On the Houghton Mifflin Harcourt Acquisition Freeze
It’s the news heard ‘round the publishing world (so of course, it happened while I was traveling.) There’s lots of panic and teeth-gnashing, but Colleen Lindsay also advises some necessary caution on the whole Chicken Little atmosphere, since this sort of thing has been happening all the time, just without the fanfare:
Look, when two large publishers like Harcourt and Houghton Mifflin
merge, it only makes sense that they'd put a temporary hold on further
acquisitions until they've had a chance to assess all of the properties
they already own. After all, they've just doubled their editorial
inventory. One thing a newly-merged publisher is going to try very hard
not to do is to cancel
contracts; canceling contracts leads to a lack of confidence in the
publishing company and that's never a good thing.
merge, it only makes sense that they'd put a temporary hold on further
acquisitions until they've had a chance to assess all of the properties
they already own. After all, they've just doubled their editorial
inventory. One thing a newly-merged publisher is going to try very hard
not to do is to cancel
contracts; canceling contracts leads to a lack of confidence in the
publishing company and that's never a good thing.
So if canceling a lot of contracts isn't an option, then what?
A
smart solution might be to just slow down or stop buying for a while.
Take a fiscal breather, as it were. Because the truth is that – right
now – there's probably no room for new manuscripts in Houghton Mifflin Harcourt's inventory.
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And if the rumor's true that this moratorium <a href="http://the-wad.blogspot.com/2008/11/update-on-houghton-mifflin-harcourt.html">will be lifted after the first of the year</a>, perhaps panicking is overrated.
</p>
<p>
Except that let's be honest: if there was an acquisition freeze on at, say, Wiley or Rodale, there wouldn't be nearly as much chatter (consider that <a href="http://www.forbes.com/2008/11/04/magazines-publishing-advertising-biz-media-cx_jea_1104rodale.html">Rodale's layoffs</a> hardly registered on the book front, more as <a href="http://www.foliomag.com/2008/rodale-lays-111">a footnote to the ongoing magazine die-off</a>.) But Houghton Mifflin and Harcourt merging meant squashing together two houses of literary merit with authors whose names are recognized by common people and literati alike. They already went through <a href="http://www.boston.com/business/articles/2008/01/31/publisher_laying_off_employees/">some brutal rounds of layoffs</a> and presented a cheery face just last month, both publicly and in private conversation. So the freeze sends a bad symbolic signal, even if it probably only means taking stock of what's already in play for the next year.
</p>
<p>
So no, we're not in panic mode, not yet. But as long as Riverdeep, HMH's parent company, continues to take a bath and the economy stays moribund (or worsens in the first quarter of '09), the gloom feels rather warranted, even if it's only a metaphorical sign of what may well come in other places.
</p>