Penguin Random House chief quits after Simon & Schuster deal collapses
Markus Dohle, the longstanding chief executive of Penguin Random House, has quit the world’s biggest book publisher after failing to secure antitrust approval to buy US rival Simon & Schuster.
German media group Bertelsmann, the parent of PRH, said it regretted the decision taken by Dohle, who oversaw 15 years of expansion that gave the publisher an outsized presence in the global book trade, with authors from Barack Obama to Toni Morrison.
Dohle is the first executive at Bertelsmann, Europe’s biggest media group, to take the blame for a series of abortive deals that have collapsed because of adverse market moves or negative antitrust decisions. The failed $2.2bn publishing megamerger with Simon & Schuster cost Bertelsmann $200mn in termination fees alone. In October Bertelsmann called off the auction of its French television broadcaster M6 after regulatory demands left too narrow a window to complete the sale.
In a message to staff on Friday, Dohle said he was “proud” of what the company had achieved but had realised that, once his merger plans had been blocked, it was time “to hand over the next chapter of Penguin Random House to new leadership”.
Dohle, an engineer by training who rose through Bertelsmann’s printing and distribution business, will be replaced at the end of the year by chief operating officer Nihar Malaviya, who has been asked to lead the publisher on an interim basis while a permanent successor is chosen.
Defying doom-laden predictions about the future of books in a digital era, PRH’s ambitious dealmaking and modest but steady growth has epitomised what has been called the “print revival”. But PRH’s size has raised growing concerns about an unhealthy concentration of power of the five largest book publishers over advances and prices.
A US federal judge blocked the tie-up with Simon & Schuster last month after a Department of Justice lawsuit alleged the combined group would wield an anti-competitive control over more than two-thirds of the market for acquiring publishing rights. The deal would have spanned authors ranging from EL James and Stephen King to George Orwell and F Scott Fitzgerald.
Dohle was seen by Bertelsmann as the architect of the tilt at Simon & Schuster, as well as the manager responsible for its execution. Within PRH, while the failure was seen as a trigger for Dohle’s departure, one insider said that after 15 years a change of leadership was overdue.
Christoph Mohn, chair of Bertelsmann’s supervisory board and representative of the dynasty that owns the group, expressed “regret” over Dohle’s decision to leave, saying the company’s book division had “doubled its revenues and quintupled its profit” under his leadership. “The fact that our global book publishing group is in such a strong position today is largely thanks to Markus Dohle,” he added.
Malaviya, a soft-spoken executive who grew up in Rajkot, India, an hour’s walk from the nearest library, is expected to be contender for the top job. Madeline McIntosh, head of PRH’s US arm, is also tipped to be among the other internal candidates.
Thomas Rabe, Bertelsmann chief executive, described Malaviya as an “outstanding leader” who would continue to develop the company “both organically and through acquisitions”.