News Corp is acquiring the books and media segment of publishing company Houghton Mifflin Harcourt (HMH) which owns titles such as The Lord of the Rings and Animal Farm.
The business is being acquired by News Corp for US$349 million in cash and is subject to regulatory approval, with the acquisition set to close in the fourth quarter of fiscal 2021. HMH Books & Media will sit within News Corp’s publishing business HarperCollins, expanding it by more than 7,000 titles.
News Corp says backlists, older books which are still in print, are a “sustainable and growing” source of revenues, high margins and cash flow for publishers. Last year more than 60% of HMH Books & Media revenues were generated by its backlist which include titles such as The Lord of the Rings trilogy, 1984, and All the King’s Men.
“There is a resurgence in reading and listening to books, and we believe the brilliant HMH Books & Media backlist and first-rate frontlist have an enduring and increasing value,” says News Corp chief executive Robert Thomson.
“Timeless writing is a timely source of revenue and the potential to create highly profitable audio and video works flourishes with each passing digital day.
“The HarperCollins collection will be bolstered for children and young adults, and authors around the world will have a larger platform for their creativity and ingenuity. It is crucial to expand in an era in which emerging monopolies threaten the creative marketplace, so we welcome J.R.R. Tolkien, Virginia Woolf, George Orwell and many, many other distinguished writers to HarperCollins.”
HarperCollins expects to realise immediate cost savings, accumulating to more than $20 million annually within two years, including manufacturing, distribution and other cost efficiencies. HarperCollins also anticipates revenue synergies by leveraging its global scale and further expanding licensing opportunities.
“Combining HMH Books & Media’s strong catalog with HarperCollins’s global platform will allow for increased investment in HMH Books & Media’s trade programs and we expect faster growth of the combined companies at a time of rapid growth in book consumption,” says HarperCollins Publishers president and CEO Brian Murray.
“Joining HMH Books & Media’s media productions team and the HarperCollins Children’s global catalog will open up new animation and gaming opportunities as we look to accelerate the expansion of our IP across multiple formats.”
Earlier this week News Corp in the US also acquired Investor’s Business Daily for US$275 million. The digital-first financial news and research business will be operated by News Corp’s Dow Jones and has 100,000 digital subscribers.
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