The trial put the inner workings of the company on public display in sometimes unflattering ways. In his testimony, Dohle argued that success in publishing is driven by instinct and random luck, not necessarily a company’s size — an argument that the judge found unconvincing. And he revealed his dissatisfaction with the company’s performance since the 2013 merger.
The deal with Simon & Schuster’s parent company, Paramount, included a $200 million termination fee if the acquisition did not go through. The costs of defending against the government’s lawsuit were also significant.
Dohle was the first chief executive of the combined Penguin Random House, and was chief executive of Random House before that. He began his career with Bertelsmann in 1994, managing the company’s book distribution business, and quickly rose through the ranks. As the head of Penguin Random House, he oversaw the company’s expansion of its printing capacity and distribution network at a time when many in the industry predicted that the print business would contract and e-books would become dominant. The supply chain investments proved enormously successful, as print sales not only recovered but surged.
“He’s consistently delivered profits for the company, but more importantly, he’s brought a kind of buoyancy and optimism to the industry,” said the literary agent Elyse Cheney, who testified as a witness for Penguin Random House at the trial. “He prioritized the important social role that books play in the culture.”
During the pandemic, Penguin Random House and other large publishers saw a surprising jump in book sales that delivered record-breaking profits. In 2021, Penguin Random House sold 700 million copies of its books and reported record revenues.
But this year, sales have softened across the industry, and publishers are facing rising supply chain costs and inflation. Publishers’ revenues dropped by nearly four percent in the first nine months of this year compared to 2021, according to the Association of American Publishers, which tracks sales from 1,368 publishing companies. Hardcover revenues fell by 12 percent, signaling that the demand for new books is slipping. The dip in hardcover sales could pose a challenge for publishers during the holiday sales season.
McLean of NPD Books said that sales are still above prepandemic levels, but there are some troubling signs below the surface. Adult nonfiction, for example, has been relatively weak. While still a significant hit, Michelle Obama’s most recent book, “The Light We Carry,” had less than one quarter of the first week print sales of her 2018 memoir, “Becoming,” according to NPD. “Kurashi at Home,” by the best-selling author Marie Kondo, was No. 4,742 in Amazon’s best seller rankings on Friday. Both books were published by Penguin Random House.
“We’re in a little bit of a holding pattern,” said McLean from NPD Books. “It’s a little bit of wait and see.”