Penguin Random House CEO Markus Dohle has relinquished his position at the head of the publisher, just weeks after a federal judge blocked the publisher’s attempt to acquire rival Big Five publisher Simon & Schuster. In a December 9 announcement, officials at PRH parent company Bertelsmann said Dohle will step down as CEO and resign his seat on the Bertelsmann executive board at the end of 2022 “at his own request and on the best of mutual terms,” though he will continue to serve in an undefined “advisory" role.
“Following the antitrust decision in the U.S. against the merger of Penguin Random House and Simon & Schuster, I have decided, after nearly 15 years on the Executive Board of Bertelsmann and at the helm of our global publishing business, to hand over the next chapter of Penguin Random House to new leadership,” Dohle said in a statement. “I have led our global book business with great enthusiasm and passion and I am proud of what we have achieved together.”
PRH president and COO Nihar Malaviya will succeed Dohle on an interim basis, reporting to Bertelsmann chairman and CEO Thomas Rabe.
An engineer by training who rose through the ranks from the printing and distribution side of Bertelsmann's business, Dohle took over as CEO of Random House in 2008. He was appointed Penguin Random House's first CEO after orchestrating and overseeing the blockbuster merger of Random House and Penguin, which was completed in July 2013, creating a mega-publisher that has come to routinely dominate the bestseller lists. From the outset, Dohle cut an iconoclastic figure among publishing CEOs, and over the years has became well known for his passionate belief in the health of the publishing business (which he repeatedly insisted was enjoying its best period since Gutenberg), for creating a powerful printing and distribution operation, and for backing his words up with consistently solid performances in terms of sales and profits—a record Bertelsmann officials acknowledged in their comments.
“We regret Markus Dohle's decision to leave Bertelsmann and Penguin Random House,” said Christopher Mohn, chairman of the Bertelsmann supervisory board, said in a statement. “Under his leadership, our book division more than doubled its revenues and quintupled its profit. The fact that our global book publishing group is in such a strong position today is largely thanks to Markus Dohle. Bertelsmann is very grateful to him for this, as well as for his work on the group's executive board.”
“Together with Markus Dohle, we on the executive board have advanced Bertelsmann's development in recent years, especially with the successful combination of Penguin and Random House,” Bertelsmann chairman and CEO Thomas Rabe added. “Markus Dohle gradually expanded Penguin Random House and strengthened the book publishing group's global presence together with his international management team. He has signed and retained numerous authors for the publishing company. I would like to thank him for our successful collaboration, which I have always greatly appreciated, and I am pleased that Markus Dohle will remain associated with us in an advisory capacity."
As a primary architect of the move to acquire Simon & Schuster, Dohle is now the first Bertelsmann official to pay the price for the failed acquisition. The company’s aggressive $2.17 billion bid to acquire Simon & Schuster was broadly unpopular within much of the publishing industry, with authors, agents, and other publishers and publishing workers voicing fears that the combined company would occupy an untouchable, anticompetitive position at the top of the industry.
Federal regulators agreed. On November 2, 2021, the U.S. Department of Justice announced its suit to block the deal. And in a devastating October 31 opinion and order, federal judge Florence Pan enjoined the merger.
“It is significant that in a market already prone to collusion, where coordinated conduct already appears to be rampant, PRH’s acquisition of S&S would reinforce the market’s oligopsonistic structure,” Pan concluded, “and create a behemoth industry leader that other market participants could easily follow.”
In addition to the expense of putting together and then litigating the controversial acquisition, the failed deal also cost Bertelsmann a $200 million breakup fee after Simon & Schuster parent company Paramount Global declined to extend the purchase agreement and pursue an appeal. At a UBS media conference earlier this week, Paramount CEO Bob Bakish said the breakup fee had already been collected.
While there had been whispers in recent weeks among industry insiders that Dohle might depart in the wake of the failed acquisition, the news took many by surprise. “They lost their fight against with the Justice Department and that certainly puts damper on what they can do going forward, but I think the facts and reality on the ground show that Markus did a brilliant job,” said literary agent Robert Gottleib, chairman of the Trident Media Group. “I think he leaves behind a very successful organization.”