A Problem with Market Share and Antitrust?
Jim Milliot and John F. Baker -- 3/30/98
Although the combination of Random House and Bantam Doubleday Dell will result in a publisher that will dominate the bestseller list and control a significant chunk of the trade book market, the merger is unlikely to be blocked by the Justice Department on antitrust grounds. Executives at both Random and Bertelsmann said the merger would not have proceeded as far as it has without a high degree of confidence that the purchase will be approved.When the merger is completed, Random House will have a 20% to 23% share of the trade publishing market, but only around 7% of total book sales in the U.S. The Random House share of the bestseller list will be much more impressive. Based on 1997 figures, the two companies had a combined total of 69 hardcover and 69 paperback PW bestsellers last year, representing about a third of hardcover bestsellers and half of the top paperbacks. And while that number may upset agents and authors, it's not expected to carry much weight with the government. A lawyer familiar with antitrust legislation (and with current thinking in Washington) told PW that the authorities look at market share of the involved parties both before and after a deal, and would see no problem if the ultimate combined share was lower than 35%. As to competitiveness, "if there are four bidders in a market, they're satisfied." Another factor they scrutinize is the ease with which the business can be entered by new startups - and, he pointed out, "publishing is one of the easiest businesses to enter that exists," with thousands of new players being added yearly. As to the issue of a major American cultural industry coming under the control of a foreign company, his comment was: "This is New York, not Toronto. After all the noises we've made about Canadian cultural protectionism, I'd have a hard time seeing that as an objection." Back To News---> |
