Paramount Global sells Simon & Schuster to private equity firm KKR. Here’s what to know

Iconic American publishing company Simon & Schuster has a new owner. On Monday, the publisher was acquired by private equity firm KKR in a $1.62 billion deal. Here’s what you need to know.

What’s happened? (August 21, 2023), Paramount Global, the owner of Simon & Schuster, announced it would sell the book publisher to private equity firm KKR. The deal is valued at $1.62 billion and comes after Paramount previously tried to sell S&S to Penguin Random House—a sale that was blocked by a federal judge over fears that it would have consolidated power even further in the book industry.
What is Simon & Schuster? Even if you don’t read a lot, you probably know the name. Simon & Schuster is one of the biggest players in the American publishing industry. It was founded 99 years ago and since then has published some of the greatest authors, novelists, and journalists of the 20th century, including John Irving, Doris Lessing, Joseph Heller, F. Scott Fitzgerald, Ernest Hemingway, Bob Woodward, Walter Isaacson, Jackie Collins, Hunter S. Thompson, and Stephen King.
Why did Paramount sell Simon & Schuster? Both for cost-cutting reasons and to free up its coffers to focus on other areas in its entertainment business. In a press release announcing the deal, Bob Bakish, president and CEO of Paramount Global, said, “The proceeds will give Paramount additional financial flexibility and greater ability to create long-term value for shareholders, while also delivering our balance sheet.”
What does KKR plan to do with Simon & Schuster? Obviously, it wants to make money off of its $1.62 billion purchase. When the deal finalizes, Simon & Schuster will become its own stand-alone company. From there, KKR wants to grow the business. In the press release, Paramount said, “In addition to investing in all areas necessary to establish Simon & Schuster as a standalone entity, KKR intends to support numerous growth initiatives, including extending Simon & Schuster’s strong domestic publishing program across various genres and categories, expanding its distribution relationships and accelerating growth in international markets.”
What has KKR said about the deal? Richard Sarnoff, chairman of media at KKR, said, “We see a compelling opportunity to help Simon & Schuster become an even stronger partner to literary talent by investing in the expansion of the company’s capabilities and distribution networks across mediums and markets while maintaining its 99 year legacy of editorial independence. We also believe the opportunity to create an ownership culture within one of the world’s top publishers has enormous potential to create value for all of Simon & Schuster’s stakeholders.”
How do industry players feel about the deal? People have their concerns, as KKR is a private equity company and not a publishing industry player itself. KKR has nearly $700 billion in assets, so its $1.62 billion deal for Simon & Schuster is just a small fish in its ownership pond. Many fear KKR will just see Simon & Schuster as a number on its balance sheet and not as an entity where literary and cultural voices are nurtured and cultivated. The essayist and literary critic Maris Kreizman tweeted, “The fear that we’ll look back on today and think, well, that was the beginning of the end.” Author Mike Jung was even more blunt, tweeting, “KKR, which is possibly the most vile example of a private equity firm that acquires, eviscerates, and kills off companies for profit, is on the verge of buying Simon & Schuster. Very, very bad news”
What’s the next step? Once the deal is finalized, Simon & Schuster will spin off into its own company where its current CEO, Jonathan Karp, will continue at the helm. “With KKR’s support, we look forward to collaborating on new strategies that will enhance our ability to provide readers a great array of books and to give authors the best possible publication they can receive,” Karp said.