Under oath: what the Penguin trial put on the record
For three weeks in 2022, the world’s largest publisher explained its business in a federal courtroom. The transcript is the most honest document the industry has produced this century.
The short answer
In August 2022 the US Department of Justice blocked Penguin Random House’s 2.2-billion-dollar purchase of Simon & Schuster — and, in the process, forced the least transparent consumer industry in media to testify about its own economics. The record shows a business its own chief executive compared to venture capital: unpredictable hits, systematic losses, and a small elite of titles carrying everything else. Nobody who read the transcript can keep repeating the bedtime version of publishing.
“Angel investors in our authors and their dreams”
That is how PRH’s global CEO, Markus Dohle, described publishers on the stand — under questioning, while defending the merger. Publishers Weekly’s trial reporting preserved the framing and its context: advances are investments made against radically uncertain outcomes, and Dohle conceded that “some big advances flop completely and don’t sell well”. The industry’s own counsel, seeking to prove that competition for author advances would survive the merger, had every incentive to describe the business as a casino. It did so, repeatedly, under oath.
The concentration slide
An internal presentation by PRH US CEO Madeline McIntosh, entered into the record, showed that the top 4 percent of profitable titles drive 60 percent of the company’s profitability. PRH paid out over a billion dollars globally in advances and royalties in 2021 — roughly 650 million pledged by the US division alone — knowing that the return would ride on a sliver of the list. The rest of the catalogue is, functionally, the cost of buying lottery tickets: publishing’s portfolio model, stated by the portfolio’s owner.
What the judge concluded
Judge Florence Pan blocked the merger in November 2022, persuaded that reducing the “Big Five” to four would suppress advances for anticipated top-selling books — a ruling, as NPR reported, built on the same testimony. The industry’s defence and the government’s attack agreed on the underlying facts; they disputed only who should own the casino.
Why this matters to an unpublished writer
Because every promise made to you — by traditional houses, by hybrid publishers, by anyone — operates inside these economics. A business whose own CEO calls acquisition angel investing cannot honestly guarantee outcomes, and neither can anyone downstream of it. The trial record is the definitive citation for this desk’s standing advice: judge offers by terms and transparency, never by promised results. And when someone quotes wilder numbers from this same trial — half of all books selling a dozen copies — read the companion briefing, because the record says less than the memes do.
The bottom line
The trial did not reveal a scandal. It revealed a structure: concentrated profits, unpredictable outcomes, and an industry that finally described itself accurately when the alternative was perjury. Writers should read it the way investors read a prospectus — once, carefully, before signing anything.
- Publishers Weekly — DOJ v. PRH: Markus Dohle’s Silicon Valley of Media ↗
- Publishers Weekly — DOJ v. PRH: All Our Coverage ↗
- The Bookseller — Dohle defends PRH bidding policy at trial ↗
- NPR — Judge blocks Penguin Random House–Simon & Schuster merger ↗
- Elle Griffin — No One Buys Books (trial quotes compilation) ↗
Written and edited by the desk, then verified with AI assistance: every figure, quotation and link in the source ledger was checked against the original document before publication.