[ad_1]
Simon & Schuster staffers are fuming after their Christmas party was once again scrapped by what they called the Scrooge-like investment giant that owns the famed book publisher, The Post has learned.
Multiple sources at the century-old publisher said the much-anticipated annual shindig was axed as “a belt-tightening exercise” by KKR, the Wall Street financial titan that scooped up the company for $1.6 billion in 2023.
“They are being cheap and not having a big company-wide party this year,” one of the sources told The Post.
The disappointment for the rank and file follows last year’s party being called off after S&S brass pointed to a ritzy Manhattan bash that was being planned for this past April to celebrate the publisher’s 100th birthday, the insider told The Post.
“We are going to have to sell a lot of books to pay for this party,” Jonathan Karp, Simon & Schuster’s CEO, awkwardly joked in a speech at the showy soiree.
One attendee told The Post: “He looked so uncomfortable when he said that. The joke was absolutely too real.”
Now, the publisher behind recent global best-sellers by Colleen Hoover, author of “It Ends With Us,” has trotted out the excuse of having thrown the April party for canceling this year’s holiday get-together, the sources said.
An executive close to Karp told The Post that staffers shouldn’t expect a company Christmas party to be held next year as well.
“Jonathan doesn’t think Christmas parties are the best way to celebrate,” the source said.
Some industrious staffers working for Simon & Schuster’s sub-brands, known in the publishing world as ‘imprints’, are throwing their own, more modest parties after learning the axe would fall once more.
One industry source said that “the canning of Christmas parties is usually a red flag for lower profits and cost-cutting.”
However, executives at the Rockefeller Center-based publisher insisted that “all is well,” and added that KKR is investing heavily in editorial.
The senior managers said that any suggestion of a spending crackdown at the behest of their new private equity overlords was “incorrect.” KKR had $271 billion in assets under management as of September, according to the company.
A spokeswoman for KKR declined to comment. A spokeswoman for Simon & Schuster also declined to comment.
KKR agreed to buy S&S from Paramount Global in August 2023. The media giant, which agreed to an $8 billion merger with independent studio Skydance set to close next year, had been trying to offload the publisher for three years so it could focus on its video streaming and entertainment interests.
Book publishers have faced several challenges as the US emerges from the post-COVID economic malaise including increased competition from digital rivals and higher production costs.
Simon & Schuster’s last earnings release before being taken private showed a 13% drop in sales in the third quarter of 2023 to $307 million year-on-year.
Operating income – a key measure of profitability that accounts for operating expenses such as office rent and wages – dropped by 35% to $60 million from the same period in 2022.
S&S no longer releases its results as a privately-held company, but in its last reported earnings Karp pointed to a 2022 peak in sales by Hoover as the reason for the firm’s slightly weaker performance.
KKR’s buyout came after the Biden administration’s DOJ sued to block a rival $2.2 billion bid by Penguin Random House in November 2021 on antitrust grounds.
Just one year later, District Court Judge Florence Pan ruled a merger of the two publishing giants would illegally reduce competition.
The companies are part of the so-called Big Five publishers that also include Hachette, Macmillan, and HarperCollins, which is owned by The Post’s parent company News Corp.
A lawsuit filed in Delaware by a union pension fund this past August accused KKR’s two surviving founders, Henry Kravis and George Roberts, of netting a $650 million payday for doing no work.
They raked in the eye-popping amount in a complex deal that handed them millions of shares as the pair retired and handed over the reins of the firm to co-CEOs Scott Nutall and Joseph Bae in October 2021.
Kravis and his cousin Roberts decided to set up KKR over dinner at a Midtown Italian steakhouse in 1976, sketching out their ideas for what would later become the private equity industry of today on a napkin.
Their attempt to snap up tobacco firm RJR Nabisco in a 1988 debt-fueled takeover spawned a book by two Wall Street Journal reporters and a HBO movie entitled ‘Barbarians at The Gate’.
Today, the two 80-year-old corporate raiders have a joint estimated net worth of $36 billion.
Along with their late fellow founder Jerome Kohlberg Jr, who died in 2015, they would become known as the godfathers of the leveraged buyout.
That is when investment firms take out loans to snap up and turn around companies, pledging the target firm’s assets or future earnings as collateral for the money borrowed.
0 Comments