Sunday, 22 January 2017

Pearson to sell their 47% stake in Penguin Random House

When I worked for Pearson in the 1970s and 1980s it was successful and confident and a really great place to work. Its great strength was its diversification: in fact it was criticised for being, in effect, Lord Cowdray’s personal diversified portfolio, comprising amongst many other things: Chateau Latour, Royal Doulton, Madame Tussauds, Warwick Castle, the Financial Times, Westmister Press, half of The Economist and three iconic publishing imprints: Ladybird, Longman and Penguin.

Longman was at the time the largest and most profitable UK imprint. Amongst their many successful operations were English as a Foreign Language publishing, medical publishing (Churchill Livingstone), and very successful publishing operations throughout Africa and the Middle East. When there were shocks to the system, as there were when, for instance, government failure in Nigeria caused them to default on a £6 million debt, the company could weather the storm because of diversification.

I fear for the modern Pearson which has put almost all its eggs in the US education market. It has sold off the family silver: Royal Doulton, Chessington Zoo and Chateau Latour went long ago, but more recently they have sold the Financial Times, and their share of The Economist. Now they are to sell their 47% stake in the enormous Penguin Random House. Perhaps it will be in safer hands with Bertelsmann.