Why do foreign media firms find American publishers attractive even as U.S. media conglomerates look to dump them?
Publishing, alas for all the authors among us, is a small business in the scheme of things. Time Warner may be the fifth-largest book publisher in the United States, but the unit accounts for only a tiny sliver of the company’s revenues and profits. Time Warner has a market capitalization of about $85 billion. At $537 million, the publishing arm accounts for only six-tenths of 1 percent of the company’s total value….
Now, $6.46 billion is nothing to sneeze at. But it’s a rounding error compared with the sums generated by magazines, television, and movies. If you’re a publicly held U.S. company, like Time Warner, you simply can’t afford to keep carrying units — no matter how small — that don’t offer the prospects of rapid growth.