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Why the DOJ v PRH Antitrust Trial Doesn’t Change the Game for Authors, Regardless of Outcome
September 22, 2022 by Jane Friedman
This article draws from my commentary and reporting that first appeared in The Hot Sheet.
In 2021, the US Department of Justice (DOJ) sued to block Penguin Random House’s acquisition of Simon & Schuster on antitrust grounds. Penguin Random House (PRH) is the biggest US publisher by a large margin and publishes about 15,000 titles per year. Acquiring another one of the Big Five publishers, Simon & Schuster, would create an even bigger giant in the US market.
In its first filing related to the case, the government granted authors something of a fairytale wish: it centered the role of authors in the publishing ecosystem. The complaint states, “Authors are the lifeblood of book publishing. Without authors, there would be no stories; no poetry; no biographies; no written discourse on history, arts, culture, society, or politics. … Penguin Random House’s proposed acquisition of Simon & Schuster would result in substantial harm to authors.”
But which authors? This is where the plot thickens. The DOJ’s case focuses on the “anticipated top selling books” that garner advances of $250,000 and up. For the purposes of this case, that included roughly 1,200 books, or about 2% of all books released by commercial publishers. The government focused on proving how advances for top-selling authors would decline should PRH be allowed to acquire Simon & Schuster. The DOJ wrote in its initial filing that “hundreds” of authors would have “fewer alternatives and less leverage.” Hundreds. Canadian publisher Ken Whyte offered his clear take on this with the headline Justice for the .001%, and that’s a good summary of how I see it, too.
During trial, the DOJ argued advances for anticipated bestsellers could decline by as much as 20 percent should the merger happen. So, some quick math: if Hillary Clinton was paid $14 million for her memoir, maybe she’d only get $11 million for her next one. Or, consider Amy Schumer, who received $9 million for an essay collection. She might get a couple million less. Would they still write their books anyway? Would they suffer if they received a lower advance? (Would anyone care?)
I admit I’m being glib. Some have rightly pointed out that a $250,000 advance isn’t all that much for a Big Five publisher—or for an author either. After it’s broken into four installments and an agent takes 15 percent, that’s little more than $50,000 per installment for the author, spread out over a few years, before taxes. During trial, big publishers admitted that the large majority of advances do not earn out, which isn’t necessarily considered a failure for the author, just part of publishing’s business model. That effectively results in a higher royalty rate, and I have to wonder if the entire industry would be better off with higher royalty rates in the contract (especially for ebooks, where rates are widely considered too low by agents), and advances that quickly earn out. I’ll come back to that later. Here’s the bigger and more important point that I think gets missed repeatedly in trial coverage.
Most author advances would not be affected by the merger.
When you read op-eds about this case, most assume or imply there will be trickle-down effects that reduce all authors’ earnings, not just those receiving $250k or more. Yet the government’s modeling and its key economic expert project only that harm will come to authors of anticipated top-selling books. In fact, testimony indicated that authors receiving lower advances could benefit. The defense argued that the government didn’t want to use a lower advance figure of $50,000 as a cutoff for their antitrust case because it would have undermined their argument for market harm: There are no negative effects at that advance level, at least based on the economic modeling presented at trial. It was shown that, as a result of the merger between Penguin and Random House in 2013, advances for anticipated top-selling books decreased by about $100,000, while for all other books, advances stayed flat or moved up a bit.
Furthermore: as a collective group, authors and publishers outside the Big Five have been gaining in market share for years.
At the trial, PRH’s CEO testified the company had lost market share over the last decade, so one way for PRH to regain market share is through mergers and acquisitions. NPD Bookscan, which tracks print sales, has reported that the largest share of book sales belongs to publishers outside of the top 15 in the US, and that effect is likely even more pronounced on the digital side. More titles are released each year than ever before, and there is no evidence that mergers have led to decreased diversity in publishing and less opportunity for authors. In fact, history demonstrates the opposite.
Professor Dan Sinykin, who has studied the conglomerization of publishing, recently offered the following insight:
If the merger does end up happening, it will be an incremental continuation of the same trajectory we’ve seen in publishing for decades. It’s a mistake to think that the ongoing conglomeration will lead directly to the destruction of literature. A lot of interesting things are generated in resistance to conglomeration. The nonprofit presses exist as a direct result of it. There’s a dialectical relationship to what kind of literature is made possible because of conglomeration; it’s not simply a one-sided foreclosing of the possibilities for literature. And even within the conglomerates, authors always bring creativity to structural limits.
In order to see what’s truly limiting the possibilities for what kind of literature is published, you actually have to look much more broadly, at the class structure in the US, like who gets to go to MFA programs, who actually gets opportunities, and the deep nepotism involved in mentor–mentee relationships that all happen before you even get to an agent submitting a query to a publishing house. The merger between PRH and S&S draws our attention to this much larger set of networked problems, but in and of itself, this case is a drop in a 50-year bucket.
When the acquisition was first announced in 2020 (before the DOJ filed suit), Peter Osnos of the independent publishing house PublicAffairs said, “It’s natural, understandable, predictable that people will want to look at the downside. And it turns out there may not be quite the downside they think. That’s my slightly contrarian view.” He thought it might be a good thing, in fact, for Simon & Schuster to be run by a corporate parent that’s primarily focused on book publishing (that’s Bertelsmann), rather than a media company focused on streaming video. And you don’t even have to be contrarian to believe that as the Big Five or Big Four become narrowly focused on producing hits, that leaves more room for small publishers and innovators.
Ultimately, the DOJ may be entirely wrong about what happens to author earnings as a result of the Simon & Schuster purchase. But let’s say advances did decline. Is it possible an acquisition could lead to other outcomes that offer a net positive, like better marketing and promotion? What if lowered advances made it possible for small presses to compete for great authors? Or what if the acquisition led publishers to pay better royalties?
I know, it’s crazy to think authors might have more leverage or options in a Big Four situation. But consider the pace of technological progress and changing socioeconomic conditions. Maybe some authors would boycott a Big Four. Maybe authors would look for different kinds of deals from smaller publishers who pay higher royalties and offer more control. Maybe there are new types of publishers and media companies (see: Webtoon, Radish, Wattpad) and a future creator economy that gives writers more power and freedom to step away from average or poor deals. There are all kinds of potential outcomes, and the consolidation of legacy publishers represents the late stage of a possibly declining business model. In the long history of the written word, authors have found ways to adapt to new conditions and continue in their work. The greatest are forever remembered. In comparison, publishers are ephemeral and largely forgotten.
In a 2011 article about the Penguin merger with Random House, Planet Money’s Adam Davidson wrote, “It’s difficult to imagine how, in the digital world, publishers could ever monopolize the sale of written material. Even if there were only one house left, it would compete with every blogger and self-published ebook author. Eventually, it’s likely that book publishing will embody both conflicting visions of digital-age commerce—lots of small businesses and a few massive ones that handle big-ticket items.”
Little is likely to change in commercial publishing no matter the outcome.
The big dogs remain the big dogs. Mega advances will still be paid, and it will remain challenging to make a living if you’re the average author (as it has been throughout history if you depend on book sales alone). This is about protecting the status quo, not making progress—although I would argue that, even if the deal moves ahead, you still get the status quo. Either way, Simon & Schuster gets sold to another of the Big Five or maybe a financial buyer.
Notably, in its first response to the news of the DOJ’s filing, the Authors Guild said, “Unless the Biden Administration and Congress address antitrust reform in relation to am*zon’s practices, preventing the PRH/S&S merger will do little to reduce harm to authors and the publishing industry as a whole and may injure mid-list authors short term.” And also: “We look forward to working with the Biden Administration on antitrust reform that gets to the root of the problems in the industry, whereas the proposed merger was just a symptom.” Indeed.
Michael Cader, writing in Publishers Lunch, has perhaps the best summary of where we are now (subscription required): “Antitrust trials are technical and complicated and have little to do with the nuances of the businesses involved. They are about market definition, market concentration, and market constraints, and about pricing power and econometric models. … The government brought a very focused case about the small set of authors and deals that win contracts of $250,000 or more every year (or about 1,200 projects a year, as we learned). It was the DOJ, not anyone in publishing, that had no regard—in an antitrust case—for the other tens of thousands of authors and books brought to market every year.”
ARTICLE
https://www.janefriedman.com/doj-v-prh-antitrust-trial/
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Happy September Equinox- 9:04 pm eastern standard time - the beginning of Autumn in the northern hemisphere and Spring in the southern hemisphere
the following is an image of Neptune, from the James Webb, it is a composite image, that is not one image from James Webb.
https://www.flickr.com/photos/europeanspaceagency/52373132207/in/feed-37440125-1663769703-1-72157721637473044Enjoy
a story
The Last Homily On Liturgoid
https://www.kobo.com/us/en/audiobook/the-last-homily-on-liturgoida poem, click the image
An art gallery
Witchtember 2022
https://www.deviantart.com/hddeviant/gallery/84411925/witchtember-2022A fun post
from the Black Games Elite public group
Breath of the wild playhouse
https://aalbc.com/tc/blogs/entry/323-breath-of-the-wild-playhouse/some other dates after in the month of september
23: Mercury between sun and earth, inferior
Judy Reed, Black woman, in 1884 made a patent for... wait for it... Dough kneeder and roller
Here is the proof of the patent claim, I read it was signed with an X and it seems true. so for Black kids, or yourself, when someone says what you need to know to have a great imagination, tell them they are wrong
https://pdfpiw.uspto.gov/.piw?PageNum=0&docid=0030547425: Rosh Hashanah- The Ethiopian jews, some call Beta Israelites, originally spoke Agaw. Genetic studies say that they are genetically related to east africans not jews from across the Red Sea, like from israel/palestine/yemen
Mercury<->Moon; Venus <->Moon conjunctions26: Jupiter will be 180 degrees in the sky, opposite the sun, Jupiter will be no brighter or bigger this year than on this day
1872 first shrine temple in New York City
https://www.meccashriners.org/history
27: St. Vincent de Paul saint day, Charity
Samuel Adams born 1722- he used his influence to get boston to give education to boys plus girls.
He opposed the still in existence Society of the Cincinnati, a hereditary fraternity. Some might call that the patriarchy today:)
He opposed the constitution, as he felt it didn't make a federation but made a nation. It can be argued in cheap hindsight, samuel adams was 100% correct. if you consider usa history, the constitution has become a legal document that has been used effectively to destroy the concept of a union of states who can be dissimilar to each other while having a unity of purpose.
He pushed for the Bill of Rights to be entered into the Constitution and supported it.
Lastly, Samuel Adams was a poor fiscal operator and didn't brew a damn thing:)
28: Woodchuck's hibernate
Moon goes north to south of the ecliptic29: Miguel de Cervantes Saavedra born 1547 - he wrote a book in two parts, which you may know. He only worked for three years. Odd for me as a writer, that I have a similar quantity of work in similar short spans in multiples.
His first work is LA Galatea
https://www.kobo.com/us/en/ebook/la-galatea-8His first short story collection and only surviving Novelas Ejemplares
https://www.kobo.com/us/en/ebook/novelas-ejemplares-english
In Audio book form
https://librivox.org/the-exemplary-novels-of-miguel-de-cervantes-saavedra-by-miguel-de-cervantes-saavedra/His last work is Los trabajos de Persiles y Sigismunda
The 400th anniversary edition in spanish made by the Real Academia Española, Royal Academy of Spain
https://www.rae.es/sites/default/files/Hojear_Persiles_y_Sigismunda.pdf
Persiles in english translation
http://www.ems.kcl.ac.uk/content/etext/e006.html
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An exclusive interview with Philotée Mukiza, the winner Best of the Best Eiica
Philotee Muzica’s story
“I’m from Rwanda. I worked for Rwalf Export LTD as a production manager. Today I’m we won the Ernesto illy International Coffee Award. “
Why did you choose to make a living with coffee? Was it for passion or for something else?
“At the beginning I didn’t know much about coffee. I was just fresh graduated and I was just looking for a job. But then, I was more and more interested in what I was learning. I think that now I’m more passionate in what I’m doing on daily bases. That’s because I saw the important meaning of our work for our farmers and their families. And that we are helping them in an international level. So now I feel more confortable with my job. “
According to you, why are you the first woman to win these two important Awards?
“Sincerely I don’t’ know. Maybe it was only a coincidence. Actually I don’t think that the reason of this winning it’s related to the fact that I’m a woman. But it’s only thanks to the quality of the coffee that we took to the cupping. “
What is so special about your coffee? Rwanda isn’t really known until now, for his role as coffee producer. What has changed?
“First of all it exists a natural factor, the altitude and the climate. But, what we do from farm to dry living farm? This year we tried a new strategy of processing as Rwalf coffee team. So the tecniques that farmers do daily is some soaking. This was something which wasn’t’ really used years ago. Now we are doing that and that really change the finala result in cup. “
What about the women that usually has a specific role in the coffee chain, because they work in the farm?
“In Rwanda there are several cooperatives of women in most of Rwanda coffee stations. We’re working with them not only regarding the coffee processes, but also in activities that involves their daily lives. We support them to improve in other sectors. We also give them trainings about to develop different skills.”
Has it been difficult to gain the top of the coffee chain, becoming manager as a woman?
“I started with a job that requires a hard work. It was more difficult for a woman, because some activities in coffee especially fields activities are located in a very rural areas. And moving on the motorcicles and walking, isn’t something very easy for me. Sometimes I acted as a man. I walked with men and now we felt like a team. “
The future programs?
“We need to continue sustaining what we’re doing now, especially regarding the quality. It’s important for us to go towards people needs in cupping. Also we want to continue with the local farmers, in helping them to get more activies to improve their incomings. “
You coffee is a product that can be appreciated by an Italian customer?
“I think the taste is not familiar for an italian customer, because it’s unic in his genre. In fact, coffee in Rwanda has a different taste in cupping. It’s something new, that can be appreciated even if it doesn’t mirror exactly the traditional italian taste. “
Article
Referral
http://www.coffeeandteanewsletter.com/aug22.html#1
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New Ideas in Civic Life
September 21, 2022 at 12 pm ET
A virtual summit proudly presented as a part of the Newmark Civic Life Series of Recanati-Kaplan TalksWith generous support from
Craig Newmark Philanthropies logoVIEW THE COMPLETE DISCUSSION BELOW
LINK
https://www.92ny.org/state-of-america-summit
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I didn't know a Black NAtional Voters Day existed and I don't see why it exist? I found the explanation and it is misplaced. What I want to know is the Black Voters Value Day , when Black people can look at what our voting has earned us over the years... ahh that is nothing.
The explanation why
https://nul.org/news/national-black-voter-day-national-urban-leagues-answer-voter-suppression-misinformation-andhttps://whenweallvote.tumblr.com/post/695572659154681856/did-you-know-that-more-black-americans-wereARTICLE LINK
https://whenweallvote.tumblr.com/post/695572659154681856/did-you-know-that-more-black-americans-were -
Here is one Queston and answer
To see all the answers, click the following link
https://entertainment.tumblr.com/tagged/andortime
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Title: Elegance mantis, angelica, twin flintlocks - weapons fairy
Artist: GDBee < https://gdbee.store/ >
Prior post
https://aalbc.com/tc/profile/6477-richardmurray/?status=2076&type=status
WEapons Fairy Series
https://aalbc.com/tc/search/?&q=gdbee fairy&type=core_statuses_status&quick=1&search_and_or=and&sortby=newest
GDBee Post
https://aalbc.com/tc/search/?&q=gdbee&type=core_statuses_status&quick=1&author=richardmurray&search_and_or=or&sortby=newest -
Title: monarch, lavender, chainsaw- weapons fairy
Artist: GDBee < https://gdbee.store/ >
Prior post
https://aalbc.com/tc/profile/6477-richardmurray/?status=2075&type=status
GDBee Post
https://aalbc.com/tc/search/?&q=gdbee&type=core_statuses_status&quick=1&author=richardmurray&search_and_or=or&sortby=newest -
Title: Lady beetle , aloe vera, scythe - weapons fairy
Artist: GDBee < https://gdbee.store/ >
Prior post
https://aalbc.com/tc/profile/6477-richardmurray/?status=2074&type=status
GDBee Post
https://aalbc.com/tc/search/?&q=gdbee&type=core_statuses_status&quick=1&author=richardmurray&search_and_or=or&sortby=newest -
Title: Ariel Appreciation
Artist: GDBee < https://gdbee.store/ >
Prior post
https://aalbc.com/tc/profile/6477-richardmurray/?status=2051&type=status
GDBee Post
https://aalbc.com/tc/search/?&q=gdbee&type=core_statuses_status&quick=1&author=richardmurray&search_and_or=or&sortby=newest -
Title: Old Piece
Artist: shawn alleyne < Pyroglyphics Studio > OR < https://www.deviantart.com/pyroglyphics1 >
Prior post
https://aalbc.com/tc/profile/6477-richardmurray/?status=2053&type=status
Shawn Alleyne post
https://aalbc.com/tc/search/?q=shawn&quick=1&type=core_statuses_status&updated_after=any&sortby=newest -
Feds: Minnesota food scheme stole $250M; 47 people charged
AMY FORLITI
Tue, September 20, 2022 at 12:11 PM·5 min read
MINNEAPOLIS (AP) — Federal authorities charged 47 people in Minnesota with conspiracy and other counts in what they said Tuesday was the largest fraud scheme yet to take advantage of the COVID-19 pandemic by stealing $250 million from a federal program that provides meals to low-income children.
Prosecutors say the defendants created companies that claimed to be offering food to tens of thousands of children across Minnesota, then sought reimbursement for those meals through the U.S. Department of Agriculture's food nutrition programs. Prosecutors say few meals were actually served, and the defendants used the money to buy luxury cars, property and jewelry.
“This $250 million is the floor," Andy Luger, the U.S. attorney for Minnesota, said at a news conference. “Our investigation continues.”
Many of the companies that claimed to be serving food were sponsored by a nonprofit called Feeding Our Future, which submitted the companies' claims for reimbursement. Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted, and authorities say she and others in her organization submitted the fraudulent claims for reimbursement and received kickbacks.
Bock’s attorney, Kenneth Udoibok, said the indictment “doesn’t indicate guilt or innocence.” He said he wouldn't comment further until seeing the indictment.
In interviews after law enforcement searched multiple sites in January, including Bock's home and offices, Bock denied stealing money and said she never saw evidence of fraud.
Earlier this year, the U.S. Department of Justice made prosecuting pandemic-related fraud a priority. The department has already taken enforcement actions related to more than $8 billion in suspected pandemic fraud, including bringing charges in more than 1,000 criminal cases involving losses in excess of $1.1 billion.
Federal officials repeatedly described the alleged fraud as “brazen,” and decried that it involved a program intended to feed children who needed help during the pandemic. Michael Paul, special agent in charge of the Minneapolis FBI office, called it “an astonishing display of deceit."
Luger said the government was billed for more than 125 million fake meals, with some defendants making up names for children by using an online random name generator. He displayed one form for reimbursement that claimed a site served exactly 2,500 meals each day Monday through Friday — with no children ever getting sick or otherwise missing from the program.
“These children were simply invented,” Luger said.
He said the government has so far recovered $50 million in money and property and expects to recover more.
The defendants in Minnesota face multiple counts, including conspiracy, wire fraud, money laundering and bribery. Luger said some of them were arrested Tuesday morning.
According to court documents, the alleged scheme targeted the USDA's federal child nutrition programs, which provide food to low-income children and adults. In Minnesota, the funds are administered by the state Department of Education, and meals have historically been provided to kids through educational programs, such as schools or day care centers.
The sites that serve the food are sponsored by public or nonprofit groups, such as Feeding Our Future. The sponsoring agency keeps 10% to 15% of the reimbursement funds as an administrative fee in exchange for submitting claims, sponsoring the sites and disbursing the funds.
But during the pandemic, some of the standard requirements for sites to participate in the federal food nutrition programs were waived. The USDA allowed for-profit restaurants to participate, and allowed food to be distributed outside educational programs. The charging documents say the defendants exploited such changes “to enrich themselves."
The documents say Bock oversaw the scheme and that she and Feeding Our Future sponsored the opening of nearly 200 federal child nutrition program sites throughout the state, knowing that the sites intended to submit fraudulent claims.
“The sites fraudulently claimed to be serving meals to thousands of children a day within just days or weeks of being formed and despite having few, if any staff and little to no experience serving this volume of meals,” according to the indictments.
One example described a small storefront restaurant in Willmar, in west-central Minnesota, that typically served only a few dozen people a day. Two defendants offered the owner $40,000 a month to use his restaurant, then billed the government for some 1.6 million meals through 11 months of 2021, according to one indictment. They listed the names of around 2,000 children — nearly half of the local school district's total enrollment — and only 33 names matched actual students, the indictment said.
Feeding Our Future received nearly $18 million in federal child nutrition program funds as administrative fees in 2021 alone, and Bock and other employees received additional kickbacks, which were often disguised as “consulting fees” paid to shell companies, the charging documents said.
According to an FBI affidavit unsealed earlier this year, Feeding Our Future received $307,000 in reimbursements from the USDA in 2018, $3.45 million in 2019 and $42.7 million in 2020. The amount of reimbursements jumped to $197.9 million in 2021.
Court documents say the Minnesota Department of Education was growing concerned about the rapid increase in the number of sites sponsored by Feeding Our Future, as well as the increase in reimbursements.
The department began scrutinizing Feeding Our Future’s site applications more carefully, and denied dozens of them. In response, Bock sued the department in November 2020, alleging discrimination, saying the majority of her sites were based in immigrant communities. That case has since been dismissed.
Article
Feds: Minnesota food scheme stole $250M; 47 people charged (yahoo.com)
My thoughts
47 people for 250 million dollars. circa 4 million and seven hundred thousand per head.
The two hundred and fifty million dollars is the floor in this one case, while the united states department of justice has grabbed a floor of eight billion already in sars-cov-2 era related stolen money.
Eight billion is the floor.
I share this so whenever I read a black person talk about financial planning, I will advise them to read this article. PRovide the black people you want to hire with these kind of schemes and then succeed and then talk about your grand plans. otherwise be quiet.
Oh, and we all need to see AImee Bock whose face somehow wasn't in every article about this.
A black man hustles in the street some marijuana and fights law enforcement and his face is face of crime. A white woman is part of a two hundred and fifty million dollar theft and she is just an unlucky entrepreneur.