Stephen King Says That “Consolidation Is Bad For Competition” In Testimony At Penguin Random House-Simon & Schuster Antitrust Trial

Ted Johnson
·5 min read
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Stephen King took the stand on Tuesday in the Penguin Random House-Simon & Schuster antitrust trial, telling the judge that he volunteered as a witness for the Justice Department because “consolidation is bad for the competition.”

King, in gray suit and gray tie and wearing sneakers, had the courtroom in laughter at moments as he recounted key moments in his career.

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He is the Justice Department’s highest profile witness in its effort to block Penguin Random House’s proposed $2.2 billion acquisition of Simon & Schuster. The DOJ claims that the deal would adversely impact author advances of $250,000 and above for the most anticipated best sellers. The publishers plan to challenge the government’s rationale and methodology for claiming that the transaction would lessen such compensation for writers.

In his testimony, King compared the competitive landscape of today, with the big five publishers, to earlier in his career, when there was an excitement to the book bidding process because so many potential publishers were putting forward offers. The business has consolidated so much, he said, that now it’s about publishers being a bit deferential to other bidders — a gentlemanly “After you. No, after you,” as King quipped.

He also talked about the difficulties for fledgling authors to earn a living based on their advances from independent publishers, which he called “like the minor leagues for writers,” as they compete for bookstore shelf space against the majors. The result has been difficult for writers to earn even enough to live on, with one study showing median income of full time authors at $20,300, below the poverty line, he said.

“It’s a tough world out there now. That’s why I came,” King said.

King also weighed in on Penguin Random House’s pledge that after the acquisition, Simon & Schuster would still be allowed to bid against other PRH imprints. Penguin Random House already allows its imprints to compete against one another when an outside bidder also is involved in the competition for a book title.

“You might as well say you are going to have a husband and wife bidding against each other for a house. It’s a little bit ridiculous,” King said.

But King also said that the rise of the streaming business has opened up a “gold rush” for writers, as “there is this hunger for content, content, content.” He said that screenwriters have been beneficiaries, as well as some book authors, even those who would be at the mid-level. He cited the case of Thomas Perry, who sold his 2017 thriller The Old Man for an FX TV series.

“Good for him,” King said, before quipping, “I am happiest when it happens to me.”

After some laughs in the courtroom, Pan noted, “You have had your share.”

King’s testimony was relatively short: After about 45 minutes of questioning by the government’s attorney, and then a short break, Penguin Random House’s lead attorney Dan Petrocelli told him that they had no questions.

“Am I done?” King asked. He was, and he left the courthouse soon after, signing several autographs outside. Asked how he thought his testimony went, King said, “It went.”

King has been publicly critical of the deal, and said that he voluntarily agreed to testify for the government even though the transaction involves his publisher, Simon & Schuster.

“I’m Stephen King. I’m a freelance writer,” King said as he took the stand. The judge, Florence Pan, said, to some laughter, “We all know who he is.”

The author described starting out in 1974, when he had no agent, but Doubleday offered him a $2,500 advance for Carrie with an option for his second work. That turned out to be Salem’s Lot, for which he was paid $7,500. He did earn from the movie tie in publication of Carrie, but when it came to the feature film, “I’ve never seen a single dollar from the movie.”

As his books took off, he eventually did get an agent, Kirby McCauley, who helped him sell a series of short stories. He also gave King a bit of advice about Doubleday: “We can do better.”

Although King said that he liked his publisher, they were unwilling to greatly increase his advances, as he had established a track record of best sellers that also included The Shining and The Stand.

King recalled a meeting they had with Doubleday executive Robert Banker. When McCauley proposed an offer of three books for $2 million, Banker “laughed and left the restaurant,” King recalled. He eventually landed at New American Library, then a subsidiary of Times Mirror, with hardcover rights going to Viking.

Pan asked King whether he ever went back to Banker, given his abrupt dismissal of the offer. “He retired soon after that,” King said, to laughs in the courtroom.

By then, King said, he could pay the mortgage and pay the bills, and he was “living the dream” as a full-time writer. He eventually parted ways with his publisher, and Chuck Verrill, who was to be his new agent, pointed him to Simon & Schuster’s Scribner imprint, with an unusual deal that was more of a “co-publishing” agreement, King said. It called for him to get 40% to 50% of the sales of his books, versus the traditional 10% to 15%, he said. King also had to share in expenses for such things as publicity and travel, which he was “glad to do.”

“I am the only one I know of who had that kind of deal,” King said.

Through the years, he’s had smaller and independent firms publish some of his works, but they have been in other genres and for smaller advances. Because of his success, he said, “I could afford to do it.”

“There comes a point where, if you are fortunate, you can stop following your bank account and start following your heart.”

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