Former Macmillan president Brian Napack, now a
senior advisor at Providence Equity Partners, a private equity firm with $27
billion in assets that specializes in investing in media and education
properties, offered a high altitude perspective on a publishing industry in the
midst of “structural change.” Interviewed onstage by Publishers Marketplace
founder Michael Cader, Napack responded to Cader's description of a publishing
landscape dominated by the Random House/Penguin merger, McGraw-Hill’s
withdrawal from educational publishing, the closing of Borders and the rise of
technology companies as disruptors in the publishing business, emphasizing that
“there’s been very little capital in-flow into publishing, the Random House,
Penguin deal is all about scale but there’s no cash involved.”
Napack
said that the McGraw-Hill deal was about, “unlocking value. It feels like a lot
of change is going on but it’s the beginning of the end of change. We’re about
to see what publishing looks like in the future...He
said the clock is “ticking” for Hachette, “which likely is worried. There are
only so many large publishing assets available to acquire,” and said more
mergers were likely rather than acquisitions from players “outside” of publishing.But Napack also emphasized that while the big six may end up as “the big three,” the power of innovation often flourishes in markets during periods of consolidation and new companies can “come from underneath,” and he cited the precarious but interesting market position of Barnes & Noble.
