Simon & Schuster staffers are furious that their Christmas party has been canceled yet again by the company they call the Scrooge-like investment giant that owns the famous book publisher, the Post reports. Reported.
The much-anticipated annual shindig was canceled as a “tense exercise” by Wall Street financial giant KKR, which acquired the company for $1.6 billion in 2023, according to people familiar with the 100-year-old publisher. .
“They're not having a big company-wide party this year because prices are low,” one source told the Post.
The public disappointment follows last year's cancellation of a lavish Manhattan party planned to celebrate the company's 100th birthday in April after S&S executives pointed out A source told the Post.
“We're going to have to sell a lot of books to pay for this party,” Simon & Schuster CEO Jonathan Karp awkwardly joked in a speech at a fancy soirée. said.
One attendee told the Post: The joke was all too real. ”
Now, the publisher of Colleen Huber's recent international bestseller, author of “It Ends With Us,” is rolling out an excuse for canceling an April party because she canceled this year's year-end gathering. said an official.
An executive close to Mr. Karp told the Post that employees should not expect the company's Christmas party to be held again next year.
“Jonathan doesn't think a Christmas party is the best way to celebrate,” a source said.
Some hard-working staffers at the Simon & Schuster sub-brand known in the publishing world as “imprint” are throwing a more low-key party of their own, knowing the ax will fall again.
“A canned Christmas party is usually a red flag for reduced profits and cost cutting,” said one industry source.
But executives at the Rockefeller Center-based publisher insisted that “everything is fine,” adding that KKR is investing heavily in editorial.
Senior executives said any proposals to crack down on spending at the behest of the new private equity lords were “not correct”. KKR had $271 billion in assets under management as of September. According to the company.
A KKR spokesperson declined to comment. A spokesperson for Simon & Schuster also declined to comment.
KKR agreed to acquire S&S from Paramount Global in 2016. August 2023. The media giant, which agreed to an $8 billion merger with independent studio Skydance that is scheduled to close next year, has been trying to offload publishers for three years so it can focus on its video streaming and entertainment interests.
As the United States emerges from the post-coronavirus economic downturn, book publishers face several challenges, including increased competition from digital rivals and rising production costs.
In Simon & Schuster's last earnings release before going private, sales for the third quarter of 2023 were down 13% year over year to $307 million.
Operating profit, a key measure of profitability that takes into account operating expenses such as office rent and wages, fell 35% to $60 million compared to the same period in 2022.
As a privately held company, S&S does not disclose its financial results, but in its last reported financial results, Karp pointed to Hoover's sales peaking in 2022 as a reason for the company's slightly weak performance. did.
The acquisition of KKR comes after the Biden administration's Department of Justice filed a lawsuit in November 2021 to block a $2.2 billion bid by rival Penguin Random House on antitrust grounds.
Just a year later, District Court Judge Florence Pan ruled that the merger of the two publishing giants would unlawfully reduce competition.
Both companies are part of the so-called Big Five publishers, which also include Hachette, Macmillan and HarperCollins, part of the Post's parent company, News Corp.
A lawsuit filed in Delaware in August by a union pension fund claims that two of KKR's surviving founders, Henry Kravis and George Roberts, received $650 million in salaries without working. He was accused of having obtained it.
The pair will retire in October 2021, handing over the reins of the company to co-CEOs Scott Nuttall and Joseph Bay in a complex deal that hands them millions of shares. I collected a huge amount of money.
Kravis and his cousin Roberts decided to form KKR over dinner at a midtown Italian steakhouse in 1976, jotting down ideas on napkins that would become today's private equity industry.
Their attempt to buy tobacco company RJR Nabisco in 1988 due to debt was the subject of a book by two Wall Street Journal reporters and an HBO movie titled Barbarians at the Gate. created.
The two 80-year-old corporate raiders now have an estimated combined net worth of $36 billion.
Along with fellow founder Jerome Kohlberg Jr., who passed away in 2015, they became known as the godfathers of leveraged buyouts.
In other words, an investment company makes a loan to rebuild a company and then pledges the company's assets and future profits as collateral for the loan.
