As Penguin Random House and the Department of Justice continue to prepare for an August trial in which PRH hopes to block the government’s effort to kill its acquisition of Simon & Schuster, professionals throughout the industry are finding themselves pulled into the legal fray.
PW has learned that the DoJ--followed by PRH and S&S--have all begun issuing subpoenas to publishers and literary agencies seeking information about book deals going back years. While subpoenas from the government and the publishers are asking for slightly different things —PRH and S&S appear to have divided the responsibility of sending requests to different publishers and agents—some industry members, all of whom spoke to PW on the condition of anonymity, have described the requests as costly, time consuming, and intrusive.
In general, the subpoenas are looking for detailed information about the bigger deals the houses and agencies have been involved with; most sources cited interest in information on deals for books that drew advances of $50,000 or more. The DoJ is looking for deals going back to 2019, while the publishers are said, in some instances, to be looking at agreements going as far back as 10 years.
A spokesperson for the DoJ declined to comment when asked how many subpoenas the agency had sent or, indeed, if it had sent any at all. RRH also declined to comment.
The subpoenas are being issued as part of the discovery process, which will end in mid-April. To date, between 20-30 publishers are believed to have received the subpoenas, while a only a relatively small number of agents have received them. There are indications that the majority of subpoenas that will be issued have already been sent, though, with the DoJ driving the discovery process and refusing to comment on the matter, the situation is difficult to pin down.
The DoJ's decision to issue subpoenas is a notable shift in the government’s interaction with the publishing community. Up until this point, the DoJ has been conducting informal meetings with industry members. Sources described those meetings as fact-finding sessions in which the agency appeared to be trying to glean basic information about the inner-workings of the business, with a particular focus on how auctions work.
Sources at the agencies added that discussions often included explanations about what happens when offers for a single project come in from different imprints at the same publishing house. PRH is said to be trying to keep the situation as painless as possible, especially for agents (who are regular business partners for the publishers).
While some agents and publishers said that the subpoenas are too broad, and seek sensitive information about how business is conducted, others said the real problem is the amount of work and money that will be required to answer the legal call.
Pulling the documentation requested in the subpoenas will not only be costly—PRH has, PW understands, offered to cover the legal fees incurred by literary agencies (though no such olive branch has been offered to publishers)—but also time-consuming.
Beyond the costs and the time, agents and publishers said that having to open up their private correspondence makes them uneasy. The nature of the business, many explained, makes even above-board conversations—such as ones in which an agent counsels an author to sell their book to one editor over another—sensitive.
PRH and S&S have sought to assure agents and publishers that all information obtained by the subpoenas are subject to a court protective order and will be seen only by their outside counsels (O’Melveny & Myers for PRH, Sherman & Sterling for S&S), and that no one at either publishing company will have access to the material. Nonetheless, not everyone is satisfied with that response. As one source said: "If it continues going as it seems to be going, anything can come out."
But the universal feeling, from sources who are for the merger as well as those who are against it, is that getting pulled into the legal fight is a headache. As one source put it: "The whole thing, at the broadest level, sucks."