As 2022 began, the U.S. trade publishing business was dominated by what has been called the Big Five—Simon & Schuster, Penguin Random House, HarperCollins, Hachette Book Group, and Macmillan. Before the Penguin–Random House merger in 2013, that group was referred to by PW as the Big Six; if a court battle between PRH and the Department of Justice allows PRH to acquire S&S, a deal that the government blocked in Nov­ember 2021, it could shrink to the Big Four in late 2022.

The shape of trade publishing in 2022 began forming just weeks before PW turned 125 in 1997. In December 1996, the Penguin Group, backed by parent company Pearson, acquired the Putnam Berkley Publishing Group from its parent company, MCA. Pearson paid $336 million for Putnam, which had sales of $276 million. With that acquisition, Penguin’s trade revenue hit $871.5 million in 1997.

Simon & Schuster: Setting the stage

In 1998 two other huge deals set the stage for the future of trade publishing in 2022. In PW’s 125th year, Simon & Schuster was at the height of its publishing power. Through years of acquisitions that began in 1984, supported by parent company Gulf+Western (which was renamed Paramount Communications in 1989), S&S had grown into a publisher with revenue of more than $2 billion; the company was a major player in the trade, education, professional, and reference publishing segments. That all changed in 1998 when its new parent company, Viacom, sold all but S&S’s trade subsidiary to Pearson and the equity firm Hicks, Muse, Tate. (Pearson paid a total of $4.6 billion for the S&S assets, and sold the reference, business, and professional groups to Hicks, Muse for $1 billion, leaving Pearson with a bill of $3.6 billion for the school, higher education, and international groups.)

The S&S trade group, which had sales of about $650 million in 1998, moved to CBS when Viacom split its operations into two separate companies, Viacom and CBS in 2006. In 2020, when Viacom and CBS reunited, S&S became part of the newly formed ViacomCBS, which quickly put the publishing house up for sale.

Looking at PW’s coverage of the breakup of S&S in 1998, there were questions even then whether S&S would fit within a company whose focus has ranged from growing its advertising businesses to expanding its streaming services. The sale of S&S was put on hold for years when S&S became part of CBS, but its divestiture became inevitable once CBS and Viacom merged for a second time.

From the time it became a standalone publishing company at Viacom in 1998 and being sold by Viacom in 2020, S&S made only a select number of acquisitions, buying its Canadian distributor, Distican, in 2002; the Christian press Howard Publishing in 2006, and the independent publisher Adams Media in 2016. Rather than acquisitions, S&S has focused its growth efforts on internal initiatives, including starting a host of imprints, international expansion, and broadening its distribution business. In 2021, it had sales of $993 million.

Penguin–Random House: Shifting strategies

S&S’s strategy in the 1980s and ’90s of building a publishing powerhouse in different industry areas fit into a tactic embraced by a number of companies in that era—a strategy that gradually fell out of favor as publishers, or the parent companies that owned them, decided to focus on individual segments. In 1996, HarperCollins sold its educational properties to Pearson. In 2012, Pearson itself chose to leave the trade market when it agreed to merge Penguin with Random House, selling its final stake in PRH in 2020. In 2021, HC took advantage of Houghton Mifflin Harcourt’s decision to focus on the learning technology space by acquiring HMH’s trade division for $349 million.

The creation of HMH was the result of one of the most tortured acquisition processes in recent publishing history. Before 2007, HM and Harcourt Brace (which for many years had been known as Harcourt Brace Jovanovich) were separate companies with large educational publishing businesses and smaller trade operations. In 2006, investor Barry O’Callaghan’s Riverdeep company bought HM, and a year later O’Callaghan paid $4 billion to acquire the educational and trade publishing assets of Harcourt Brace to form HMH. In 2012, with O’Callaghan gone from the company, HMH filed for Chapter 11 bankruptcy. Shortly after HMH emerged from bankruptcy, it went public in 2013 and had its share of problems navigating the changing educational publishing marketplace. It came as no surprise when HMH decided to put the trade division up for sale in late 2020, nor was it surprising that HC bought it in May 2021.

Bertelsmann steps up

The other seminal deal in 1998 was in March, when Bertelsmann astounded the industry by announcing its intention to acquire the U.S.’s largest trade publisher, Random House, from Advance Publi­cations, owned by the Newhouse family. Bertelsmann had been slowly but steadily building its book business in the U.S. and through a number of acquisitions was the owner of Bantam Doubleday Dell (as well as the Doubleday Direct book club business) when it bought Random House. No purchase price was disclosed, but the two companies were estimated to have had combined revenue of $1.4 billion to $1.7 billion that year.

News of Bertelsmann’s intention to acquire RH brought similar reactions to those in 2012 when the RH-Penguin deal was announced and later in 2020 when PRH’s plans to buy S&S were announced. According to PW in its Mar. 30, 1998, issue, amid “an initial reaction of shocked disbelief, a flurry of concerns were raised, particularly by authors and agents, who feared a diminution of the competitive marketplace, a watering down of the Random group’s role as one of the more literary, tradition-minded publishers, and an even tougher time ahead for quality midlist titles, as opposed to high-budget glamour books with targeted readerships. There were also fears expressed, particularly among staff members of the two huge houses that will now be merged, over likely duplication of functions and resulting job losses.”

“We would like to play a role in shaping the future of the book publishing industry.” —Peter Olson, following Bertelsmann’s purchase of Random House in 1998.

In response, Peter Olson, who would lead the new RH, told PW the editorial autonomy and independence of the various imprints, on which the Random group in particular had always prided itself, would be maintained. Olson also noted that as other large media companies abandoned trade publishing or books altogether, Bertelsmann would be increasing its commitment. “The book business has been and always will be a core business for Bertelsmann, be it through direct marketing, online retailing or trade book publishing,” he said, adding, “All three businesses will be run at arm’s length from each other.” Olson noted that Bertelsmann planned to continue investing in the book business; “We would like to play a role in shaping the future of the book publishing industry,” he declared.

Though Olson left RH in 2008, Bertelsmann has indeed played a key role in creating the modern American trade publishing market, under the leadership of Markus Dohle. In 2012, Bertelsmann and Pearson announced their plan to combine Penguin and Random House in a deal that would give Bertelsmann a 53% stake in the new publisher while Pearson would have a 47% stake. The deal was completed on July 1, 2013, and over the next several years Bertelsmann gradually bought out Pearson’s PRH share. In 2021, PRH had worldwide revenue of more than $4.5 billion, with about $2.6 billion generated in the U.S.

Prior to the Penguin deal, Random House had made a series of smaller acquisitions in the U.S., acquiring the audiobook company Listening Library in 1999, the children’s book publisher Golden Books in 2001, Rough Guides in 2002, the religious press Multnomah in 2006, and Ten Speed Press in 2009. Following the Penguin deal, PRH bought Sasquatch Books, a distribution client, in 2017, acquired the assets of Rodale Books in 2018, and in 2019 took a 45% stake in the independent publisher Sourcebooks.

HarperCollins emerges

The move that was the major catalyst to allow HarperCollins to grow into the U.S.’s second-largest trade publisher occurred in 1987 when News Corp

bought Harper & Row. A year later, H&R became a major factor in religion publishing in the U.S. with its purchase of Zondervan. In the next major event, in 1989, News Corp bought U.K.-based William Collins, and the following year H&R and William Collins were merged to form Harper-

Collins. Over the course of the last 25 years, HC has added companies in both the U.S. and U.K., as well as making acquisitions in some other countries as well. Bolstered by those deals, HC’s total revenue was over $2 billion (including about $23 million coming from the HMH May 2021 purchase), with an estimated two-thirds of its revenue coming from the U.S.

In the U.S., HC made three major acquisitions between 1997 and its purchase of the HMH trade division last year. In 1999, the company acquired Morrow and Avon from the Hearst Corp., a deal that added roughly $210 million and propelled HC into its current status as the country’s second largest trade publisher. Also in 1999, HC added two other companies, the pioneering African American publisher, Amistad Press, plus the literary house Ecco Press.

Its next major move came in 2011 when HC secured its place as the country’s largest religion book publisher with the purchase of Thomas Nelson for $200 million. The deal did not actually close until 2012, after a government review of the purchase, which examined how large a share of the religion publishing market the combination of Zondervan and Nelson would command. The deal was approved without HC needing to make any divestitures.

In a surprising move, in 2014 HC acquired Harlequin for C$455 million. Headquartered in Toronto, but with offices in many overseas countries, Harlequin had sales of about C$400 million in 2013. HC CEO Brian Murray noted that with one deal, “we have greatly expanded our international footprint.”

From AOLTWBG to Hachette

Today’s Hachette Book Group began to be formed in 1989–1990 when Time Inc., the parent company of Little, Brown (as well as the since closed Time-Life Books, and Book-of-the Month Club, which was sold), merged with Warner Communications, parent company of Warner Books. When the mammoth deal was completed, the book operation was combined into the Time Warner Trade Publishing group. On Jan. 1, 2002, the book group’s name was changed to the AOL Time Warner Book Group following the merger of AOL and Time Warner, a deal considered one of the worst in corporate history. The merger generated a huge amount of debt that AOLTW tried to pay down, in small part, by looking to sell its book publishing properties in 2003. No deal materialized then, but in April 2006 the French conglomerate Lagardère bought the Time Warner Book Group for $537.5 million (TWBG had estimated 2006 sales of $510 million).

Since it has become part of Lagardère, the Hachette Book Group has made six significant acquisitions, beginning in 2013 with the purchase of about 1,000 adult titles from Disney’s Hyperion imprint. In 2015, the company added Black Dog & Leventhal, followed in 2016 by the purchase of the publishing division of the Perseus Books Group, which had sales of about $100 million. In 2018, HBG acquired the Christian book house Worthy Publishing, and added more than 1,000 children’s titles in a deal with the Disney Book Group in 2020. In 2021, HBG made its biggest acquisition, buying the Workman Publishing Group, which had 2020 sales of $134 million, for $240 million. In 2021, the U.S. and Canada accounted for 28% of Lagardère’s 2021 revenue of €2.6 billion ($2.9 billion at current exchange rates).

Holtzbrinck Becomes Macmillan

The final member of what is still the Big Five, Macmillan Publishers, has largely stood pat in terms of acquisitions over the past 25 years. Macmillan is owned by the German media company Holtz­brinck, which first entered the American trade market in 1985 when it acquired Holt, the trade division of Holt, Rinehart & Winston. Nine years later, it upped its presence in the U.S. with the purchase of the prestigious literary house, Farrar, Straus and Giroux. Its biggest move in terms of size, however, came in 1995, when it acquired the Macmillan Group, which included St. Martin’s Press, Tor, Nature, Macmillan, and the U.K.’s Pan Macmillan. Its lone major acquisition in the trade area since 1997 was the 2001 purchase of Audio Renaissance, a deal that moved Macmillan into the audiobook publishing business.

Holtzbrinck augmented its lean acquisition strategy by backing internal growth, particularly in expanding its presence in children’s publishing through the Macmillan Children’s Publishing Group. On the adult side, it has added important imprints including Flatiron Books in 2014 and Celadon Books in 2019.

Though its U.K. trade business has always operated under the Macmillan brand, in building its trade publishing business in the U.S., Holtzbrinck placed its companies under the Holtzbrinck label since the Macmillan name in America had been owned by Pearson following its 1998 purchase of the Simon & Schuster educational and professional group, which included various Macmillan properties. In fall 2007, Holtzbrinck acquired rights to the Macmillan name in the U.S. for both its trade and college businesses.

Below, more on the top publishers in the industry.

Publishing's Big Five Today (But Do Stay Tuned)
A steady flurry of mergers and acquisitions has dominated the book publishing sector since the 1990s, although for the moment, the next big M&A move—PRH purchasing S&S—is on pause.