“It hasn’t been a strong growth industry in a long time, and what little growth there has been recently seems to be arrested,” said Thad McIlroy, a publishing industry analyst.
Simon & Schuster also has several perennial best-sellers on its list, including Joseph Heller’s “Catch-22,” Margaret Mitchell’s “Gone With the Wind” and Dale Carnegie’s “How to Win Friends and Influence People.”
Still, with the rise of Amazon and e-books, the business has suffered. In 1989, one of its best years, the publisher generated $1.3 billion in sales. Last year, sales were $814 million. The company’s profits have also declined, hitting $143 million in 2019, a 6.5 percent drop from the previous year. Legacy media businesses can sell anywhere from five times to 10 times annual profits.
ViacomCBS is looking for $750 million in cost cuts after the December merger of Viacom and CBS. Viacom, the longtime owner of Paramount Pictures and cable networks like MTV and Comedy Central, absorbed the CBS broadcast network and Simon & Schuster as part of the deal.
The newly supersized company has taken a hit in the markets after a weak earnings performance for the three months that ended in December, and the combined business is now worth less than either business before the merger.
The potential sale of Simon & Schuster is part of a great unwinding taking place across the media industry as conglomerates cleave off or close down ancillary businesses. The spate of acquisitions in recent years — AT&T bought Time Warner and the Walt Disney Company absorbed the majority of 21st Century Fox — has largely been a defensive measure against Big Tech and a bet on digital video as the future of entertainment.
Books won’t play a significant role in the coming skirmish, in Mr. Bakish’s view. Simon & Schuster is “not a core asset of the company, it is not video-based, it doesn’t have significant connectivity to our broader business,” he said at an investor conference Wednesday morning.
He went on to praise Simon & Schuster, even as he hung a For Sale sign on its door. “There’s no question that it’s a marquee asset,” Mr. Bakish said. “I’ve had multiple, unsolicited inbound calls.”