The experiment brought the company’s inner workings out into the open in sometimes unattractive ways. In his testimony, Dohl argued that success in publishing was driven by instinct and random luck, not necessarily company size—an argument the judge found unconvincing. He revealed his dissatisfaction with the company’s performance since the 2013 merger.
The deal with Paramount, Simon & Schuster’s parent company, included a $200 million termination fee if the acquisition did not go through. The costs of defending the government’s lawsuit were also significant.
Dohle was the first CEO of the merged Penguin Random House, and was CEO of Random House before that. He began his professional career with Bertelsmann in 1994, managing the company’s book distribution business, and quickly rose through the ranks. As president of Penguin Random House, he oversaw the company’s expansion of its print capacity and distribution network at a time when many in the industry predicted that the print business would shrink and e-books would become dominant. Supply chain investments have proven to be a huge success, with print sales not only rebounding, but soaring.
“He was consistently profitable for the company, but more importantly he brought a kind of buoyancy and optimism to the industry,” said literary agent Elise Cheney, who testified as a witness for Penguin Random House at the trial. “He prioritized the important social role that books play in culture.”
During the pandemic, Penguin Random House and other major publishers have seen a sudden jump in book sales that have brought record profits. In 2021, Penguin Random House has sold and published 700 million copies of its books record returns.
But this year, sales are slumping across the industry, and publishers are facing rising supply chain costs and inflation. Publishers’ revenue fell about four percent in the first nine months of this year compared to 2021, according to the American Publishers Association, which tracks sales of 1,368 publishing companies. Hardcover revenue fell 12 percent, indicating that demand for new books is waning. The decline in hardcover sales could be a challenge for publishers during the holiday sales season.
Sales are still above pre-pandemic levels, said McLean of NPD Books, but there are some troubling signs under the surface. Adult literature, for example, has been relatively weak. Although Michelle Obama’s latest book, “The Light We Carry,” continues to be a hit, it generated less than a quarter of the first week sales of her 2018 memoir, “Becoming,” according to NPD. Best-selling author Marie Kondo’s “Kurashi at Home” ranked 4,742 in Amazon’s Friday bestseller rankings. Both books are published by Penguin Random House.
“We’re in a bit of a hold pattern,” said McClain of NPD Books. “It’s a bit of a wait-and-see.”
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