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Authors, Agents Challenge Random/BDD Merger
Jim Milliot -- 4/27/98
The Authors Guild and the Association of Authors' Representatives filed objections last week with the Federal Trade Commission about the proposed acquisition of Random House by Bertelsmann.
According to the Guild, the merger of Bantam Doubleday Dell with Random would create a company that controls more than 36% of the U.S. adult trade book market (which it defines as the adult hardcover and trade paperback segments, which had sales of $7.8 billion in 1997, according to the AAP). The Guild argues that Bertelsmann's contention that the merged company would have only a 10% market share takes into account all book sales, including textbooks and professional books, which don't compete with trade books in the same marketplace.

"It's even worse than we thought," said Letty Cottin Pogrebin, president of the Guild. "No single company should have this much control over authors' expression or this much influence on our culture." AAR president Virginia Barber contended that the merger "would put greater emphasis on the works of a few bestselling authors and celebrity books. We're asking the FTC to protect the publishing industry now, before the next mega-merger."

Authors Guild executive director Paul Aiken noted that "with all the consolidation that has taken place in the industry, we have never seen a merger of this size. We're concerned about access to publishers for new authors and new voices. We want to keep publishing diverse." Bertelsmann spokesperson Stuart Applebaum called the Guild's evaluation of the scope of the adult trade book market "absurdly skewed and seriously uninformed." Bertelsmann puts BDD's and Random's market share at 10.9%, a statistic that Applebaum said was arrived at "by a careful vetting of consumer book publishing industry data" for 1996, the most recent year in which complete numbers are available.

Applebaum added that in calculating BDD/RH's proposed market share, it did not include textbooks or professional books, but did include mass market paperback and book club sales.

The FTC is expected to decide whether to initiate a second round of reviews of the merger this week. If a review to the next level is denied, the merger for all intents and purposes will have gained FTC approval.
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