[Plura-list] Private equity plunderers want to buy Simon & Schuster

Tue Aug 8 13:50:34 EDT 2023

Read today's issue online at: https://pluralistic.net/2023/08/08/vampire-capitalism/

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Going to Defcon this weekend? I'm giving a keynote, "An Audacious Plan to Halt the Internet's Enshittification and Throw it Into Reverse," on Saturday at 12:30pm, followed by a book signing at the No Starch Press booth at 2:30pm!

https://info.defcon.org/event/?id=50826

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I'm kickstarting the audiobook for "The Internet Con: How To Seize the Means of Computation," a Big Tech disassembly manual to disenshittify the web and bring back the old, good internet. It's a DRM-free book, which means Audible won't carry it, so this crowdfunder is essential. Back now to get the audio, Verso hardcover and ebook:

http://seizethemeansofcomputation.org

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Today's links

* Private equity plunderers want to buy Simon & Schuster: From the same parasites that infected your hospital's emergency room and sucked Toys R Us dry.

* Hey look at this: Delights to delectate.

* This day in history: 2008, 2013, 2018

* Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading

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🔝 Private equity plunderers want to buy Simon & Schuster

Last November, publishing got some *excellent* news: the planned merger of Penguin Random House (the largest publisher in the history of human civilization) with its immediate competitor Simon & Schuster would not be permitted, thanks to the FTC's deftly argued case against the deal:

https://pluralistic.net/2022/11/07/random-penguins/#if-you-wanted-to-get-there-i-wouldnt-start-from-here

When I was a baby writer, there were dozens of large NY publishers. Today, there are five - and it was almost *four*. A publishing sector with five giant companies is bad news for writers (as Stephen King said at the trial, the idea that PRH and S&S would bid against each other for books was as absurd as the idea that he and his wife would bid against each other for their next family home).

But it's also bad news for publishing workers, a historically exploited and undervalued workforce whose labor conditions have only declined as the number of employers in the sector dwindled, leading to mass resignations:

https://lithub.com/unlivable-and-untenable-molly-mcghee-on-the-punishing-life-of-junior-publishing-employees/

It should go without saying that workers in sectors with few employers get worse deals from their bosses (see, e.g., the writers' strike and actors' strike). And yup, right on time, PRH, a wildly profitable publisher, fired a bunch of its most senior (and therefore hardest to push around) workers:

https://www.nytimes.com/2023/07/18/books/penguin-random-house-layoffs-buyouts.html

But publishing's contraction into a five-company cartel didn't occur in a vacuum. It was a normal response to monopolization elsewhere in its supply chain. First it was bookselling collapsing into two major chains. Then it was distribution going from 300 companies to three. Today, it's Amazon, a monopolist with unlimited access to the capital markets and a track record of treating publishers "the way a cheetah would pursue a sickly gazelle":

https://pluralistic.net/2023/07/31/seize-the-means-of-computation/#the-internet-con

Monopolies are like Pringles (owned by the consumer packaged goods monopolist Procter & Gamble): you can't have just one. As soon as you get a monopoly in one part of the supply chain, every other part of that chain has to monopolize in self-defense.

Think of healthcare. Consolidation in pharma lead to price-gouging, where hospitals were suddenly paying 1,000% more for routine drugs. Hospitals formed regional monopolies and boycotted pharma companies unless they lowered their prices - and then turned around and screwed insurers, jacking up the price of care. Health insurers gobbled each other up in an orgy of mergers and fought the hospitals.

Now the health care system is composed of a series of gigantic, abusive monopolists - pharma, hospitals, medical equipment, pharmacy benefit managers, insurers - and they all conspire to wreck the lives of only two parts of the system who can't fight back: patients and health care workers. Patients pay more for worse care, and medical workers get paid less for worse working conditions.

So while there was no question that a PRH takeover of Simon & Schuster would be bad for writers and readers, it was also clear that S&S - and indeed, all of the Big Five publishers - would be under pressure from the monopolies in their own supply chain. What's more, it was clear that S&S couldn't remain tethered to Paramount, its current owner.

Last week, Paramount announced that it was going to flip S&S to KKR, one of the world's most notorious private equity companies. KKR has a long, long track record of ghastly behavior, and its portfolio currently includes other publishing industry firms, including one rotten monopolist, raising similar concerns to the ones that scuttled the PRH takeover last year:

https://www.nytimes.com/2023/08/07/books/booksupdate/paramount-simon-and-schuster-kkr-sale.html

Let's review a little of KKR's track record, shall we? Most spectacularly, they are known for buying and destroying Toys R Us in a deal that saw them extract $200m from the company, leaving it bankrupt, with lifetime employees getting $0 in severance even as its executives paid themselves tens of millions in "performance bonuses":

https://memex.craphound.com/2018/06/03/private-equity-bosses-took-200m-out-of-toys-r-us-and-crashed-the-company-lifetime-employees-got-0-in-severance/

The pillaging of Toys R Us isn't the worst thing KKR did, but it was the most brazen. KKR lit a beloved national chain on fire and then walked away, hands in pockets, whistling. They didn't even bother to clear their former employees' sensitive personnel records out of the unlocked filing cabinets before they scarpered:

https://memex.craphound.com/2018/09/23/exploring-the-ruins-of-a-toys-r-us-discovering-a-trove-of-sensitive-employee-data/

But as flashy as the Toys R Us caper was, it wasn't the worst. Private equity funds specialize in buying up businesses, loading them with debts, paying themselves, and then leaving them to collapse. They're sometimes called vulture capitalists, but they're really *vampire capitalists*:

https://www.motherjones.com/politics/2022/05/private-equity-buyout-kkr-houdaille/

Given a choice, PE companies don't want to prey on sick businesses - they preferentially drain off value from *thriving* ones, preferably ones that we *must* use, which is why PE - and KKR in particular - *loves* to buy health care companies.

Heard of the "surprise billing epidemic"? That's where you go to a hospital that's covered by your insurer, only to discover - after the fact - that the emergency room is operated by a separate, PE-backed company that charges you thousands for junk fees. KKR and Blackstone invented this scam, then funneled millions into fighting the No Surprises Act, which more-or-less killed it:

https://pluralistic.net/2020/04/21/all-in-it-together/#doctor-patient-unity

KKR took one of the nation's largest healthcare providers, Envision, hostage to surprise billing, making it dependent on these fraudulent payments. When Congress finally acted to end this scam, KKR was able to take to the nation's editorial pages and damn Congress for recklessly endangering all the patients who relied on it:

https://pluralistic.net/2022/03/14/unhealthy-finances/#steins-law

Like any smart vampire, KKR doesn't drain its victim in one go. They find all kinds of ways to stretch out the blood supply. During the pandemic, KKR was front of the line to get massive bailouts for its health-care holdings, even as it fired health-care workers, increasing the workload and decreasing the pay of the survivors of its indiscriminate cuts:

https://pluralistic.net/2020/04/11/socialized-losses/#socialized-losses

It's not just emergency rooms. KKR bought and looted homes for people with disabilities, slashed wages, cut staff, and then feigned surprise at the deaths, abuse and misery that followed:

https://www.buzzfeednews.com/article/kendalltaggart/kkr-brightspring-disability-private-equity-abuse

Workers' wages went down to $8/hour, and they were given *36 hour shifts*, and then KKR threatened to have any worker who walked off the job *criminally charged* with patient abandonment:

https://pluralistic.net/2023/06/02/plunderers/#farben

For KKR, people with disabilities and patients make great victims - disempowered and atomized, unable to fight back. No surprise, then, that so many of KKR's scams target poor people - another group that struggles to get justice when wronged. KKR took over Dollar General in 2007 and embarked on a nationwide expansion campaign, using abusive preferential distributor contracts and targeting community-owned grocers to trap poor people into buying the most heavily processed, least nutritious, most profitable food available:

https://pluralistic.net/2023/03/27/walmarts-jackals/#cheater-sizes

94.5% of the Paycheck Protection Program - designed to help small businesses keep their workers payrolled during lockdown - went to giant businesses, fraudulently siphoned off by companies like Longview Power, 40% owned by KKR:

https://pluralistic.net/2020/04/20/great-danes/#ppp

KKR also helped engineer a loophole in the Trump tax cuts, convincing Justin Muzinich to carve out taxes for C-Corporations, which let KKR save *billions* in taxes:

https://pluralistic.net/2020/06/02/broken-windows/#Justin-Muzinich

KKR sinks its fangs in every part of the economy, thanks to the vast fortunes it amassed from its investors, ripped off from its customers, and fraudulently obtained from the public purse. After the pandemic, KKR scooped up hundreds of companies at firesale prices:

https://pluralistic.net/2020/03/30/medtronic-stole-your-ventilator/#blackstone-kkr

Ironically, the investors in KKR funds are also its victims - especially giant public pension funds, whom KKR has systematically defrauded for years:

https://pluralistic.net/2020/07/22/stimpank/#kentucky

And now KKR has come for Simon & Schuster. The buyout was trumpeted to the press as a done deal, but it's far from a *fait accompli*. Before the deal can close, the FTC will have to bless it. That blessing is far from a foregone conclusion. KKR also owns Overdrive, the monopoly supplier of e-lending software to libraries.

Overdrive has a host of predatory practices, loathed by both libraries and publishers (indeed, much of the publishing sector's outrage at library e-lending is really displaced anger at Overdrive). There's a plausible case that the merger of one of the Big Five publishers with the e-lending monopoly will present competition issues every bit as deal-breaking as the PRH/S&S merger posed.

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🔝 Hey look at this

* Nursing Home Inspect https://projects.propublica.org/nursing-homes/ (h/t Nancy Lizza)

“The Littlest Jackal” by Bruce Sterling (1996) https://bruces.medium.com/the-littlest-jackal-by-bruce-sterling-1996-388cbc5cac82

* The First Big Antitrust Trial of the Century Is About to Start https://www.thebignewsletter.com/p/the-first-big-antitrust-trial-of

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🔝 This day in history

#15yrsago Controlling copies isn’t necessarily part of an artist’s livelihood, but getting them accurately attributed is https://www.oblomovka.com/wp/2008/08/07/copyright-fraud-and-window-taxes-no-not-that-windows/

#15yrsago Stealing things according to the “If value, then right” theory https://www.hyperorg.com/blogger/2008/08/03/20-things-ive-stolen/

#15yrsago Deadmalls as new urbanist playgrounds https://web.archive.org/web/20080810100736/https://www.worldchanging.com/local/seattle/archives/008250.html

#15yrsago Interview with the Chicago Tribune https://web.archive.org/web/20080811084607/http://featuresblogs.chicagotribune.com/technology_internetcritic/2008/08/a-long-but-stil.html

#15yrsago Knitting all of Mario level one into a giant scarf https://themarioscarf.blogspot.com

#15yrsago Animatronic waterboarding exhibit at Coney Island https://www.nytimes.com/2008/08/06/arts/design/06wate.html

#15yrsago The Things That Make Me Weak and Strange Get Engineered Away — story about geek monasteries for smart people who don’t fit in https://www.tor.com/2008/08/06/weak-and-strange/
#15yrsago World of Developmentcraft: academic paper on gold farming as a development activity in poor countries https://www.salon.com/2008/08/07/gold_farming_global_economy/

#15yrsago California Supreme Court: Non-compete clauses are not enforceable https://workforce.com/news/non-compete-agreements-going-going-gone

#15yrsago Pacemakers can be remotely pwned https://venturebeat.com/security/defcon-excuse-me-while-i-turn-off-your-pacemaker/

#15yrsago Working Medeco high-security keys can be whittled out of plastic https://www.wired.com/2008/08/medeco-locks-cr/

#10yrsago HOWTO bake nested, hemispherical cakes https://cakecrumbs.me/2013/08/01/spherical-concentric-layer-cake-tutorial/

#10yrsago Audiobook memoir of Disney Imagineering legend Rolly Crump: More Cute Stories https://itskindofacutestory.com/?p=102

#10yrsago US businesses stand to lose up to $35B as a result of PRISM https://www2.itif.org/2013-cloud-computing-costs.pdf

#10yrsago Spectacular Haunted Mansion re-creation with Rollercoaster Tycoon https://thedisneyblog.com/2013/08/08/haunted-mansion-recreated-in-roller-coaster-tycoon/

#10yrsago Knitting as computation https://web.archive.org/web/20130810104616/http://www.k2g2.org/blog:bit.craft:computational_model_of_knitting

#10yrsago Standards bodies explain why they think the law should be copyrighted and paywalled https://www.washingtonpost.com/news/wonk/wp/2013/08/07/should-legal-codes-be-copyrighted-lets-sue-to-find-out/

#10yrsago Bill to cut off funding to schools that ban brandishing a pastry in a gun-like manner http://www.loweringthebar.net/2013/08/bill-would-protect-students-right-to-carry-pastry-guns.html

#10yrsago Crooks rip off nonprofit rape crisis center, then return the stuff with an apology note https://www.scientificamerican.com/article/stolen-computers-arrive-back-at-non-2013-08/

#10yrsago Judge who accepted private-prison bribes to send black kids to jail sentenced to 28 years https://rollingout.com/2013/07/30/judge-must-serve-28-years-after-making-2-million-for-sending-children-to-jail/

#10yrsago Civil Forfeiture: America’s daylight robbery, courtesy of the War on Drugs https://www.newyorker.com/magazine/2013/08/12/taken

#10yrsago US Senate IP address linked to Snowden Wikipedia change from “dissident” to “traitor” https://www.techdirt.com/2013/08/05/someone-using-us-senate-ip-address-edits-wiki-entry-to-change-ed-snowden-dissident-to-traitor/

#10yrsago Jeff Bezos’s letter to the WashPo staff https://www.washingtonpost.com/national/jeff-bezos-on-post-purchase/2013/08/05/e5b293de-fe0d-11e2-9711-3708310f6f4d_story.html

#10yrsago Why writers should stand up for libraries https://www.youtube.com/watch?v=vArSULK9Zzk

#10yrsago Ethical questions for security experts https://docs.google.com/presentation/d/1UfOxCIIlcU-iRcUeA6p6fyEE4qUbSuFMqmSuWjRsL_4/edit?forcehl=1&hl=en#slide=id.p

#10yrsago EB White on why he wrote Charlotte’s Web: “A book is a sneeze” https://web.archive.org/web/20130806171658/http://www.lettersofnote.com/2013/08/a-book-is-sneeze.html

#10yrsago Revealed: the questing, flexible, ramified business-end of a mosquito https://www.youtube.com/watch?v=RLIYuXlUS3k

#10yrsago Atherton, CA’s police blotter: 175 out of 182 reported police stops had drivers with Hispanic surnames https://web.archive.org/web/20140326100901/https://kentbrew.com/profiling-atherton/

#10yrsago Firefox nukes the blink tag https://www.mozilla.org/en-US/firefox/23.0/releasenotes/

#5yrsago Talking copyright, internet freedom, artistic business models, and antitrust with Steal This Show https://torrentfreak.com/steal-show-s04e03-printing-new-reality-cory-doctorow/

#5yrsago New York City makes all prisoner calls free https://www.nytimes.com/2018/08/06/nyregion/phone-calls-free-nyc-jails.html

#5yrsago Former Obama trade official teams up with Trump to create highly profitable TB epidemics in poor countries https://theintercept.com/2018/08/07/tuberculosis-declaration-trump-phrma/

#5yrsago Anonymous declares war on Qanon https://www.youtube.com/watch?v=vFHzrmk5Md0

#5yrsago Cornered FCC admits that its website was never hacked https://techcrunch.com/2018/08/06/fcc-admits-it-was-never-actually-hacked/

#5yrsago UK regulators ban lies in ISP ads, advertised speeds drop by 41% https://arstechnica.com/tech-policy/2018/08/isps-listed-speeds-drop-up-to-41-after-uk-requires-accurate-advertising/

#5yrsago Economic indicators: consumer debt continues to grow, delinquency rises, students face “crippling debt” https://wallstreetonparade.com/2018/08/financial-health-of-u-s-consumer-will-determine-severity-of-the-next-recession/

#5yrsago A gorgeous history of the mid-century modernism by Disney’s finest illustrators of the 1950s https://memex.craphound.com/2018/08/07/a-gorgeous-history-of-the-mid-century-modernism-by-disneys-finest-illustrators-of-the-1950s/

#5yrsago What’s at stake in the fight over printing files for guns https://memex.craphound.com/2018/08/07/whats-at-stake-in-the-fight-over-printing-files-for-guns/

#5yrsago Facebook to banks: give us our users’ financial data and we’ll let them bank with Facebook https://www.wsj.com/articles/facebook-to-banks-give-us-your-data-well-give-you-our-users-1533564049

#5yrsago Betsy DeVos’s summer monstrosity is pure McMansion Hell https://www.vox.com/first-person/2018/8/6/17654434/betsy-devos-yacht-mcmansion-hell

#5yrsago Consumer Reports now evaluates products’ security and privacy https://www.consumerreports.org/digital-payments/mobile-p2p-payment-services-review/

#5yrsago Germany’s top domestic spy advised far right xenophobic political party on how to avoid being billed as “extremists” https://www.wsws.org/en/articles/2018/08/04/germ-a04.html

#5yrsago On the cruelty of ankle-monitors https://www.wired.com/story/opinion-ankle-monitors-are-another-kind-of-jail/

#5yrsago Leaked Facebook memo reveals “psychological trick” developed to entice high-school students to sign on https://www.buzzfeednews.com/article/ryanmac/facebooks-teens-tbh-psychological-trick-memo

#5yrsago Here’s the report that showed the FCC lied about being hacked and then lied about lying https://drive.google.com/file/d/1uPl5NsbXowzbXrYf9KHBp-GVilTLQqyW

#5yrsago Inside the triumphant Alex Jones banned everywhere story is a worrying nuance about free speech and platform dominance https://memex.craphound.com/2018/08/08/inside-the-triumphant-alex-jones-banned-everywhere-story-is-a-worrying-nuance-about-free-speech-and-platform-dominance/

#5yrsago There’s something eerie about bots that teach themselves to cheat https://www.wired.com/story/when-bots-teach-themselves-to-cheat/

#5yrsago Japanese self-sharpening mechanical pencils give the lead a tiny turn every time you lift the tip https://www.youtube.com/watch?v=H_OXoxymeho

#5yrsago Young doctors revolt, force AMA to consider backing single-payer healthcare for the first time https://kffhealthnews.org/news/once-its-greatest-foes-doctors-are-embracing-single-payer/

#5yrsago A machine learning system trained on scholarly journals could correct Wikipedia’s gendered under-representation problem https://www.wired.com/story/using-artificial-intelligence-to-fix-wikipedias-gender-problem/

#5yrsago 12% of music industry revenues go to musicians https://consequence.net/2018/08/musician-12-percent-43-billion-revenue/

#5yrsago Facebook throws an extra $10m at Zuck’s personal security https://www.bloomberg.com/news/articles/2018-08-02/protecting-mark-zuckerberg-just-got-more-expensive-for-facebook

#1yrago So You’ve Decided to Unfollow Me https://pluralistic.net/2022/08/08/locus-of-individuation/#publish-then-filter

#1yrago Epson boobytrapped its printers https://pluralistic.net/2022/08/07/inky-wretches/#epson-salty

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🔝 Colophon

Today's top sources: Gregory Charlin.

Currently writing:

* A Little Brother short story about DIY insulin PLANNING

* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS JAN 2025

* The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FORTHCOMING TOR BOOKS FEB 2024

* Vigilant, Little Brother short story about remote invigilation. FORTHCOMING ON TOR.COM

* Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION

* Spill, a Little Brother short story about pipeline protests. FORTHCOMING ON TOR.COM

Latest podcast: The Internet Con: How to Seize the Means of Computation (audiobook outtake) https://craphound.com/news/2023/08/01/the-internet-con-how-to-seize-the-means-of-computation-audiobook-outtake/

Upcoming appearances:

* Medium Day (online), Aug 12
https://medium.com/tag/medium-day

* Defcon (Las Vegas), Aug 10-13
https://defcon.org/

* San Diego Union Tribune Festival of Books, Aug 19
https://www.sandiegouniontribune.com/festivalofbooks

* Burning Man Center Camp, 1430h, Aug 29
https://playaevents.burningman.org/2023/playa_events/03/

* EFF Awards (San Francisco), Sept 14
https://www.eff.org/awards/effawards/2023

* An Evening with VE Schwab (Des Moines), Oct 2
https://www.thecabinidaho.org/all-events/ve-schwab

Recent appearances:

* Haunted Mansion Ghost Post Panel Live From Midsummer Scream
https://dizneycoasttocoast.libsyn.com/haunted-mansion-ghost-post-panel-live-from-midsummer-scream-disney-podcast-episode-1027

* how big tech makes the internet worse (What's Gonna Happen)
https://www.stitcher.com/show/what-s-gonna-happen/episode/how-big-tech-makes-the-internet-worse-with-cory-doctorow-305645071

* Let The Platforms Burn: Bringing Back the Good Fire of the Old Internet (IETF117)
https://youtu.be/nK7JoGhF338?t=737

Latest books:

* "Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.

* "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com

* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html

* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)

* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html

* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.

Upcoming books:

* The Internet Con: A nonfiction book about interoperability and Big Tech, Verso, September 2023

* The Lost Cause: a post-Green New Deal eco-topian novel about truth and reconciliation with white nationalist militias, Tor Books, November 2023

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