# Simon & Schuster Bought by Private Equity **URL:** \ **Category:** Cafe Society\ **Tags:** books-writing-myths\ **Created:** [August 8, 2023, 11:49am UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242 "2023-08-08T11:49:01Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Quimby](https://avatars.discourse-cdn.com/v4/letter/q/22d042/32.png) [@Quimby](https://boards.straightdope.com/u/Quimby)\ **Post date:** [August 8, 2023, 11:49am UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/1 "2023-08-08T11:49:01Z")
After the merger with Penguin was rejected (rightly), a private equity firm has bought them. It will be sad to see such a long time company that brought me lots of joy in reading get looted into oblivion by vultures. ---
**Author:** ![CalMeacham](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/calmeacham/32/35_2.png) [@CalMeacham](https://boards.straightdope.com/u/CalMeacham)\ **Post date:** [August 8, 2023, 11:58am UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/2 "2023-08-08T11:58:54Z")
> [@Quimby](#): > > It will be sad to see such a long time company that brought me lots of joy in reading get looted into oblivion by vultures. Is it clear that this is what will happen? None of the news stories I’ve heard suggested that this was the case. Why throw out one of the very few remaining book publishers in the country? ---
**Author:** ![PastTense](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pasttense/32/14550_2.png) [@PastTense](https://boards.straightdope.com/u/PastTense)\ **Post date:** [August 8, 2023, 12:12pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/3 "2023-08-08T12:12:49Z")
Some articles: > **[Simon & Schuster purchased by private equity firm KKR for $1.62 billion](https://apnews.com/article/simon-schuster-kkr-book-publishing-penguin-random-house-797c3f383bfc1e60ea9a9bd48c6abfab)** > > Simon & Schuster has been sold to the private equity firm KKR, months after a federal judge blocked its purchase by rival publisher Penguin Random House because of concerns that competition would shrink the book market. Paywalled New York Times and Washington Post: [https://www.nytimes.com/2023/08/07/books/booksupdate/paramount-simon-and-schuster-kkr-sale.html](https://www.nytimes.com/2023/08/07/books/booksupdate/paramount-simon-and-schuster-kkr-sale.html) > **[Simon & Schuster acquired by private-equity firm KKR](https://www.washingtonpost.com/books/2023/08/07/simon-schuster-kkr-private-equity/)** > > Paramount's previous attempt to sell the company to Penguin Random House failed after a federal judge blocked the deal last year. Remember private equity has had a very negative impact on newspapers. I would guess the biggest concern would be that Simon & Schuster would increase its emphasis on blockbusters and quit publishing culturally important, but not profitable books. And note a number of firms bought by private equity have been loaded up with so much debt that they become unprofitable and go out of business (for example Toys R Us). ---
**Author:** ![Cervaise](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cervaise/32/16693_2.png) [@Cervaise](https://boards.straightdope.com/u/Cervaise)\ **Post date:** [August 8, 2023, 12:21pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/4 "2023-08-08T12:21:31Z")
Toys R Us was in fact destroyed and looted by the same KKR that has now acquired Simon & Schuster. > **[The Demise of Toys 'R' Us Is a Warning](https://www.theatlantic.com/magazine/archive/2018/07/toys-r-us-bankruptcy-private-equity/561758/)** > > The private-equity companies swooping in to buy floundering retailers may ultimately be hastening their demise. I would not be optimistic about the publisher’s future. ---
**Author:** ![Just\_Asking\_Questions](https://avatars.discourse-cdn.com/v4/letter/j/ba9def/32.png) [@Just\_Asking\_Questions](https://boards.straightdope.com/u/Just_Asking_Questions)\ **Post date:** [August 8, 2023, 2:23pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/5 "2023-08-08T14:23:26Z")
> [@PastTense](#): > > And note a number of firms bought by private equity have been loaded up with so much debt that they become unprofitable and go out of business (for example Toys R Us). Can someone explain why one would buy a company and destroy it? What’s the point? Does it make sense business-wise, or are they just…bad businessmen? Like they’re playing Monopoly, but badly? “Look, I own all these companies!” “But they’re all broke or hemorrhaging cash.” ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [August 8, 2023, 2:31pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/6 "2023-08-08T14:31:53Z")
The point is to make money. Whether the company survives isn’t relevant. ---
**Author:** ![Banquet\_Bear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/banquet_bear/32/373_2.png) [@Banquet\_Bear](https://boards.straightdope.com/u/Banquet_Bear)\ **Post date:** [August 8, 2023, 2:36pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/7 "2023-08-08T14:36:38Z")
> [@Just\_Asking\_Questions](#): > > Can someone explain why one would buy a company and destroy it? …to make lots and lots and lots and lots and lots and lots and lots of money. ---
**Author:** ![Just\_Asking\_Questions](https://avatars.discourse-cdn.com/v4/letter/j/ba9def/32.png) [@Just\_Asking\_Questions](https://boards.straightdope.com/u/Just_Asking_Questions)\ **Post date:** [August 8, 2023, 2:37pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/8 "2023-08-08T14:37:06Z")
> [@Dewey\_Finn](#): > > The point is to make money. How? Volume? T’RU went bankrupt. Taking a company making money and having it lose money until there’s none left doesn’t seem like a way to “make money”. I guess I’m not a genius billionaire. That’s why I asked. ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [August 8, 2023, 2:43pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/9 "2023-08-08T14:43:17Z")
> [@Just\_Asking\_Questions](#): > > T’RU went bankrupt. Yes, but the assets of T’RU were looted and sold, making money for the investors. What was left went bankrupt, and all the debts went _poof_, but the money was already gone. ---
**Author:** ![Banquet\_Bear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/banquet_bear/32/373_2.png) [@Banquet\_Bear](https://boards.straightdope.com/u/Banquet_Bear)\ **Post date:** [August 8, 2023, 2:49pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/10 "2023-08-08T14:49:44Z")
> [@Just\_Asking\_Questions](#): > > How? Volume? T’RU went bankrupt. Taking a company making money and having it lose money until there’s none left doesn’t seem like a way to “make money”. I guess I’m not a genius billionaire. That’s why I asked. > [@Mother Jones](#): > > For a long time, corporations worked in the plain way that you’d imagine they _should_ work: They created a product or provided a service, and if they did a good job of it, they turned a profit. ­Houdaille, for example, grew to be a valuable company by making first-rate car parts. Simple enough. > > But a confluence of factors in the 1970s flipped that model on its head. Suddenly, the value of a business was measured less by how well it served its customers, and far more by the profits it reaped for its investors. > > … > > Houdaille “was a wake-up call,” says Eileen Appelbaum, co-director of the Center for Economic and Policy Research. Wall Street firms, she says, were giddy at the discovery that **they could load companies up with debt they’d never be responsible for paying down themselves and take an ample cut of the proceeds that came from stripping a company bare—and it was all legal.** > > … > > Soon, businesses came to be viewed less as productive enterprises and more as bundles of assets to be bought, sold, and endlessly manipulated for financial gain. Rather than doing the hard work of investing in new value—innovative products or fresh approaches to societal problems—financiers began focusing on ­extracting existing value, again, and again, and again. > > … > > Multiple studies have also [found](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3465723) that private equity buyouts drive down wages at acquired companies, even when productivity increases. Private equity firms wreak this havoc while charging their investors steep fees—about $230 billion between 2006 and 2015, [according to](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3623820) one estimate. > **[How private equity gobbled up the US economy—and ruined life for everyone else](https://www.motherjones.com/politics/2022/05/private-equity-buyout-kkr-houdaille/)** > > Billionaires are looting the country, leaving everyday Americans to clean up the mess—and fight for the scraps. ---
**Author:** ![Just\_Asking\_Questions](https://avatars.discourse-cdn.com/v4/letter/j/ba9def/32.png) [@Just\_Asking\_Questions](https://boards.straightdope.com/u/Just_Asking_Questions)\ **Post date:** [August 8, 2023, 2:57pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/11 "2023-08-08T14:57:11Z")
Thanks. It seems like it wouldn’t work in the long term (eventually, no one will be willing to lend money, or the bankruptcy insurance will stop insuring, or the government will stop bailing them out. Someone has to be losing money in this process), but, here we are. ---
**Author:** ![Banquet\_Bear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/banquet_bear/32/373_2.png) [@Banquet\_Bear](https://boards.straightdope.com/u/Banquet_Bear)\ **Post date:** [August 8, 2023, 3:00pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/12 "2023-08-08T15:00:15Z")
> [@Just\_Asking\_Questions](#): > > It seems like it wouldn’t work in the long term …it doesn’t _need_ to work in the long-term. It needs to work long enough that all of the vultures can make their money, then move on. It isn’t sustainable. It isn’t logical. It doesn’t make any sense. They don’t _care_. ---
**Author:** ![Banquet\_Bear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/banquet_bear/32/373_2.png) [@Banquet\_Bear](https://boards.straightdope.com/u/Banquet_Bear)\ **Post date:** [August 8, 2023, 3:05pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/13 "2023-08-08T15:05:44Z")
> [@Banquet\_Bear](#): > > …it doesn’t _need_ to work in the long-term. …and the other thing to note is how effective the propaganda is around all of these things. Many people are still convinced that Toys R Us failed because they “didn’t adapt with the times” and not that it was “loaded with debt and stripped for parts.” And the same will happen when Simon & Schuster inevitably destructs. ---
**Author:** ![Jackmannii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackmannii/32/311_2.png) [@Jackmannii](https://boards.straightdope.com/u/Jackmannii)\ **Post date:** [August 8, 2023, 3:07pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/14 "2023-08-08T15:07:26Z")
I’d feel a bit more angst over Simon & Schuster’s potential fate if it wasn’t guilty of encouraging terrible anti-science books. S&S has a warehousing and distribution deal with Skyhorse Publishing, which has a sizable catalog of antivaccine books, including one aimed at kids titled “I’m Unvaccinated And That’s OK!”. Simon and Shuster [caught hell earlier this year](https://www.salon.com/2023/03/22/public-health-advocates-demand-simon-and-schuster-stop-distribution-of-aids-denialism-book/) for distributing an HIV/AIDS denialist book. If S&S goes down, Skyhorse will have to find another enabler. ---
**Author:** ![Dallas\_Jones](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dallas_jones/32/3277_2.png) [@Dallas\_Jones](https://boards.straightdope.com/u/Dallas_Jones)\ **Post date:** [August 8, 2023, 3:50pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/15 "2023-08-08T15:50:40Z")
Small irrelevant note; the Simon of Simon & Schuster was singer Carly SImon’s father. ---
**Author:** ![Cervaise](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cervaise/32/16693_2.png) [@Cervaise](https://boards.straightdope.com/u/Cervaise)\ **Post date:** [August 8, 2023, 3:51pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/16 "2023-08-08T15:51:17Z")
For another recent example, Instant Pot was a good manufacturer with an excellent popular product when it was bought by a private equity firm in 2019. Now it’s bankrupt and dead. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [August 8, 2023, 4:02pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/17 "2023-08-08T16:02:18Z")
I don’t think IP fits the model exactly. They had one basic product with a small number of add ons. Nearly everyone who wanted one bought one, mainly in a bubble, and they tried but couldn’t innovate any new products. ---
**Author:** ![SCAdian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/scadian/32/3292_2.png) [@SCAdian](https://boards.straightdope.com/u/SCAdian)\ **Post date:** [August 8, 2023, 4:08pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/18 "2023-08-08T16:08:08Z")
At least it’s not the arsehole who ruined Sears. ---
**Author:** ![Darren\_Garrison](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/darren_garrison/32/92_2.png) [@Darren\_Garrison](https://boards.straightdope.com/u/Darren_Garrison)\ **Post date:** [August 8, 2023, 4:12pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/19 "2023-08-08T16:12:24Z")
Maybe someone could introduce KKR to a hooker with a heart of gold. ---
**Author:** ![Cervaise](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cervaise/32/16693_2.png) [@Cervaise](https://boards.straightdope.com/u/Cervaise)\ **Post date:** [August 8, 2023, 4:15pm UTC](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242/20 "2023-08-08T16:15:26Z")
IP was doing fine until the PE firm insisted on growth. [Next page](https://boards.straightdope.com/t/simon-schuster-bought-by-private-equity/988242.md?page=2)