. What a takeover means is that a publishing company must return big profits very quickly, so as an editor you are turning down good things that could sell 10,000 or 15,000 copies. The big corporations are not interested in those. They want to do very big books.” Mr. Weil spent 11 years as an editor at St. Martin’s Press, which was purchased by the von Holtzbrinck Group in 1995.
Simon & Schuster’s publisher Mr. Rosenthal pooh-poohed the notion that the deal signaled anything but a change for the better. “I think people are excited,” he said. “It’s a swell deal. There was not a sense of dread. It wasn’t like we had just merged with Dow Chemical. I mean, CBS is a swell company with a great tradition.”
Some publishing executives think the swell deal is no big deal. “I don’t see how it makes any difference if you’re 4 percent or 2 percent,” said Time Warner Trade Publishing’s chief executive Laurence Kirshbaum, whose company met with Viacom this summer about forming a joint venture with Simon & Schuster. “The fact is, this business will go on. As long as the company seems to be functioning well and solvent, personalities prevail over corporate superstructures.”
“It might make some difference to the people at the top, because they’ve got different bosses,” said Peter Mayer, who was the chief executive at Penguin for 19 years and now is publisher of the Overlook Press. “Let’s say you’re small and throwing off large profits, they’ll love you, the owners. It all depends on whether the new owner is encouraging of trade publishing or not.”
The industry is used to the musical chairs by now. Literary agent Liz Darhansoff, whose clients include Annie Proulx ( Wyoming Stories , The Shipping News ) and Ivan Doig ( Mountain Time ), said she won’t stop submitting projects to Scribner, the rather literary imprint of Simon & Schuster. “It doesn’t make me feel any differently,” she said. “It’s the people who are there that matter. For the moment, I’m comfortable. If these deals made a difference, we’d all close up shop.”
Born as a publisher of crossword puzzle books in 1924, Simon & Schuster stacked up across 75 years into a global publishing power that appealed to conglomerates. In 1975, the year New York City almost went bankrupt, Gulf & Western bought the publisher. That was before answering machines, before brewed decaffeinated coffee and before the word “synergy” had reached the first tier of the media lexicon. But the idea was there: G&W wanted its Paramount Pictures studio and the nice publishing house to play together. So, too, when Viacom Inc. bought Paramount in 1994 (Gulf & Western had changed its name to Paramount Communications in 1989), it was hoping to raid Simon & Schuster’s closet for something that would go well with the silver screen, a game show or perhaps a ride at Great America. Or better, turn pixels into type.
The rationale may be wearing thin. “Synergy works only in classrooms and bankers’ offices,” said Professor Greco. “It takes years and years to develop those relationships. They’ve done some things, sure– Rugrats , Titanic , MTV Books–but we’re not talking about major undertakings. The only company that was ever able to do this successfully was Disney.”
But using Rugrats as a measure of success is hardly reassuring for those who read books. Watching Simon & Schuster become just another page in the annual report is disconcerting, to say the least, for those whose experience of America has been in many ways defined by certain books and the public conversation stimulated by those books. Look at some of Simon & Schuster’s backlist: How to Win Friends & Influence People , by Dale Carnegie; The Organization Man , by William H. Whyte; Catch-22 , by Joseph Heller; Lonesome Dove , by Larry McMurtry; All the President’s Men , by Carl Bernstein and Bob Woodward; and Angela’s Ashes , by Frank McCourt.
And yet, as one analyst put it, a prestigious backlist can be a swollen asset. “A backlist is great, but it’s only worth something if you can find a way to get people to pay you for it again and again,” said Mr. Broadwater. “It makes you zero money until you can work it into a product you can sell.”
According to publishing sources, Simon & Schuster’s chief executive, Jonathan Newcomb, will be reporting directly to CBS Corporation’s president and chief executive officer, Mel Karmazin. Mr. Karmazin, a born ad man known for his cost-cutting skills, is both a suit and arguably a creative type. “He’s very similar to [the Walt Disney Company's chief executive] Michael Eisner and [USA Networks Inc.'s chief executive] Barry Diller,” said Professor Greco. “It doesn’t matter whether Karmazin likes books or not, his ultimate concern is return on investment to stockholders.”
It remains to be seen how bookish Mr. Karmazin is feeling these days. “I wouldn’t think he’s interested in Simon & Schuster unless he can sell ads in the endpapers,” said one publishing executive. But, said one CBS executive, “There’s no question that publishing is part of the content-providing food chain that helps a company make the most of its various ideas and other assets.”
Still, industry observers believe that Simon & Schuster is losing its two biggest boosters at Viacom, deputy chairmen Philippe Dauman and Tom Dooley, who will be leaving with laden pockets and will remain on the board.
“Viacom as a whole has been supportive,” said Mr. Rosenthal, who never reported to Mr. Dauman or Mr. Dooley directly, and had no comment on their support or lack thereof for Simon & Schuster. “It’s a company. It’s not about individuals. Viacom has been a benevolent corporate parent. What’s going to happen with us, and with any other division, remains to be seen.
“When the other [publishing] divisions were sold, Viacom went to great pains to make everyone here understand that they were an important part of the company,” said Mr. Rosenthal. “I think it was a symbol of their interest that Sumner and other key players came to our 75th-anniversary extravaganza. And that synergy between Viacom entities and S.&S. is very strong, be it Angela’s Ashes coming out this fall from Paramount or all the children’s publishing that continues to tie in with Nickelodeon.”
For persnickety observers, one early indicator of life under Viacom-CBS may come Sept. 15, when Scribner is throwing a swishy bash to celebrate the publication of Mr. McCourt’s second book, ‘Tis . Mr. Redstone is scheduled to be out of town, and so won’t be found among the 150 guests munching cheese and crackers in a party space in Grand Central Terminal. There are more than 2 million hardcover copies of Angela’s Ashes in print in North America. It fastened itself to The New York Times ‘ best seller list for 117 weeks. The memoir is published in 25 languages, including Catalan, Croatian and Slovene.
Was Mr. Karmazin invited to the festivities? “No,” said Scribner publicity director Pat Eisemann. “When the merger is a fait accompli , we will address updating our corporate guest lists.”
The Publishing column can be reached at email@example.com.
Follow Elizabeth Manus via RSS.