There’s potentially a new mega-publisher as ViacomCBS has struck a deal to sell Simon & Schuster to Penguin Random House. The deal is for more than $2 billion. Penguin Random House is owned by the German media conglomerate Bertelsmann. The deal is not a given as Simon & Schuster is the third largest publisher and the purchase raises antitrust concerns.

If the deal fales, ViacomCBS has a termination fee that Bertelsmann would need to pay. The deal will go before the Biden administration which may be tougher than the current Trump administration but we’ll see.

Simon & Schuster is actually doing well as revenue grew to $649 million through September, an 8% increase, and profit before tax increased by 6% to $115 million. The deal allows ViacomCBS to pay down its $21 billion dept and keep up dividend payments to shareholders. The move is one that’s being seen across the media landscape as megacorporations make cuts or sell divisions to cut costs and pay down debts after large acquisitions.

The deal has a ripple effect in the comic industry as well. Simon & Schuster is the exclusive distributor of BOOM! Studios, Oni Press, and Rebellion to bookstores. Penguin Random House is the exclusive distributor of DC Comics, Dark Horse, and IDW Publishing graphic novels to bookstores. The merger consolidates a distribution channel which has a potentially negative impact on negotiations between publishers and distributors but creates a more favorable position between the distributor and retailers.

Ironically, the comic industry has had concerns over distribution monopolies for years with Diamond Comic Distributors cornering the direct market to comic shops for years until 2020. DC Comics ended their exclusive deal with Diamond splitting distribution between UCS Comic Distributors and Lunar Distribution. DC ended its distribution through UCS creating a new “monopoly” through Lunar and creating a $500 minimum monthly order. Now, if this merger goes through, the bookstore distribution options will shrink narrowing choices though we’ll see if similar concerns are raised by the industry as have been raised in the past.