The largest publishing group in the Netherlands comes into American hands.  ‘Should we be so happy about this?’

The largest publishing group in the Netherlands comes into American hands. ‘Should we be so happy about this?’

Nelleke Noordervliet is one of the writers who are called in advance when major changes are afoot at her publishing company, Atlas Contact. This was also the case last Monday morning. It was Geneviève Waldmann, the general manager of parent company Veen Bosch en Keuning (VBK), who personally called her to tell her that a new future lies ahead for the authors.

VBK, the largest publishing group in the Netherlands, will become part of the renowned Simon & Schuster (S&S), one of the five major publishing houses in the United States, Waldmann said. VBK owns Atlas Contact, Ambo|Anthos, Luitingh-Sijthoff, Alfabet and Van Dale.

The takeover means that Dutch authors, who always write for that tiny Dutch language area, can suddenly be published in the US much more easily. And from there also in all other countries in which S&S operates, worldwide. Gone are the days when publishers had to peddle at book fairs to sell the rights to a work to foreign publishers.

What Waldmann did not mention, says Noordervliet, is that with the arrival of Simon & Schuster, an American private equity fund is also indirectly entering the Dutch book market. This market is difficult to compare with other sectors or the international book market, because it relies on a certain degree of collectivity. Dutch publishers are aware that they all create the cultural offering. Of course they want to be profitable, but not at all costs.

Simon & Schuster itself has also recently changed owners, Noordervliet sees when she browses the internet after the phone call. Since October, the group has been one of the assets of Kohlberg Kravis Roberts & Co (KKR), the American investment fund that owns eyewear seller Hans Anders and bicycle manufacturer Accell in the Netherlands.

Noordervliet: “I started to wonder whether we should be happy with this in the long term. KKR is known as an aggressive investment company. They buy a publishing house not because they love books, but to make money from them.”

The English-speaking world is opened to usGeert Mak writer

KKR makes no secret of the latter. Nor the fact that it bought S&S to sell it again in a while. “In five, six, seven years,” Pete Stavros of KKR said after the takeover in an interview with the Bloomberg news agency. “We want [eerst] achieve some things. Maybe one day S&S will be a great publicly traded company. We will see. We are in no hurry.”

It is unknown what requirements KKR, which has added experienced publisher Richard Sarnoff to the leadership of S&S, sets in terms of returns or market share. Nor is it known what of this pressure will trickle down to VBK. “The agreements with S&S about returns, for example, still have to be made,” says Waldmann in a video call. But, she emphasizes: “We are being bought by S&S, not by KKR. It goes like it goes in the publishing world: the shares of your company end up in the hands of investors and at some point they leave. I have now been in this business for 34 years and have never been able to sit back and think that I was set for the next five years.”

Loaned money

KKR paid $1.62 billion for S&S last year to its previous owner, entertainment company Paramount Global. KKR made the acquisition with a billion dollars in borrowed money, which will also have to be recouped. It is a well-known modus operandi of KKR and many other private equity funds, the so-called leveraged buyout: making an acquisition with a large portion of borrowed money, without bearing the risk yourself. Magazine The Atlantic calculated that the interest alone will probably be a heavy burden for S&S.

These are the plunderers, these are the looters, is the title of a book published last year in which American journalist Gretchen Morgenson and financial analyst Joshua Rosner explain how “the treacherous, debt-laden world of private equity,” including KKR, is “draining” ordinary Americans. This description comes from their publisher’s website. Ironically, that’s Simon & Schuster.

For example, the authors describe how KKR, together with other private equity firms, burdened the toy store chain Toys ‘R’ Us with high debt, one of the reasons why bankruptcy was inevitable. And how some residents of the town of Bayonne struggled to pay for their drinking water after KKR had the pipe system renovated.

Nelleke Noordervliet has many questions after what she has read about KKR. “KKR will want to increase the value of S&S in order to reduce its debt burden and sell the asset. So S&S will have to show that they are making money. Our director emphasizes that the authors will receive all the attention we are used to and that VBK will continue to follow an independent course, but if it deviates from what they want in the US, I think you can forget about that. No one listens to the little sister or brother. I’m not saying it will happen this way, but I’m afraid it will. It makes me skeptical and expectant.”

“I really have no idea how this will turn out,” says writer Auke Hulst, whose work is published by Ambo|Anthos. “The shorter line abroad is nice in itself. At the Frankfurt Book Fair you are dependent on agents and editors who have countless other appointments.”

VBK is S&S’s first major European acquisition and fits within the new strategy that the American publishing house has agreed with its new owner to tap more international markets. VBK director Waldmann: “I have long resisted the fact that more and more English-language books are being read in the Netherlands, but it is now a given. One in five books sold is in English. Joining an international book company is therefore a logical step.”

Titles published by VBK

TikTok sensation

This means that VBK can release S&S’s English titles on the Dutch market, at the same time as a possible Dutch translation. This will be the case, for example, with the work of TikTok sensation Colleen Hoover, who sold millions of copies of her book worldwide It ends with us.

Conversely, the market for Dutch authors is also becoming more international. It is increasingly likely that printed English-language versions of their work will appear. And above all, there will be new options for their e-books and audio books, according to Waldmann. “There are many platforms besides the bookstore. Amazon, and Kobo for e-books and Storytel, Nextory, Bookbeat and now also Spotify for audiobooks. If S&S is at the table with Spotify, we can now get in more easily.”

“The English-speaking world is being opened to us,” says writer Geert Mak. “So far, European authors have sold poorly in the US, but that market will probably become more accessible to us.” VBK and S&S are two very different publishers, he sees, just in size. “VBK has an annual turnover of 90 million euros, S&S of over a billion dollars. And while they publish approximately the same number of books.”

He points out a big difference in approach. “S&S is in a different industry. They publish enormous print runs per title that are marketed with great force. It is therefore possible that there will also be more emphasis on bestsellers in the Netherlands and that this will be at the expense of the breeding ground for new talent that a publishing house also has.”

Waldmann says nothing will change on that last point. “S&S director Jonathan Karp and I are on the same page about this. We continue to work in small teams that can continue to ‘build’ authors.”

The rich supply in the Dutch book world is protected by the Fixed Book Price Act, a phenomenon that does not exist in the US. This law means that a book must be sold everywhere for the same price, set by the publisher. This prevents large, wealthy booksellers – think of supermarkets, for example – from being able to command a low purchase price on a popular title. For example, the sale of bestsellers makes it financially possible to publish smaller and new works.

It is one of the forms of collectivity that characterizes the Dutch book trade. Others include the Centraal Boekhuis, which functions as a joint distribution channel, and the CPNB foundation, which organizes the Book Week.

Outsiders sometimes see this collectivity as old traditions that slow down competition. It raises the question of whether Simon & Schuster will want to lobby for the abolition of the fixed book price. According to Waldmann, this cannot be the case. She sees the fixed price as “a very great asset”.