How Will HM's Harcourt Buy Affect Trade?

By Judith Rosen and Jim Milliot -- Publishers Weekly, 7/17/2007 10:42:00 AM

When Houghton Mifflin Riverdeep's CEO Tony Lucki said in statement that, “We would like to think that Houghton Mifflin's Henry Wadsworth Longfellow and Harcourt's T.S. Eliot would truly be proud of what we are announcing today," the subtext of the message seemed clear: HM Riverdeep's purchase of Harcourt is good news for literary publishing.

But with finalization of the acquisition of Harcourt’s U.S. Education division, which includes trade, still months away, there's already plenty of speculation about what the deal will mean for the trade divisions. Early indications are that HM will keep the Harcourt unit and form a division that would have trade sales of about $200 million. Lucki has been a strong supporter of the HM trade division and backed Harcourt Trade when he led Harcourt, believing that providing quality fiction and nonfiction can help a publisher win textbook adoptions in schools. 

Both houses have similar adult and children’s lists, which emphasize literary over commercial. Together, the two companies have a backlist of more than 7,500 titles, and the combination of HM’s Mariner trade paperback imprint with Harcourt’s Harvest imprint would create a formidable backlist that would have Vintage-style clout in the marketplace. The main difference between the publishers is in reference. Houghton is known for its Peterson’s guides and The American Heritage Dictionary, while Harcourt’s reference operations focus more on library reference through its Greenwood-Heinemann imprints. If HM chose to put reference together with trade, estimated total sales from that group would be around $300 million.   

 It is because HM and Harcourt are similar in the types of books they publish, however, that has some agents concerned. “The spin will be that these are two houses of like sensibilities. For me, it means one more kind of unique publishing voice is lost,” an agent said.

Who will run a combined HM/Harcourt is another open question. In preparation for its sale to Riverdeep late last year, Houghton began quietly laying off staff from various departments throughout its trade and reference division. Then in March, Teri Kelly announced that she would step down as president of the trade and reference division. Kelly left late last month, despite the lack of a successor. Some industry watchers suspect that Lucki is waiting for the acquisition to to be completed to install his former Harcourt colleague, Dan Farley, as president of the combined trade division. Logistics could be a problem, however, as Farley shuttles between Harcourt's New York and San Diego offices, while HM has its main office in Boston and small operation in New York. Houghton declined to comment on a possible successor or even a timeline for Kelly’s replacement.