$6.46 billion: hardly worth bothering with

Could European take-overs save U.S. publishing companies from themselves and their greedy corporate parents (which might do well to embrace one of my grandmother’s more conventional aphorisms)?

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.


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