Nick Mamatas was kind enough to tip me off to a fascinating writeup by Dennis Johnson, co-founder of Brooklyn indie publishing stalwart Melville House, on a story that knocks another hole in Hachette’s credibility as the self-styled defender of cultural and literary values against the encroachment of Amazon. As Johnson tells it, Hachette Book Group’s just-collapsed deal to buy Perseus Books Group, long owned by private equity fund (not hedge fund as Johnson describes it) Perseus LLC, would have involved jettisoning the cluster of often highly-regarded indie publishers that it aimed to sell with the acquisition’s distribution business, to U.S. distributor Ingram Content Group.
Coverage of the putative deal in the Wall Street Journal and elsewhere couldn’t seem to get off the subject of how this transaction would help Hachette bulk up in its faceoff against Amazon – with sideswipes at Amazon’s continued penalizing of Hachette publications. Presumably all those journos are now having to backtrack, but Johnson has a different take on the real story.
Recounting his personal experience of the 2007-08 deal that created Perseus Books Group, Johnson notes that: “a hedge fund had thereby taken over about 80 percent of the distribution of indie publishers in America … And it was a disastrous takeover for some of us … Flash forward a mere seven years and a similar story about control of the distribution of many of our leading indie publishers is once again being buried. That is, it should have been part of the story of yesterday’s sale of Perseus to Hachette, but it really wasn’t.”
The assets that would have gone to Ingram, he observes, included distribution of Melville House itself, City Lights, Bellevue Literary Press, and Grove Atlantic – just a few standouts among some 400 small houses. Given these entities’ scale and resources, the rights include “the business of warehousing their books, selling them to the trade, and collecting the fees for all that” – in other words, a sizeable chunk of their entire marketing and distribution effort. The whole business would have brought Ingram about $300 million per year.
Johnson is of two minds about how the indies would have fared with Ingram, but he does feel that “all those great indies may indeed be better off to be out of the clutches of the Perseus hedge fund.” As it is, they’re still there for now until Perseus finds another buyer. Hachette itself, though, apparently couldn’t have cared less about them. Its supposed allies in the Authors United claque might want to reflect on that – if they honestly cared for literary values and even fine publishing in the first place.