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Run, ours in Canadian publishing circles that Neale was to be named to the top job were at least partly fuelled by an announcement in early July that several senior Bantam Doubleday Dell executives in the U.S. had been appointed to top positions in the new Random House. In particular, Peter Olson, who oversees BDD worldwide, was appointed chairman and CEO of Random House, and Erik Engstrom, the CEO of Bantam Doubleday Dell North America, was named president and chief operating ofricer of Random House. Engstrom will oversee the operations of both Random House and Doubleday in Canada.
Bantam Doubleday Dell spokesman Stuart Applebaum -- who now also acts for Random House in the U.S. -- downplayed the speculation about Neale, stating that the company had taken no decision about executive appointments in Canada, and that Random House and Doubleday Canada will continue to run separately.
Speculation about who will take over the president's position at a combined Random House-Doubleday in Canada intensified in mid-August, but there was no word from Bertelsmann's New York offices about the nature or timing of a decision.
The appointment of a president, along with further changes at Bertelsmann's Canadian holdings, will likely be announced this fall. The German media conglomerate is expected to wait until the outcome of an Investment Canada review -- to be completed by mid-October to announce its intentions for Canada.
Run, ours in Canadian publishing circles that Neale was to be named to the top job were at least partly fuelled by an announcement in early July that several senior Bantam Doubleday Dell executives in the U.S. had been appointed to top positions in the new Random House. In particular, Peter Olson, who oversees BDD worldwide, was appointed chairman and CEO of Random House, and Erik Engstrom, the CEO of Bantam Doubleday Dell North America, was named president and chief operating ofricer of Random House. Engstrom will oversee the operations of both Random House and Doubleday in Canada.
Bantam Doubleday Dell spokesman Stuart Applebaum -- who now also acts for Random House in the U.S. -- downplayed the speculation about Neale, stating that the company had taken no decision about executive appointments in Canada, and that Random House and Doubleday Canada will continue to run separately.
Nevertheless, several industry sources say Neale, a 14-year veteran of Doubleday Canada, is the logical choice to head up Bertelsmann's Canadian operations. Described by one source as a consensus-seeker and hard-working, he is said to be well liked within the Bertelsmann empire and is seen as a savvy, behind-the-scenes player. "He cultivates all kinds of relationships," said a source. "He has a wide and deep range of contacts throughout the publishing industry."
Many acknowledged, however, that Bertlesmann's decision will not be easy. Random House of Canada president David Kent is highly regarded for overseeing the development of an extremely successful publishing program and for emphasizing the importance of customer service. "In terms of running a good publishing operation, the results speak for themselves," said one source.
The timing of Bertelsmann's announcement will depend on when Investment Canada completes its review of the planned merger. Peter Caskey, director of investment review, confirmed that Bertelsmann had submitted a filing to his department in early August, and that a decision would be issued by mid-October, possibly earlier. The normal time frame for a review from the date of filing is 45 days.
So far there has been little opposition to the deal. Reid Lally, a senior commerce officer with the Bureau of Competition Policy, says the large number of publishers in the Canadian book market and the relatively small market share of a combined Random House-Doubleday make an investigation by his office unnecessary.
Investment Canada will use six criteria to assess the impact of the merger, including the expected impact on employment and productivity in Canada, participation in the business by Canadians, and compatibility with existing cultural policies. Job losses send up a red flag, says Caskey, but it depends on the nature of the losses. "If a company thinks it can reduce employment by 5% and become more efficient, that's one thing," he says. "But if it decides it is no longer going to do certain functions in Canada, that would be of greater concern." Publishers and booksellers are generally not consulted for an Investment Canada review, says Caskey.
Investment Canada is unlikely to rule against the merger -- in its 13-year history it has never barred such a deal -- but it could ask Bertelsmann for commitments to guarantee a certain number of jobs in Canada, for example, or to invest a certain amount of money in publishing Canadian books.
Copyright Quill and Quire Sep 1998