Top Business Negotiations of 2013: Simon & Schuster versus Barnes & Noble

By on / Business Negotiations

When months of negotiations with publishing house Simon & Schuster reached a standoff in January 2013, Barnes & Noble attempted to gain leverage by significantly reducing its orders of Simon & Schuster titles and engaging in other hardball tactics, such as refusing to book the publisher’s authors for in-store readings.

As the last major retail bookstore chain in the United States, Barnes & Noble has been pressing publishers to make steep concessions to enable its survival against Amazon.com and other online retailers. The bookstore chain reportedly sought significantly lower wholesale prices for Simon & Schuster’s books and also tried to charge the publisher more to display its titles in its stores. Simon & Schuster said it simply could not afford to abide by Barnes & Noble’s terms.

Given that Barnes & Noble sells about 20% of consumer books in the United States, Simon & Schuster editors and their associated agents and writers were “apoplectic” about the bookseller’s decision to use them as a bargaining chip, the New York Times reported in March 2013.

In August, the two companies issued a joint statement saying they had resolved their disagreement and looked forward to jointly promoting Simon & Schuster books. Though details of the agreement remain unknown, any gains they achieved would be undercut by the profits each side lost during the months of impasse, when Simon & Schuster books were missing from display tables and shelves. Such penalties often end up undercutting both parties to a negotiation.

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