Skip to content

NEWS: McClelland & Stewart merged into Random House/ Bertelsmann AG

First established in 1906, Canadian publishing company McClelland & Stewart has published books by authors including Council of Canadians chairperson Maude Barlow, as well as Margaret Atwood, Farley Mowat, Margaret Laurence, Pierre Berton, L.M. Montgomery, and Michael Ondaatje.

The Globe and Mail reports, “After years existing in semi-captivity, Canada’s most storied independent publishing house has merged fully into the multinational behemoth known as Bertelsmann AG, owner of Random House and its affiliates, the world’s largest trade book publisher.”

“Since 2000, Random House has had a 25 per cent stake in McClelland & Stewart, with the other 75 per cent belonging to the University of Toronto after it was donated to the university by M&S’s former sole owner, Avie Bennett. M&S ‘retained its editorial autonomy and independence throughout this eleven-year relationship,’ according to a release from Random House Canada.”

Stated reasons
“But the ‘challenges facing publishers, including a difficult economy and digital-driven transitions facing the industry, have put significant pressure on M&S, and it has been experiencing financial challenges,’ Random House said. ‘We believe with McClelland & Stewart fully within the Random House of Canada family we will more effectively be able to meet these challenges to ensure the growth and long-term stability of this iconic Canadian publisher,’ said Brad Martin, Random House Canada president and CEO.”

No layoffs promised
The CBC adds, “A Random House spokeswoman said via email there would be no layoffs.”

The Bookseller.com notes, “President and publisher of M&S Doug Pepper will continue in his role, reporting to RHC c.e.o. Brad Martin, becoming a member of the executive committee of RHC. Executive vice-president and publisher, fiction of M&S Ellen Seligman will also continue in her role.”

The Vancouver Sun notes, “Although M&S maintained editorial independence from its corporate parent (and even competes against it when it came to signing authors) Random House of Canada shared support services with M&S, including sales, production, design and human resources. ‘Our processes really aren’t going to change that much, since we already are really quite integrated with them,’ said Pepper in an interview.”

Regulatory approval
CBC reports, “Random House of Canada, a unit of international publisher Random House, which is itself owned by Germany’s Bertelsmann, announced the deal Tuesday, saying it already has regulatory approval for the takeover from Heritage Minister James Moore.”

The Globe and Mail adds, “Before announcing the transaction, Random Canada quietly approached the office of Minister of Canadian Heritage and Official Languages James Moore to seek an exemption from long-established provisions of the Investment Canada Act, which specifically outlaw such takeovers. The company reported that Mr. Moore granted the approval ‘on the basis of the commitments we made that demonstrated that this investment is likely to be of net benefit to Canada’. Among those commitments, Random has promised to maintain the separate identity of the M&S imprint, to continue its poetry program and to establish an annual McClelland & Stewart Lecture at the University of Toronto Representatives of the minister’s office were unable to confirm details of the arrangement Tuesday afternoon.”

The Toronto Star reports, “Is the deal legal? It might take legal experts years to sort out that question, and, yes, the Opposition could attack the Harper government in the House for letting this happen. But obviously no deal would have been announced if it had not been cleared by the government’s regulatory authority — with the condition that Random House sign undertakings to keep M&S programs running for at least five years. In any case, the legal argument would surely be doomed to fail, because, with a comfortable majority, the Harper government can simply bring in legislation to change the law if necessary.”

A pattern
The Globe and Mail article reports, “M&S flourished under still-extant legislation that bans foreign takeovers of Canadian publishers. And while it will continue to publish under its own imprint, its federally approved disappearance as an independent company brings to a head widespread industry concern about the survival of that law and other policies that have historically supported Canadian publishers and authors.”

“The M&S decision follows earlier ministerial decisions that allowed companies such as Amazon and Apple to bypass Canadian distribution channels in apparent contravention of the act, leaving publishers with the impression that the law has become a dead letter.”

– “‘Having this happen without a change in policy is an indicator of where the policy is going to go,’ said House of Anansi publisher Sarah MacLachlan. ‘The big questions for independents that still exist is, will the policy still allow for us to exist?'”

– “Calling the takeover ‘regrettable’, Association of Canadian Publishers director Carolyn Wood faulted the government for allowing existing protections for Canadian publishers to lapse. ‘These policies have served Canadian writers and readers well and they would continue to do so if they were enforced’, she said. ‘They have allowed the creation of an industry that has achieved great success with relatively modest investment.'” In the Publishers Weekly report on the sale, “The Association of Canadian Publishers expressed dismay ‘that Canada’s most storied book publisher, McClelland & Stewart, will be downgraded to an imprint of a foreign-owned multinational corporation. Today’s announcement marks the end of a long and illustrious history of a Canadian cultural institution.’ …’While we wait for a decision on ownership policy,’ said ACP president Margie Wolfe, ‘it seems that the policy has become irrelevant in practice….All of us need to remember that the foreign ownership policy was initially introduced to both protect and encourage the development of an independent and diverse Canadian cultural sector. Today we have lost one of our greatest homes for Canadian stories. It’s a sad and scary day.'”

– “The takeover is ‘not a big surprise’, said long-time M&S author Michael Ondaatje, reflecting a common view among many insiders, who reacted more with resignation than dismay at the news. ‘I guess the reality is it’s pretty tough to survive as a publisher nowadays,” he added. “It’s not like the days of Jack McClelland any more.'”

– And Toronto Star columnist Martin Knelman notes, “Not long after the news broke that Random House had acquired total control of McClelland & Stewart, I received a long-distance phone call from Vancouver. On the other end of the line was Mel Hurtig, one of the last remaining voices of passionate nationalism in the history of Canadian book publishing. ‘This deal is absolutely and totally illegal under existing Canadian law,’ Hurtig told me. ‘It’s absolutely outrageous. Jack McClelland must be spinning in his grave.'”