Simon and Schuster CEO Jonathan Karp is touting the “commitment to growth” promised by investment firm KKR. But cost cutting fears are always just a bean count away: “How much leaner can they get? We’re about to find out.”
In the newspaper world, a sale to private equity tends to feel like a funeral, with ink-stained wretches lamenting the slow and painful death of their industry. In the adjacent world of book publishing, the news this week that KKR would acquire Simon & Schuster from Paramount Global hardly seemed so grim.
“In the spring of 2023, we began a series of fascinating and stimulating conversations with members of KKR’s Media and Entertainment industry team about every aspect of our business, reflective of their keen interest in acquiring our company.
Karp, who is one of the most successful people in publishing, has good reason to celebrate on a personal level. If S&S had gone to, say, HarperCollins, it’s possible he might have found himself the odd man out. In either case, of course Karp was going to convey an upbeat assessment to his 1,600-plus worker bees, who have essentially spent the past two and a half years in limbo.
Still, there’s reason to believe that Karp’s happy talk isn’t just hot air. Exhibit A: the involvement ofwho leads KKR’s media and entertainment team. Sure, Sarnoff’s undergraduate art history degree from Princeton suggests he’s a cultured fellow and not just some soulless finance shark. But it’s a different notch on his résumé that is most germane to the matter at hand: Sarnoff himself is a former book-publishing executive,As far as I can tell, the man has a good rep.
The icing on the cake is that the S&S crew will get an ownership stake once the sale closes. For context, as part of KKR’s flip of the audiobook company RBmedia, now beingto the investment firm H.I.G. Capital, the average payout once the ink dries is expected to be a year’s pay or a minimum of $50,000.
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