News broke this morning – and probably broke the smart phones of many employees as well – that Harlequin Publishing is being sold by parent company Torstar to NewsCorp, owner of HarperCollins.
I can't even come up with a gif that expresses my WTF at that one! I don't think anyone saw that coming, eh?
I generally don't get excited about mergers and acquisitions and figure the merging and intermingling of publishing is a thing they do – much like my theory that there are really only six total people in publishing, the rest is done with mirrors, and everyone is required to switch places when someone rings a bell.
Torstar Corporation today announced it has entered into an agreement to sell all of the shares of Harlequin Enterprises Limited to News Corp. It will be run as a division of HarperCollins Publishers, a subsidiary of News Corp.
The purchase price is $455 million Canadian payable in cash at closing. Torstar intends to apply a portion of the net proceeds to debt reduction. The company will retain the remainder of the proceeds pending a thorough review of its future cash requirements and potential investment opportunities….
“Harlequin has been an important part of Torstar over the past 39 years and we are very proud of the global success it has achieved,” said David Holland, President and Chief Executive Officer of Torstar Corporation. “While making the decision to sell has been difficult, we are confident that this transaction represents excellent value for Torstar shareholders and it also further strengthens the financial position of Torstar. This sets the stage for the next chapter in the Harlequin story. HarperCollins is a very well-respected publisher with a tremendous track record of success and will be a good home for Harlequin. The sale will benefit Harlequin in the years ahead by providing the company, its terrific management team and its employees with exciting opportunities to continue to grow.”
“Harlequin has built one of the largest and most widely recognized consumer brands in publishing with a highly focused publishing program for women,” said Brian Murray, President and CEO of HarperCollins. “We are thrilled to welcome Harlequin's management and staff in Toronto and around the world to the HarperCollins family. The Harlequin name and rich heritage will be preserved independently, with the aim to leverage capabilities to bring the book-reading public more choices. Harlequin's business has grown internationally, and will give HarperCollins an immediate foothold in 11 new countries from which we can expand into dozens of foreign languages for authors who choose to work with us globally.”
HarperCollins has indicated that Harlequin will remain headquartered in Toronto, as will the offices of HarperCollins Canada.
“We are excited to be joining HarperCollins Publishers,” said Craig Swinwood, Publisher and CEO of Harlequin. “This transaction will allow Harlequin to continue to operate as a distinct and successful brand within a larger publishing company. We're excited to be able to take full advantage of HarperCollins' robust resources, scale and capabilities to expand the reach of our books and grow our business.”
Ok, first, Craig Swinwood didn't use the word “thrilled,” which is a requirement in any and all press releases from romance publishing. If the word “thrilled” isn't used, it doesn't seem real!
I can't say whether this is “good” or “bad” – right now, I'm stuck on “WTF!” But of course, there are people involved who have spreadsheets that we don't have. And also, this is a truly personal feeling, I would not have predicted Harlequin pairing up with Rupert Murdoch, he of Fox News, phone hacking, and whatall. Harlequin + Cosmo I understood. Harlequin + Rupert Murdoch? That's unexpected.
ETA: Kate Rados has visually illustrated a great deal of the WTF:
As Jane Litte said on Twitter (and I'm sorry I can't link to the tweet itself – the new Twitter layout is confounding me) this could be like Random House + Penguin: big news but nothing majorly OMG disruptive (aside from those whose jobs were made redundant, which is usually a fallout of mergers between like companies, and which sucks entirely for those involved).
But there are also significant corporate culture and publishing policy differences as well. As @Tuphlos and others pointed out:
Harlequin e-books have been available to libraries, fair pricing, NO LOAN RESTRICTIONS.
— Robin Bradford (@Tuphlos) May 2, 2014
Harlequin and HarperCollins have very different approaches to readership, as well. Also interesting: mergers like this, especially across national borders and involving two sets of corporate law take a long ass time, so this has been in the works for awhile – and most everyone seems as surprised as I am. Wow.
As I said on Twitter, I feel like I'm watching a good friend get engaged to a really, really shitty guy. Harlequin + Rupert Murdoch is not the pairing I would have ever predicted. But who knows? This could turn out to be excellent. I do think it's telling that the reaction I've seen immediately following “WTF” is, as Jane called it, “dismay.”
I'm still searching for an adequate gif. I don't think there is one.
What's your reaction?
My reaction was also WTF. Immediately followed by a breathless “NO” and open-mouthed contemplation of everything that can go wrong.
NOOOOOOOOOOOOOOOO!!
Stunned.
Yeah, it was the lack of any rumors until this was announced as a “this is a done deal pending approval from the oversight agencies & shareholders” that was the true shock for me.
I notice that Harper Collins have used the “thrilled” word.
So if HarperCollins already has a romance imprint, WHAT DOES THIS MEAN?!
I am stunned! And not liking this at all. Perchance Torstar didn’t have the stomach to roll with the ebook revolution?
Blimey.
I’m still not really sure what to feel.
So the biggest thing that concerns me is that Harlequin is already being called a subsidiary of HC. Harlequin was great at not having geo restrictions, good pricing, and providing diverse content. I’m viewing this with great trepidation.
@Jane:
Yes. Harlequin as a subsidiary of HarperCollins is giving me a significant eyebrow raise, too.
@Liz:
If HC uses “thrilled” that’s only half the requirement! Harlequin must also respond with an equally positioned “thrilled” for the public acknowledgement and agreement to be effectively sealed. Or something.
And also, as several people have mentioned on Twitter and elsewhere – what this means for the financial terms in future author contracts for both will be interesting.
@Patti:
No, I don’t think so. Harlequin was one of the earliest publishers to simultaneously release the ebook with the print – or a month early, if you bought the ebook from the Harlequin online bookstore. They were ahead of the curve digitally in many, many ways.
Shock and dismay about covers it.
My library rarely buys Avon/HC books in digital because of the price markup/limit on loans. So that’s my big fear (that HC would the the same with Harlequin books). Also closing of lines and adding DRM to Carina books.
If it was a owned by the same company, but operates independently I would be in a better place I think. I cannot imagine how the employees and authors feel.
@libraryaddict:
YES. INDEED. *shudder*
I went to copy your url to send to a friend and ended up opening my tab of “Earth Swallows Entire Block of Baltimore in One Terrifying Gulp” and thought they were pretty much the same tab. Maybe there’s a gif from that.
http://www.towleroad.com/2014/05/earth-swallows-entire-block-in-baltimore-in-terrifying-gulp-video.html
Mostly my concerns are precisely what library addict said.
Also, does this mean Torstar is going under? If they’re selling off 30% of their income, for less money than it brings in over a year or two…doesn’t that seem crazy?
As an independent contractor who works with Harlequin, I have Concerns (selfish concerns. How will this affect meeeeee?). Distracting myself by imagining someone forcing Bill O’Reilly to read a Blaze out loud, on the air.
Never thought I would see Harlequin as someone’s bitch….
Murdoch claims not to have a hands-on approach to his companies, but they end up strangely similar. His business practices can be doubtful, to say the least, but by keeping his distance, he can claim he had nothing to do with it, when the poo hits the fan.
However there is such a thing as corporate culture, and he has used that better than almost any other business person I can think of. The atmosphere where things are “not done” or are not encouraged.
I can’t say I like it. Avon hasn’t improved since News Corp aquired it, or Harlequin’s future parent, Harper Collins. From an author’s point of view, that’s one less publisher to try.
It’s because of Amazon. The worth of all the top five publishers put together doesn’t equal what Amazon is worth. Amazon is still bigger. But with huge setups like News Corp, there’s more of a battle. Random Penguin meant a lot to authors, especially new ones, because there were suddenly a lot fewer places to submit to. They “streamlined” and they’re still doing it.
And I will bet that the royalties authors are getting for their books will continue to be squeezed and will provide massive profits to the publishers.
I saw this on Twitter first thing, and I wanted to go back to bed and start the day over.
While I have serious concerns about Harlequin being acquired by News Corp for so many reasons, I’m actually not entirely surprised by this. Torstar has had a lot of problems over the past 10-15 years as the consumption of newspaper has declined, and it has not adapted to online effectively until relatively recently. Harlequin was the division essentially propping up the company, so when Harlequin revenues started to slide, it must have caused a panic. Selling the division while it’s valuable provides Torstar capital to overhaul their core business without having to shortchange shareholders or going deeper into debt.
http://www.marketingmag.ca/news/media-news/torstar-corp-sells-harlequin-book-publishing-company-to-news-corp-for-455m-109717
I’m very concerned about the library changes. Carina seems to be one of the few (only?) e-only publishers that libraries buy, often through Overdrive. I’ve been excited to watch my Carina debut show up in the colletions of libraries across the country, NYC, Cincinnati, LA, my own town of Seattle. It’s a wonderful, wonderful way for new authors to reach people. I am very worried that won’t happen if Carina’s library sales are changed to fit MegaCorp’s rules. And I think category authors should be very worried about that too – libraries are still consistent buyers of category, and it’s a way new readers come to category – and category needs new/young readers.
Going indie doesn’t get you into libraries. Many/most have policies that make it very hard for them to add self-published or indie published books to their catalogs (can a librarian weigh in on that?). And I want my book to be in libraries – I want people who can’t buy very many books to read it – I grew up devouring library books. I want other high school kids waiting tables for less than minimum wage b/c they’re in a freaking tipped position (HA! Don’t get me started on that!) to be able to read a book a day b/c libraries exist with lots of books, including mine.
So I really, really really hope Harlequin’s library-friendly policies continue. But I’m worried.
Being in Canada affected Harlequin’s bottom as much as digital publishing margins, I think. When the Canadian dollar was strong, Harlequin suffered severely, and Torstar with it. That might have been the beginning of the end right there.
I’m hoping this transaction isn’t actually a done deal, because there are all sorts of government approvals and competition guidelines it has to meet first, including making sure there are still enough publishers in Canada that are actually Canadian after it all pans out. Which there won’t be, but I don’t think our current government could care less, so I won’t hold my breath. This will have repercussions for many of my friends somewhere down the road, and that alone makes me sad.
Does this potentially mean changes for Carina Press, too?
I don’t have strong feelings about this since I don’t read much of anything published by Harlequin (Carla Kelly being the notable exception).
As an intellectual-property law firm employee for 20+ years, I applaud the firms involved for keeping this quiet. It is not all that easy to do.
As a publishing-industry watcher, I’d just encourage people to remember that while Rupert Murdoch comes across as a pretty vile beast, and some of his properties have engaged in vile practices, he also owns Fox Broadcasting which is airing “Cosmos.” Not everything he touches turns to shit, in other words. 🙂
Think that Harlequin’s method of doing the publishing business is simply past its prime. No new lines or branding is going to change the fact that there are now options for authors-new and experienced-who have done their homework and have decided to put creativity and financial gain over wide distribution and brand recognition. Crappy contracts that can’t be broken are so 2005. Also, as someone who is associated with libraries and librarians, at least in my neck of the woods, it is actually getting easier to get self-published works into circulation. However, it is important to go about it the right way and most library systems have posted methods of submission and/or inquiry online, which need to be followed. All libraries in the US are adopting a “retail approach” to promoting the circulation of their paper materials, and librarians are nothing if not tech savvy these days, so I think that the big ol’ glass of vodka & lemonade is more than half full.
LG – Carina authors received an email from Angela James this morning saying no changes, business as usual – very brief, which I actually found more comforting than a long flowery assertion.
Honestly, I don’t expect any changes immediately (0 – 9 months). Other than distractions and maybe, who knows, a little poaching from other publishers? But no big changes until it’s sealed, right?
I’ve been through an acquisition as an employee – in the legal publishing industry – many years ago. In the end it involved an office tontine (love that word – thank you, Georgette Heyer!) on who would be last person standing. I was ninth from the end, didn’t get the money.
On a related side note, I’m in my 40s and only two places I’ve worked still exist. Two law firms, two entire military installations, two restaurants, a legal publisher, all gone. Now Harlequin. The only places where I worked that still exist are one McDonalds and one military unit. I drove my kids past some of the places I’ve worked. One of them has been reforested and seriously does not even have a footprint of a building anymore. Wiped away.
I don’t think my track record is very auspicious. Sorry, fellow Carina writers. It’s my fault!
Rightly or wrongly I have always seen Harlequin as a distinct type of romance book all its on. I don’t read Harlequins as much as I once did but when I am in the mood for a Harlequin glom nothing else will do. I worry now about them losing that distinct feel that makes them Harlequin.
@Anna Richland – Oh, I hope so. I buy DRM-free only, and I’d hate for Carina to have to be removed from my list of “okay publishers.” Although I may start working on buying up my Carina wishlist anyway, just in case…
I have an unscientific answer to the question about libraries and self-published books. I asked a bunch of librarians this question recently, but it wasn’t a representative sample and those who answered were self-selecting, so take what I saw with those caveats.
Generally the librarians said they will buy a self-pubbed book like any other book, according to their acquisitions policy (here’s the one at my library, for example). Usually the acquisitions policy also covers donated books, should you want to gift a book to the library. The big hurdle for self-pubbed authors in libraries is getting into “the sources” (Booklist, Kirkus, Library Journal, PW, etc), which is what most libraries use to select their books (along with reviews in the NYTimes and bestsellers lists). Also, as book budgets have tightened, buying a new author as opposed to buying the new book of an author with solid circulation statistics is a risk. Especially an author without solid reviews behind their book (Amazon reviews are NOT solid reviews).
Most libraries also have a policy about buying on request, so if people request your book then libraries will often (not always) buy it. Libraries also consider local interest when deciding what books to buy, and that doesn’t just mean local authors but also what’s popular in a certain area (one librarian mentioned that they will buy almost anything with Bigfoot, so you Bigfoot erotica writers should be sending books to libraries near sightings of Bigfoot).
Distribution is difficult. If you want your self-pubbed book in a library, make sure that a jobber (Baker and Taylor, Ingram, etc) carries it. Many libraries don’t buy books from Amazon unless it’s a special case and your self-pubbed book isn’t going to be a special case for those libraries.
Ebook distribution is the bigger hurdle. Overdrive is a pain to get into, thought apparently you can donate your book to a specific library through Overdrive. There are other ebook options out there for libraries, but Overdrive is the big player.
I’ll also add a note that the librarians who answered all included a plea for self-pubbed books to be as well-edited and presented as a NY-pubbed book. This gets said over and over and over on many different venues, but librarians are spending public funds and have an obligation to spend those public funds as wisely as possible. A poor quality product is going to make everyone angry (and yes, this applies to those poorly edited books that make it out of NY; those piss librarians off too). And please think about your cover.
If anyone will be at RWA, Laura Florand and I will be talking about the relationship between libraries and authors at Librarian’s Day (and we will specifically be talking about self-publishing). We’ll also be brainstorming ideas and strategies for both authors and libraries.
Jennifer Lohmann, I agree with your completely satisfying “unscientific” answer. A quality product is key-although there are some fun blogs out there that have visual evidence to the contrary-and the process is still complicated by a lack of funding and by the companies who sell to libraries. My rose-colored assessment has surely been influenced by having the good fortune of living in several areas of the country that apparently have supremely enlightened librarians in charge of buying romantic fiction and/or work within systems with relatively deep pockets. Sounds like a great panel that you’re doing at RWA. Wish I was attending….next year, next year *fingers both crossed and typing*
If they were going to sell out to a larger publishing house I would have rather have seen them go to Macmillan.
My first thought—-we won’t be able to buy Harlequin books on Kobo with coupons anymore? Arrggghhh!!!
FYI, the Kate Rados link is redirecting me to ad sites.
I for one am really sad, Harlequin was one of the very few BIG publishers that even had international readership on their radar – you could get basically all of their books off their website at the same price as everyone else, no weird or unexpected geo-restrictions or anything.
HarperCollins on the other hand well… let’s just say I don’t have the best track record with them as an international reader/reviewer.
Still, I’m crossing my fingers for situation similar to Random-Penguin rather than a on full debacle