In big media’s heyday, profits were so bountiful they could support literary prestige. Simon & Schuster gave cachet to the other activities of Sumner Redstone. The mogul died in August. Just three months later, his business ViacomCBS has announced the sale of the venerable book publisher for $2.175bn in cash to Bertelsmann.

The proceeds will go towards ViacomCBS’s existential fight to remain relevant in the cut-throat world of video streaming, dominated by Netflix and Disney. The written word, however mighty, has too little heft for most modern tycoons to care about it.

Mr Redstone’s Viacom and CBS closed their re-merger a year ago, bringing together businesses with strengths in broadcast and pay television. With cord-cutting continuing unabated, the combined company is racing to grow its core streaming product, which has 18m subscribers.

ViacomCBS is heavily leveraged with a debt to estimated ebitda ratio higher than three times. It has also recently committed to selling its famed Manhattan office tower, known as Black Rock, to raise additional cash.

German media group Bertelsmann is paying double what many observers expected, a 15 times multiple of ebitda. A boom in reading during the pandemic and multiple Trump administration tell-alls provided the lift. The blowout price only matches what recently shut streaming start-up Quibi raised in venture capital.

Bertelsmann already owns books titan Penguin Random House. Publishing is a significant plank in its strategy. But it is questionable whether this concentrated industry can tolerate the loss of a top business. Think-tanks and trade associations are upset. The deal contract, presciently for ViacomCBS, pushes the weight of the antitrust risk on to Bertelsmann. 

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Shares in ViacomCBS have almost tripled from March lows as advertising revenue has rallied. The company has signed up more streaming subscribers than expected. But just under $2bn of after-tax deal proceeds may not get ViacomCBS very far. This is a competitive environment where Disney recently suspended a near-£1bn quarterly dividend. ViacomCBS bosses, meanwhile, surely miss the book parties.

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