1 00:00:03,160 --> 00:00:07,960 Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio. 2 00:00:11,360 --> 00:00:15,320 Speaker 1: No more tolerance for abusive actions by monopolies, No more 3 00:00:15,480 --> 00:00:20,600 Speaker 1: bad mergers that lead to mass layoffs, higher prices, fewer 4 00:00:20,600 --> 00:00:25,079 Speaker 1: options for workers and consumers alike. And the Jonesie Department's 5 00:00:25,120 --> 00:00:28,960 Speaker 1: antitrust division has been following that edict from President Joe 6 00:00:29,040 --> 00:00:33,239 Speaker 1: Biden without much success in court until this week. A 7 00:00:33,320 --> 00:00:36,960 Speaker 1: federal judge has blocked Penguin Random Houses two point one 8 00:00:37,000 --> 00:00:41,440 Speaker 1: eight billion dollar acquisition of rival book publisher Simon and Schuster, 9 00:00:41,920 --> 00:00:44,800 Speaker 1: ruling that the purchase of the fourth largest US book 10 00:00:44,840 --> 00:00:48,879 Speaker 1: publisher by the largest publisher would lessen competition in the 11 00:00:48,960 --> 00:00:53,239 Speaker 1: market for publishing rights to anticipated top selling books and 12 00:00:53,320 --> 00:00:57,640 Speaker 1: lower advances for authors. Joining me is antitrust expert Harry First, 13 00:00:57,720 --> 00:01:00,840 Speaker 1: a professor at n y U Law School. Harry before 14 00:01:00,840 --> 00:01:05,559 Speaker 1: this verdict, the Justice Department had lost three antitrust challenges 15 00:01:05,760 --> 00:01:08,360 Speaker 1: in a row. So how important is this for the 16 00:01:08,400 --> 00:01:15,000 Speaker 1: Biden administration and its aggressive approach to curbing consolidation. Well, 17 00:01:15,240 --> 00:01:18,400 Speaker 1: it's better to win than lose. They really needed this win, 18 00:01:18,560 --> 00:01:22,280 Speaker 1: It's true, and I'm not sure how aggressive the other 19 00:01:22,360 --> 00:01:25,280 Speaker 1: cases were. I mean they were cases. Let's put it 20 00:01:25,319 --> 00:01:29,600 Speaker 1: a little historical context. As a general rule, when the 21 00:01:29,720 --> 00:01:35,240 Speaker 1: Justice Department over time has brought merger cases in district courts, 22 00:01:35,360 --> 00:01:38,960 Speaker 1: they have often found skeptical judges, and this goes back 23 00:01:39,040 --> 00:01:42,319 Speaker 1: many years. So in some sense this isn't new. What 24 00:01:42,560 --> 00:01:45,680 Speaker 1: is new is that they're actually bringing cases and litigating 25 00:01:45,720 --> 00:01:48,880 Speaker 1: them rather than settling them. So in a sense, it's 26 00:01:48,880 --> 00:01:53,880 Speaker 1: a re emergence of an old pattern. Now in former days, 27 00:01:53,960 --> 00:01:57,200 Speaker 1: this is going back to before the nineteen I guess 28 00:01:57,240 --> 00:02:00,640 Speaker 1: nineteen seventy four really goes back to nine, you know three, 29 00:02:01,240 --> 00:02:06,280 Speaker 1: Congress dealt with the skepticism by trial judges by allowing 30 00:02:06,360 --> 00:02:09,640 Speaker 1: for direct appeal and anti trust civil cases to the 31 00:02:09,720 --> 00:02:13,040 Speaker 1: Supreme Court because they were so important. That changed in 32 00:02:15,240 --> 00:02:18,680 Speaker 1: and as a result of that and other things, there 33 00:02:18,680 --> 00:02:22,160 Speaker 1: really hasn't been a merger case in the Supreme Court 34 00:02:22,600 --> 00:02:26,240 Speaker 1: since then. So all the cases have been federal district 35 00:02:26,240 --> 00:02:29,680 Speaker 1: courts and courts of appeals. But district court judges are 36 00:02:29,680 --> 00:02:35,679 Speaker 1: often skeptical, and they are often swayed by the executives themselves, 37 00:02:35,720 --> 00:02:39,840 Speaker 1: who come in and testify, often persuasively about their business. 38 00:02:40,000 --> 00:02:44,120 Speaker 1: So it's not surprising that the track record doesn't look 39 00:02:44,280 --> 00:02:47,880 Speaker 1: so good, but it is nice for the Justice Department. 40 00:02:48,080 --> 00:02:52,440 Speaker 1: Two have won one. Why are district court judges so skeptical? 41 00:02:52,840 --> 00:02:56,520 Speaker 1: Why are they believing the CEOs on one side? Is 42 00:02:56,560 --> 00:02:59,440 Speaker 1: the Justice Department nut just not putting on a good 43 00:02:59,520 --> 00:03:02,480 Speaker 1: enough case. Well, this is a question a lot of 44 00:03:02,480 --> 00:03:05,720 Speaker 1: people ask, and I think the enforcers ask themselves. So 45 00:03:06,040 --> 00:03:09,080 Speaker 1: if for merger law, the law requires the judge to 46 00:03:09,120 --> 00:03:12,440 Speaker 1: make a prediction, what might the effect of this merger 47 00:03:12,480 --> 00:03:16,960 Speaker 1: beyond competition in the future. And in the famous words, 48 00:03:17,360 --> 00:03:20,320 Speaker 1: the problem with predictions is that they're about the future, 49 00:03:20,680 --> 00:03:24,600 Speaker 1: so you know who knows, and judges complain about this 50 00:03:24,639 --> 00:03:29,000 Speaker 1: and feel a little uncomfortable. So, particularly in recent times, 51 00:03:29,320 --> 00:03:33,480 Speaker 1: you have the Justice Department often bringing in economists who 52 00:03:33,560 --> 00:03:36,960 Speaker 1: have nice theories, who have models, to say, well, we 53 00:03:37,040 --> 00:03:38,800 Speaker 1: think the price is going to go up by such 54 00:03:38,840 --> 00:03:41,560 Speaker 1: and such, And then you have the executive who know 55 00:03:41,680 --> 00:03:43,920 Speaker 1: their business and they come in and say, look, this 56 00:03:44,000 --> 00:03:46,040 Speaker 1: is the greatest darn thing in the world, and we're 57 00:03:46,080 --> 00:03:50,440 Speaker 1: under such pressures and this will allow us to compete better. 58 00:03:50,920 --> 00:03:54,160 Speaker 1: There has never been a merger in which the parties 59 00:03:54,160 --> 00:03:58,000 Speaker 1: have said, you know, this merger is anti competitive, so 60 00:03:58,200 --> 00:04:02,920 Speaker 1: it's always pro competitive and often not always, but often 61 00:04:03,280 --> 00:04:07,120 Speaker 1: these witnesses are pretty persuasive. I mean, that's how they 62 00:04:07,160 --> 00:04:11,480 Speaker 1: got to high positions in their company. Antitrust is usually 63 00:04:11,520 --> 00:04:15,440 Speaker 1: focused on harm to consumers, but the Justice Department's theory 64 00:04:15,600 --> 00:04:20,919 Speaker 1: here was harmed to authors and authors earnings. Was this 65 00:04:21,000 --> 00:04:24,840 Speaker 1: a novel approach. So this is the second interesting thing 66 00:04:24,839 --> 00:04:27,000 Speaker 1: about the case. The first one was that they want 67 00:04:27,200 --> 00:04:31,599 Speaker 1: The second interesting thing is the Justice Department focused on 68 00:04:32,040 --> 00:04:35,920 Speaker 1: as they like to call it, on labor, so on workers. 69 00:04:36,320 --> 00:04:39,360 Speaker 1: And this has been an important part of the Biden 70 00:04:39,360 --> 00:04:43,520 Speaker 1: administration's political focus, that they want to do things to 71 00:04:43,600 --> 00:04:48,800 Speaker 1: make workers incomes higher, and this case was positioned to 72 00:04:49,000 --> 00:04:53,039 Speaker 1: focus on that. On workers. Now, when we think of workers, 73 00:04:53,279 --> 00:04:55,800 Speaker 1: we think of, you know, people in the oil field, 74 00:04:56,200 --> 00:05:00,799 Speaker 1: people on manufacturing lines. We don't usually think of Stephen King. 75 00:05:01,040 --> 00:05:04,760 Speaker 1: So workers and million dollar advances. I don't know, but 76 00:05:04,880 --> 00:05:08,600 Speaker 1: here it's authors. Now, from an economist point of view, 77 00:05:08,880 --> 00:05:12,680 Speaker 1: and really also from a technically any trust point of view, 78 00:05:13,200 --> 00:05:17,200 Speaker 1: workers or labor is another market, and any trust is 79 00:05:17,200 --> 00:05:20,640 Speaker 1: concerned with competition and markets. So you want to have 80 00:05:20,960 --> 00:05:26,160 Speaker 1: appropriate competition, not just for firms as they sell products, 81 00:05:26,160 --> 00:05:30,600 Speaker 1: but firms as they buy products from their suppliers. Now 82 00:05:30,880 --> 00:05:35,440 Speaker 1: the suppliers here are authors, which supply their talent, and 83 00:05:35,680 --> 00:05:38,279 Speaker 1: for the markets to work right, there has to be 84 00:05:38,400 --> 00:05:42,400 Speaker 1: competition among buyers for what they have to produce. So 85 00:05:42,480 --> 00:05:45,320 Speaker 1: you want competition, as they say, on both sides of 86 00:05:45,320 --> 00:05:48,520 Speaker 1: the market, on the sell side and on the buy side. 87 00:05:48,839 --> 00:05:52,719 Speaker 1: So in one sense, yes, it's unusual, not that there 88 00:05:52,839 --> 00:05:56,719 Speaker 1: haven't been. There have been cases looking at the by side, 89 00:05:57,279 --> 00:06:01,320 Speaker 1: so that fits into an economic perspective. But yes, you know, 90 00:06:01,400 --> 00:06:05,240 Speaker 1: concern for labor put that way is part of the 91 00:06:05,320 --> 00:06:09,080 Speaker 1: political message of the administration and of any trust and 92 00:06:09,160 --> 00:06:14,040 Speaker 1: forces as to what any trust can do in the economy. So, Harry, 93 00:06:14,080 --> 00:06:19,080 Speaker 1: the Justice Department said the deal would harm authors getting 94 00:06:19,120 --> 00:06:24,320 Speaker 1: book advances. How did Penguin Random House argue that a 95 00:06:24,360 --> 00:06:28,440 Speaker 1: consolidation would help authors? On its face, it seems like 96 00:06:28,720 --> 00:06:33,080 Speaker 1: less competition lower advances. Well, the way any trust goes 97 00:06:33,360 --> 00:06:37,120 Speaker 1: is the pro competitive part. Now, this will make everybody 98 00:06:37,200 --> 00:06:42,160 Speaker 1: better is considered an efficiency defense. So you know, why 99 00:06:42,279 --> 00:06:45,159 Speaker 1: is this merger good? So it's a technical matter. The 100 00:06:45,240 --> 00:06:49,240 Speaker 1: first part is the government has to show that the 101 00:06:49,360 --> 00:06:52,599 Speaker 1: merger is bad. It's not up to defendence to prove 102 00:06:52,680 --> 00:06:55,160 Speaker 1: it's good. Of course, they want to make an argument 103 00:06:55,600 --> 00:06:59,640 Speaker 1: that they'll save money, that they'll produce more efficiently, that 104 00:06:59,760 --> 00:07:04,880 Speaker 1: they'll be competitive in the marketplace with all sorts of 105 00:07:05,040 --> 00:07:09,200 Speaker 1: other firms that we might not think of as publishers 106 00:07:09,240 --> 00:07:13,760 Speaker 1: today but that are competing with them, meaning Amazon or 107 00:07:13,920 --> 00:07:17,840 Speaker 1: self publishers. There are people who publish books themselves get 108 00:07:17,840 --> 00:07:20,880 Speaker 1: on the best seller list in fact or published through Amazon, 109 00:07:21,400 --> 00:07:24,640 Speaker 1: so that may be part of the affirmative story. But 110 00:07:24,920 --> 00:07:28,000 Speaker 1: the judge didn't really let them tell an affirmative story. 111 00:07:28,320 --> 00:07:33,160 Speaker 1: She said that the efficiencies weren't well enough independently verified. 112 00:07:33,520 --> 00:07:37,560 Speaker 1: So as I said, no party to emerger, ever, says 113 00:07:37,680 --> 00:07:40,360 Speaker 1: this will make us less efficient and allow us to 114 00:07:40,440 --> 00:07:44,400 Speaker 1: raise prices. They always say it will make us more efficient, 115 00:07:44,480 --> 00:07:48,440 Speaker 1: so often enforcers, and this time the judge can be 116 00:07:48,480 --> 00:07:51,960 Speaker 1: a little skeptical of these stories, so they didn't really 117 00:07:52,280 --> 00:07:54,640 Speaker 1: get to tell this story. What they didn't try to 118 00:07:54,720 --> 00:07:58,280 Speaker 1: do was to chip away at the government story. So 119 00:07:58,880 --> 00:08:01,960 Speaker 1: it wasn't really going to affect these advances very much 120 00:08:01,960 --> 00:08:05,040 Speaker 1: because there's still a lively market. And what market exactly 121 00:08:05,160 --> 00:08:08,280 Speaker 1: we're talking about. There are lots of authors and actually 122 00:08:08,320 --> 00:08:11,720 Speaker 1: a lot of competitions still even after the merger for 123 00:08:11,800 --> 00:08:14,720 Speaker 1: advances to these authors. So it's not just as if 124 00:08:14,760 --> 00:08:17,760 Speaker 1: you have these two and then finally, this is such 125 00:08:17,800 --> 00:08:21,680 Speaker 1: a little part of you know, the whole market of 126 00:08:22,000 --> 00:08:28,280 Speaker 1: what authors faced that it's not significant. The judge Florence 127 00:08:28,320 --> 00:08:31,400 Speaker 1: Pan and we don't have her opinion yet because there's 128 00:08:31,600 --> 00:08:33,960 Speaker 1: confidential facts in there that they're going to have to 129 00:08:34,000 --> 00:08:37,560 Speaker 1: take out, but she said that in order that the 130 00:08:37,679 --> 00:08:41,400 Speaker 1: Justice Department had demonstrated that the merger might substantially harm 131 00:08:41,520 --> 00:08:45,640 Speaker 1: competition in the market for US publishing rights to anticipated 132 00:08:45,760 --> 00:08:49,960 Speaker 1: top selling books. Is this a case really of there's 133 00:08:50,000 --> 00:08:53,280 Speaker 1: been so much consolidation in the publishing industry for twenty 134 00:08:53,360 --> 00:08:56,640 Speaker 1: years and taking it from five to four was just 135 00:08:57,120 --> 00:09:01,840 Speaker 1: a step too far. Well, my answer would be sure, 136 00:09:02,160 --> 00:09:05,520 Speaker 1: But under current law that's not enough. You're not going 137 00:09:05,600 --> 00:09:07,960 Speaker 1: to win a case that way. Judges will say, well, 138 00:09:08,000 --> 00:09:11,280 Speaker 1: so tell me why four is not enough to be competition. 139 00:09:11,720 --> 00:09:16,080 Speaker 1: So the government has to define a market and has 140 00:09:16,120 --> 00:09:20,000 Speaker 1: to show some effect within a defined market. Now, what's critical, 141 00:09:20,080 --> 00:09:22,920 Speaker 1: even though the judge you know, didn't release her opinion, 142 00:09:23,360 --> 00:09:27,480 Speaker 1: justin what you said shows that she accepted the definition 143 00:09:27,520 --> 00:09:31,480 Speaker 1: of a market that the Justice Department put forward, which 144 00:09:31,679 --> 00:09:35,520 Speaker 1: is sort of an unusual market market for US publishing 145 00:09:35,640 --> 00:09:39,880 Speaker 1: rights to anticipate in top selling books. So exactly what 146 00:09:39,920 --> 00:09:43,720 Speaker 1: books are those? Whatever it is, it's actually not the 147 00:09:43,800 --> 00:09:48,880 Speaker 1: market for advances to all authors. So we are talking 148 00:09:48,920 --> 00:09:52,760 Speaker 1: about the top selling authors, and these are the authors 149 00:09:52,800 --> 00:09:58,000 Speaker 1: that get the six figure or seven figure advances anticipated 150 00:09:58,040 --> 00:10:00,520 Speaker 1: being the key word. These are the ones that publishers 151 00:10:00,559 --> 00:10:02,679 Speaker 1: bet are really going to sell a lot, and so 152 00:10:02,760 --> 00:10:06,120 Speaker 1: they're willing to compete for the rights to publish those 153 00:10:06,160 --> 00:10:10,520 Speaker 1: books and to pay the author's hefty amount as an advance. 154 00:10:10,600 --> 00:10:13,640 Speaker 1: So the judge accepted the notion that was put forward 155 00:10:13,640 --> 00:10:16,720 Speaker 1: by the Justice Department's economists that this is a well 156 00:10:16,800 --> 00:10:20,960 Speaker 1: enough to fine market in which you can show that 157 00:10:21,080 --> 00:10:26,840 Speaker 1: putting these two firms together will result in lowering the 158 00:10:26,920 --> 00:10:31,280 Speaker 1: price that they pay for the author's right. Penguin Random 159 00:10:31,320 --> 00:10:35,199 Speaker 1: House came out with a statement they strongly disagree with 160 00:10:35,280 --> 00:10:38,160 Speaker 1: the decision, and as you said, they said they believe 161 00:10:38,240 --> 00:10:41,840 Speaker 1: this merger will be pro competitive, and they said the 162 00:10:41,880 --> 00:10:45,000 Speaker 1: Department of Justice is focused on advantage to the world's 163 00:10:45,040 --> 00:10:49,679 Speaker 1: best paid authors instead of consumers or the intense competitiveness 164 00:10:49,800 --> 00:10:53,240 Speaker 1: in the publishing sector runs contrary to its mission to 165 00:10:53,440 --> 00:10:57,959 Speaker 1: ensure fair competition. So they say they'll appeal. If they 166 00:10:57,960 --> 00:11:01,240 Speaker 1: do appeal, does that look like it's where they're going 167 00:11:01,280 --> 00:11:04,120 Speaker 1: to focus the appeal on the market. You know, just 168 00:11:04,280 --> 00:11:07,280 Speaker 1: from reading that line, the first focus would be on 169 00:11:07,520 --> 00:11:11,520 Speaker 1: the market. Definition is wrong, and they didn't really, in 170 00:11:11,559 --> 00:11:14,480 Speaker 1: a sense define a market as it's meant under any 171 00:11:14,520 --> 00:11:17,360 Speaker 1: trust law. What they define was the sort of head 172 00:11:17,360 --> 00:11:22,120 Speaker 1: to head competition between Penguin and Simon and Schuster for 173 00:11:22,440 --> 00:11:25,400 Speaker 1: rights to a few books. But you know, a couple 174 00:11:25,440 --> 00:11:28,600 Speaker 1: of books does not a market, make very other competitors 175 00:11:28,640 --> 00:11:32,719 Speaker 1: for those rights, and it's not a real market. So 176 00:11:32,800 --> 00:11:35,680 Speaker 1: that's the first thing. The second thing that they probably 177 00:11:35,720 --> 00:11:39,880 Speaker 1: will harp on if they did appeal this is that 178 00:11:40,160 --> 00:11:44,720 Speaker 1: even if there are effects among these few authors, consumers 179 00:11:45,080 --> 00:11:47,760 Speaker 1: have not been hurt, and that the purpose of any 180 00:11:47,760 --> 00:11:52,240 Speaker 1: trust laws is protecting consumer welfare and this does not 181 00:11:52,440 --> 00:11:56,800 Speaker 1: translate into harm for consumers. And in fact, the Justice 182 00:11:56,840 --> 00:12:02,319 Speaker 1: Department's economists testified that he did not find any harm 183 00:12:02,440 --> 00:12:06,800 Speaker 1: in downstream markets to consumers, and that's a direct quote 184 00:12:06,880 --> 00:12:11,200 Speaker 1: from his testimony. So there it is. They didn't show 185 00:12:11,280 --> 00:12:15,480 Speaker 1: any real harm to consumers. And in fact, if the 186 00:12:15,559 --> 00:12:19,760 Speaker 1: judge had allowed, as she should have proof of efficiency defenses, 187 00:12:20,080 --> 00:12:22,280 Speaker 1: we would have shown the consumers or help by what 188 00:12:22,400 --> 00:12:25,280 Speaker 1: happened there. And there's there's no diminution in the number 189 00:12:25,360 --> 00:12:28,440 Speaker 1: of these best selling books. We'll have the same, no 190 00:12:28,520 --> 00:12:32,000 Speaker 1: effect on output. You know, Stephen King isn't going to say, 191 00:12:32,160 --> 00:12:35,480 Speaker 1: oh my god, I'm going to stop writing now. Um, 192 00:12:35,480 --> 00:12:38,520 Speaker 1: he's still gonna write. All these authors are still gonna write. 193 00:12:38,800 --> 00:12:42,079 Speaker 1: We're still going to have top selling books, but we're 194 00:12:42,080 --> 00:12:45,720 Speaker 1: gonna squeeze some of that advanced money out of the 195 00:12:45,800 --> 00:12:49,240 Speaker 1: system and it will enable us to pay other authors more. 196 00:12:49,600 --> 00:12:51,480 Speaker 1: I mean, you know you can spin it out. Now. 197 00:12:51,600 --> 00:12:54,439 Speaker 1: Are they gonna take this appeal and will it be successful? 198 00:12:54,920 --> 00:12:57,160 Speaker 1: Obviously I have no idea it is the first one, 199 00:12:57,679 --> 00:12:59,920 Speaker 1: and some sense that own an idea the second one 200 00:13:00,000 --> 00:13:02,800 Speaker 1: because I haven't read her opinion, but it would not 201 00:13:02,840 --> 00:13:06,600 Speaker 1: surprise me if they're not successful on appeal, and depending 202 00:13:06,640 --> 00:13:09,439 Speaker 1: on how she writes her opinion, because there is a 203 00:13:09,559 --> 00:13:14,240 Speaker 1: history of accepting by side problems and input markets. And 204 00:13:14,600 --> 00:13:16,760 Speaker 1: I think it would remain to be seen whether they 205 00:13:16,760 --> 00:13:20,600 Speaker 1: would have a successful appeal, but hard to assess right now. 206 00:13:20,960 --> 00:13:23,120 Speaker 1: There's a question as to whether they will even be 207 00:13:23,200 --> 00:13:27,439 Speaker 1: able to appeal because the purchase agreement between Penguin and 208 00:13:28,120 --> 00:13:32,640 Speaker 1: Simon and Schuster's parent company, Paramount Global, expires either in 209 00:13:32,720 --> 00:13:35,560 Speaker 1: mid November the end of November, I don't know which, 210 00:13:35,800 --> 00:13:39,040 Speaker 1: and an appeal would require more time. So they need 211 00:13:39,080 --> 00:13:44,480 Speaker 1: to extend the arrangement. And under the agreement, Penguin has 212 00:13:44,559 --> 00:13:48,120 Speaker 1: to pay Paramount a two hundred million dollar breakup fee 213 00:13:48,120 --> 00:13:50,720 Speaker 1: if the deal doesn't go through. So Paramount could just 214 00:13:50,760 --> 00:13:53,800 Speaker 1: walk away, right, Well, they're going to have a fun 215 00:13:53,880 --> 00:13:58,240 Speaker 1: negotiation over that, aren't they. Here's a quick guess. If 216 00:13:58,760 --> 00:14:02,600 Speaker 1: if after they look at the hinion, you know, the lawyers, 217 00:14:02,640 --> 00:14:05,800 Speaker 1: I think maybe this is challengeable. You know, then you're 218 00:14:05,800 --> 00:14:10,800 Speaker 1: talking money, so we renegotiate the breakup fee. I mean 219 00:14:10,880 --> 00:14:14,120 Speaker 1: it's a lot of money that the steal. It's two 220 00:14:14,120 --> 00:14:17,120 Speaker 1: plus billion dollars or so, you know, it may be 221 00:14:17,520 --> 00:14:20,120 Speaker 1: that it's in the interest, you know, of Simon and 222 00:14:20,160 --> 00:14:24,040 Speaker 1: Schuster to do what it can to keep this going 223 00:14:24,120 --> 00:14:26,840 Speaker 1: if it feels that they could be successful on appeal 224 00:14:27,280 --> 00:14:30,760 Speaker 1: and save the deal. So two million a lot of 225 00:14:30,760 --> 00:14:36,560 Speaker 1: money to me, but um, you know, obviously they can 226 00:14:36,600 --> 00:14:41,160 Speaker 1: negotiate their way through this. If the parties can reach 227 00:14:41,200 --> 00:14:44,840 Speaker 1: a deal that seems beneficial to both thoughts, So it's 228 00:14:44,840 --> 00:14:47,560 Speaker 1: not over till it's over. My guess is the first 229 00:14:47,600 --> 00:14:51,200 Speaker 1: step is seeing what the touch's opinion looks like, and 230 00:14:51,680 --> 00:14:53,480 Speaker 1: you know whether they think they've got a case to 231 00:14:53,560 --> 00:14:57,600 Speaker 1: make on appeal. The CEO of Harper Collins, which also 232 00:14:57,680 --> 00:15:02,200 Speaker 1: wanted to buy Simon and Schuster, testify that they'd still 233 00:15:02,240 --> 00:15:06,560 Speaker 1: be interested if Penguin's bid was blocked. Would their attempt 234 00:15:06,640 --> 00:15:08,720 Speaker 1: to buy it if it came to that also be 235 00:15:08,840 --> 00:15:13,440 Speaker 1: challenged by the Justice Department. So Harper Collins, I think 236 00:15:13,520 --> 00:15:16,040 Speaker 1: is there. But the theory doesn't have to do with 237 00:15:16,080 --> 00:15:19,000 Speaker 1: their ranking. I mean, the way the case was tried, 238 00:15:19,160 --> 00:15:21,600 Speaker 1: and the theory of the case is there was a 239 00:15:21,880 --> 00:15:25,920 Speaker 1: sufficient head to head competition for these rights between the 240 00:15:25,960 --> 00:15:29,680 Speaker 1: two firms that if you ended that head to head competition, 241 00:15:30,320 --> 00:15:34,000 Speaker 1: you would end competition over a lot of auctions for 242 00:15:34,400 --> 00:15:39,040 Speaker 1: these projected best selling works. So it would be hard 243 00:15:39,080 --> 00:15:44,880 Speaker 1: to answer that question without examining the bidding between Penguin 244 00:15:45,040 --> 00:15:48,760 Speaker 1: and Harper Collins whether they've been bidding on the same books. 245 00:15:49,240 --> 00:15:52,840 Speaker 1: If they haven't, that theory isn't really going to work. 246 00:15:53,080 --> 00:15:55,880 Speaker 1: So then the question would be is there some other 247 00:15:56,040 --> 00:15:59,560 Speaker 1: theory that deals with the five to four is basically 248 00:15:59,600 --> 00:16:03,920 Speaker 1: a theory that with fewer firms it's easier to sort 249 00:16:03,920 --> 00:16:07,600 Speaker 1: of collude without being in the same room, you know, 250 00:16:08,040 --> 00:16:11,360 Speaker 1: there's less pressure on price, and so they'd have to 251 00:16:11,800 --> 00:16:14,600 Speaker 1: think about a different theory than they used in this case. 252 00:16:14,960 --> 00:16:18,280 Speaker 1: So not a foregoing conclusion that the government would be 253 00:16:18,320 --> 00:16:22,240 Speaker 1: able to challenge that merger. On the other hand, it 254 00:16:22,320 --> 00:16:26,000 Speaker 1: seems to me they would, thanks so much, Harry. That's 255 00:16:26,000 --> 00:16:30,760 Speaker 1: Professor Harry First of n y U Law School. Three 256 00:16:30,760 --> 00:16:35,400 Speaker 1: abortion rights protesters were arrested and charged on Wednesday after 257 00:16:35,520 --> 00:16:40,080 Speaker 1: interrupting Supreme Court oral arguments to blast the Court's ruling 258 00:16:40,200 --> 00:16:43,600 Speaker 1: overturning Roe versus Wade and to call on women to 259 00:16:43,720 --> 00:16:47,680 Speaker 1: vote in next week's election. But poll after poll shows 260 00:16:47,720 --> 00:16:51,280 Speaker 1: that abortion is not the top issue on voters minds. 261 00:16:51,520 --> 00:16:55,560 Speaker 1: The economy is joining the as Genie Chanze no Bloomberg 262 00:16:55,600 --> 00:16:58,880 Speaker 1: Politics contributor and a professor and I own a college. 263 00:16:59,520 --> 00:17:04,240 Speaker 1: How did the Democrats place their bets on the election 264 00:17:04,359 --> 00:17:08,480 Speaker 1: being a referendum on abortion rights? Did they place too 265 00:17:08,480 --> 00:17:11,800 Speaker 1: many bets on that? They did? Um? If you look 266 00:17:11,960 --> 00:17:15,320 Speaker 1: just at say the number of ads Democrats were running 267 00:17:15,320 --> 00:17:18,960 Speaker 1: throughout this summer into the early fall on abortion. They 268 00:17:19,000 --> 00:17:21,320 Speaker 1: put you know, all of their eggs or many of 269 00:17:21,320 --> 00:17:24,399 Speaker 1: their eggs in that basket. And the reality is, it 270 00:17:25,320 --> 00:17:28,120 Speaker 1: is an issue that's important, it's an issue that's important 271 00:17:28,119 --> 00:17:30,760 Speaker 1: to get out their face. It's an issue that will 272 00:17:30,840 --> 00:17:34,399 Speaker 1: help them save off what could be a really, really 273 00:17:34,440 --> 00:17:37,640 Speaker 1: tough election season for them. But it was never going 274 00:17:37,720 --> 00:17:40,800 Speaker 1: to be enough to turn this over in their favor. 275 00:17:41,280 --> 00:17:44,359 Speaker 1: And that's where I think they miscalculated. And you know, 276 00:17:44,400 --> 00:17:47,000 Speaker 1: we'll have to wait and see what happens, but that's 277 00:17:47,160 --> 00:17:50,080 Speaker 1: where I believe we may see next week that they 278 00:17:50,160 --> 00:17:53,920 Speaker 1: miscalculated on this. Does it appeal to the base? Will 279 00:17:53,920 --> 00:17:57,119 Speaker 1: it get the base out? It will absolutely get the 280 00:17:57,119 --> 00:17:59,800 Speaker 1: base out. And and this I think is really important 281 00:18:00,359 --> 00:18:03,719 Speaker 1: when you look overall, they should not just put all 282 00:18:03,760 --> 00:18:06,040 Speaker 1: their eggs in the abortion basket. But if you look 283 00:18:06,040 --> 00:18:09,040 Speaker 1: at individual states, say like a place like Michigan or 284 00:18:09,080 --> 00:18:13,879 Speaker 1: Wisconsin or Pennsylvania, and you look at some aspects of 285 00:18:13,920 --> 00:18:18,120 Speaker 1: their base, in particularly young women eighteen to twenty four 286 00:18:18,200 --> 00:18:21,720 Speaker 1: year old or eighteen to even twenty nine or thirty five, 287 00:18:22,600 --> 00:18:25,800 Speaker 1: if it helps to get that base out in those 288 00:18:25,840 --> 00:18:30,120 Speaker 1: states and amongst those constituencies, it will be incredibly important. 289 00:18:30,119 --> 00:18:32,480 Speaker 1: And you add on to that, if this election is 290 00:18:32,480 --> 00:18:35,040 Speaker 1: in many place places as close as we think it's 291 00:18:35,040 --> 00:18:39,000 Speaker 1: going to be, every single vote matters. So you know, 292 00:18:39,040 --> 00:18:42,520 Speaker 1: the reality is it's something they definitely have to push on. 293 00:18:43,200 --> 00:18:46,280 Speaker 1: But the other reality is is that by and large 294 00:18:46,359 --> 00:18:50,399 Speaker 1: the voters um agree with Democrats on this issue. So 295 00:18:50,520 --> 00:18:53,880 Speaker 1: they need to buttress their push on abortion with their 296 00:18:53,920 --> 00:18:58,560 Speaker 1: push on the cost of living, inflation and economic issues, 297 00:18:58,600 --> 00:19:03,400 Speaker 1: which are overwhelmingly the most important issue in every voter's mind. 298 00:19:04,440 --> 00:19:09,480 Speaker 1: And how have Democrats been handling those issues Because no 299 00:19:09,480 --> 00:19:13,240 Speaker 1: matter what the cause of inflation is and the economy, 300 00:19:13,400 --> 00:19:16,560 Speaker 1: the party in charge gets blamed for it. They do 301 00:19:16,640 --> 00:19:18,840 Speaker 1: get blamed for it. Um And you know, I think 302 00:19:19,040 --> 00:19:22,199 Speaker 1: one thing um putting my critics had on for a 303 00:19:22,240 --> 00:19:27,080 Speaker 1: minute is that Democrats have not had a concerted strategy 304 00:19:27,240 --> 00:19:30,399 Speaker 1: from the cop to address these issues. And just as 305 00:19:30,400 --> 00:19:33,600 Speaker 1: an example, you know, throughout much of the summer, even 306 00:19:33,600 --> 00:19:36,199 Speaker 1: into the early fall, for a certain to a certain extent, 307 00:19:36,600 --> 00:19:40,359 Speaker 1: the Biden administration was trying to you know, at first, 308 00:19:40,400 --> 00:19:43,719 Speaker 1: it was trying to say that inflation would be transitory. 309 00:19:43,880 --> 00:19:46,960 Speaker 1: Next it sort of morphed into the economy is better 310 00:19:47,040 --> 00:19:49,919 Speaker 1: than you think. Just look at the job numbers. You know, 311 00:19:50,160 --> 00:19:53,439 Speaker 1: inflation wasn't transitory as it turned out, and the job numbers, 312 00:19:53,440 --> 00:19:56,000 Speaker 1: they're right, are good. But any time you're in a 313 00:19:56,080 --> 00:19:59,760 Speaker 1: campaign and your message to voters is you're wrong about 314 00:19:59,760 --> 00:20:03,040 Speaker 1: how you feel, that's a losing message. And all of 315 00:20:03,080 --> 00:20:06,080 Speaker 1: the voters and the people responding to polls, we're telling 316 00:20:06,119 --> 00:20:09,640 Speaker 1: posters telling us that they are deeply worried about their 317 00:20:09,640 --> 00:20:13,240 Speaker 1: economic situation, the cost of living is getting worse and worse, 318 00:20:13,400 --> 00:20:16,480 Speaker 1: or concerned about inflation. So when from the top the 319 00:20:16,560 --> 00:20:20,400 Speaker 1: message is either this isn't happening or morphing into it's 320 00:20:20,440 --> 00:20:24,000 Speaker 1: better than you think, that's a problem for Democrats and 321 00:20:24,080 --> 00:20:27,400 Speaker 1: so of late they have tried to adjust that. Um 322 00:20:27,480 --> 00:20:30,520 Speaker 1: I noticed just as an example in the Georgia debate 323 00:20:30,600 --> 00:20:34,760 Speaker 1: between Warnock and Walker, I thought Warnock did a good 324 00:20:34,840 --> 00:20:38,679 Speaker 1: job of despending what Democrats have done, and this is 325 00:20:38,720 --> 00:20:41,480 Speaker 1: what they have to do. They have to say, Number one, 326 00:20:41,800 --> 00:20:43,760 Speaker 1: this is what we've done. For example, on the cost 327 00:20:43,800 --> 00:20:47,280 Speaker 1: of pharmaceuticals. We've passed the bill that's bringing those downs. 328 00:20:47,880 --> 00:20:50,720 Speaker 1: Would you have voted against that? Mr? Walker? That's basically 329 00:20:50,720 --> 00:20:53,320 Speaker 1: what he said, Um, so they have to defend what 330 00:20:53,359 --> 00:20:55,520 Speaker 1: they've done, and then they also have to look at 331 00:20:55,600 --> 00:20:59,560 Speaker 1: in contrast with what Republicans plan to do. There's either 332 00:20:59,760 --> 00:21:03,560 Speaker 1: not they concerted plans in that arena, or there are 333 00:21:03,640 --> 00:21:07,720 Speaker 1: really dangerous signs like you hear about Rick stat for instance, 334 00:21:07,800 --> 00:21:12,840 Speaker 1: talking about sun setting out Social Security, Medicare, Medicaid. You 335 00:21:13,560 --> 00:21:16,080 Speaker 1: can talk about those things that Democrats have tried but 336 00:21:16,160 --> 00:21:18,679 Speaker 1: not been able to make the case. Also, as the 337 00:21:18,680 --> 00:21:21,119 Speaker 1: President has tried to late to talk about issues like 338 00:21:21,320 --> 00:21:26,800 Speaker 1: corporate greeds. The numbers my Republican friends that we talked 339 00:21:26,800 --> 00:21:30,400 Speaker 1: to when you look at the mount oil companies alone 340 00:21:30,800 --> 00:21:33,960 Speaker 1: made in this third quarter as we are facing gas 341 00:21:33,960 --> 00:21:38,760 Speaker 1: prices rising, these examples of corporate greed really resonate with people. 342 00:21:39,160 --> 00:21:41,480 Speaker 1: So all of which is to say, and it's probably 343 00:21:41,560 --> 00:21:44,119 Speaker 1: far too long that there were an answer to this, 344 00:21:44,280 --> 00:21:47,280 Speaker 1: but I think the Democrats couldn't get in front of 345 00:21:47,320 --> 00:21:52,320 Speaker 1: that economic message, which in combination with abortion, and I 346 00:21:52,320 --> 00:21:54,640 Speaker 1: would add a third rail which is really important, which 347 00:21:54,720 --> 00:21:57,800 Speaker 1: is crime. They really could have, you know, I don't know, 348 00:21:57,880 --> 00:22:01,159 Speaker 1: stave off historic losses, but they could have, you know, 349 00:22:01,320 --> 00:22:04,359 Speaker 1: may be helped change the trajectory to a bit and 350 00:22:04,359 --> 00:22:07,200 Speaker 1: maybe saved the Senate. They still might, we don't know yet, 351 00:22:07,600 --> 00:22:11,280 Speaker 1: but it's harder without those economic messages that resonate with voters, 352 00:22:11,280 --> 00:22:14,160 Speaker 1: and they haven't been able to do that yet. What 353 00:22:14,200 --> 00:22:17,840 Speaker 1: I'm always surprised at, especially considering what the Supreme Court 354 00:22:17,920 --> 00:22:22,000 Speaker 1: did last term at the end of last term and 355 00:22:22,400 --> 00:22:25,440 Speaker 1: the cases in front of it this term. Why with 356 00:22:25,560 --> 00:22:30,119 Speaker 1: senators the Supreme Court isn't an issue since they're the 357 00:22:30,160 --> 00:22:35,960 Speaker 1: ones that are going to be voting on judicial nominations. Yeah, 358 00:22:36,200 --> 00:22:40,679 Speaker 1: it's fascinating because, as you know, Republicans have done that 359 00:22:41,320 --> 00:22:44,400 Speaker 1: very well for you know, since the passage of Row. 360 00:22:44,560 --> 00:22:50,240 Speaker 1: They have you know, really built up a large constituency 361 00:22:50,240 --> 00:22:54,640 Speaker 1: of conservatives who have kept abortion as a very important 362 00:22:54,640 --> 00:22:57,920 Speaker 1: issue in their minds and voted that way at important 363 00:22:58,000 --> 00:23:01,280 Speaker 1: most importantly the presidential level and to a certain extent 364 00:23:01,400 --> 00:23:06,800 Speaker 1: for Senate. And you know, Democrats, I think maybe we're 365 00:23:06,920 --> 00:23:11,000 Speaker 1: stunned by the Dobbs decision to a certain extent and 366 00:23:11,080 --> 00:23:14,639 Speaker 1: haven't had the time that Republicans obviously this was you know, 367 00:23:14,840 --> 00:23:18,320 Speaker 1: fifty years um, they had to build up this case. 368 00:23:18,400 --> 00:23:21,160 Speaker 1: So maybe in you know, a couple of years, five 369 00:23:21,320 --> 00:23:23,720 Speaker 1: ten years, we will see that argument being made in 370 00:23:23,760 --> 00:23:27,080 Speaker 1: a more concerted effort, in a concerned way, rather on 371 00:23:27,119 --> 00:23:30,040 Speaker 1: the Democratic side. Given it's only been you know, a 372 00:23:30,080 --> 00:23:33,200 Speaker 1: few months, um, maybe they haven't had the time to 373 00:23:33,200 --> 00:23:36,520 Speaker 1: to make that case. UM. And I think the fact 374 00:23:36,560 --> 00:23:41,080 Speaker 1: that they didn't see dobb coming is you know, part 375 00:23:41,080 --> 00:23:43,080 Speaker 1: of the problem on the left, and they have to 376 00:23:43,119 --> 00:23:46,600 Speaker 1: contend with that. But Democrats have never been good on 377 00:23:46,880 --> 00:23:50,879 Speaker 1: making abortion a key issue, um, at least to this point. 378 00:23:50,880 --> 00:23:54,560 Speaker 1: And again this could change going forward, So I would 379 00:23:55,000 --> 00:23:57,359 Speaker 1: you know, look for that. I think if we see 380 00:23:57,840 --> 00:24:01,960 Speaker 1: a real connection between voting and the issue of abortion 381 00:24:02,160 --> 00:24:06,560 Speaker 1: in the terms, we may see some at the Senate level, 382 00:24:06,640 --> 00:24:08,639 Speaker 1: like in the case of Walker and Warnock, are in 383 00:24:08,640 --> 00:24:11,919 Speaker 1: the case of in Pennsylvania Ods and Setterment. You know, 384 00:24:12,000 --> 00:24:15,639 Speaker 1: I do think it's resonating in certain Senate races for 385 00:24:15,760 --> 00:24:18,880 Speaker 1: the reasons you mentioned. I also think we will see 386 00:24:18,880 --> 00:24:21,200 Speaker 1: it at the guber nottorial level as well. So there's 387 00:24:21,240 --> 00:24:24,880 Speaker 1: several governors races are up, and because Dobbs has, as 388 00:24:24,960 --> 00:24:27,680 Speaker 1: you know, turned this over to the states, I think 389 00:24:27,760 --> 00:24:30,040 Speaker 1: we may see an impact there. So I'm thinking of 390 00:24:30,119 --> 00:24:35,280 Speaker 1: cases like Michigan, UM, the gubernatorial race out there. UM, 391 00:24:35,359 --> 00:24:39,560 Speaker 1: you know, a place like Pennsylvania, certainly with Shapiro Um, 392 00:24:39,720 --> 00:24:42,720 Speaker 1: where abortion has really been on the ballot in those 393 00:24:42,760 --> 00:24:46,239 Speaker 1: gubernatorial races because people really do get the connection that 394 00:24:46,320 --> 00:24:50,400 Speaker 1: now governors and certainly state legislatures will be making these 395 00:24:50,440 --> 00:24:53,040 Speaker 1: decisions until on unless we see action at the federal 396 00:24:53,119 --> 00:24:56,040 Speaker 1: level on this. So, you know, I think we have 397 00:24:56,080 --> 00:24:58,680 Speaker 1: to wait and see what Democrats do in terms of 398 00:24:58,920 --> 00:25:01,639 Speaker 1: building a constituent see on this issue at the federal level. 399 00:25:02,320 --> 00:25:04,080 Speaker 1: But at this point, I think we're going to see 400 00:25:04,080 --> 00:25:06,240 Speaker 1: that maybe turn up a little bit in some of 401 00:25:06,240 --> 00:25:09,359 Speaker 1: the polls at the state level. In this election cycle. 402 00:25:10,600 --> 00:25:15,320 Speaker 1: New York's Governor Kathy Hokel did press abortion. It seemed 403 00:25:15,320 --> 00:25:18,760 Speaker 1: to me in most of her ads up until recently, 404 00:25:19,000 --> 00:25:22,640 Speaker 1: abortion was the issue that didn't seem to work out 405 00:25:22,720 --> 00:25:26,600 Speaker 1: too well for her because the Republican challenger, Lee Zelden 406 00:25:27,160 --> 00:25:30,640 Speaker 1: is very close and could win. First time we've seen 407 00:25:30,640 --> 00:25:32,679 Speaker 1: a Republican governor in New York and I don't know 408 00:25:32,720 --> 00:25:39,040 Speaker 1: how long, yes, since to Taki June from the past, 409 00:25:39,320 --> 00:25:42,639 Speaker 1: that's right, Yes, been a while. Um, you know, I 410 00:25:42,640 --> 00:25:44,600 Speaker 1: would say, you know, most of the young people today 411 00:25:44,640 --> 00:25:46,520 Speaker 1: that may be voting for the first time, they have 412 00:25:46,640 --> 00:25:49,280 Speaker 1: never lived in New York with a Republican governor. To 413 00:25:49,320 --> 00:25:52,160 Speaker 1: your point, so it's been a long time. One thing 414 00:25:52,200 --> 00:25:53,960 Speaker 1: I think that happened, and this I think is a 415 00:25:53,960 --> 00:25:57,399 Speaker 1: great example m a state like Michigan or a state 416 00:25:57,440 --> 00:26:02,040 Speaker 1: like Pennsylvania. Because these and to the blue purpleish state, 417 00:26:02,480 --> 00:26:07,160 Speaker 1: you may see, you know, a change in the protections 418 00:26:07,160 --> 00:26:09,600 Speaker 1: of abortion at the state level a blue or state 419 00:26:09,680 --> 00:26:13,840 Speaker 1: like New York, and particularly since we uh we we've 420 00:26:13,920 --> 00:26:18,359 Speaker 1: codified it um not that long ago, it's unlikely that 421 00:26:18,480 --> 00:26:21,040 Speaker 1: you're going to see a change at the state level 422 00:26:21,119 --> 00:26:23,880 Speaker 1: in protection for the right to choose. And I think 423 00:26:23,960 --> 00:26:26,959 Speaker 1: that explains in part what happened, or what is happening 424 00:26:26,960 --> 00:26:30,399 Speaker 1: in the hopeful Belgian race, is that people in New 425 00:26:30,480 --> 00:26:33,280 Speaker 1: York don't fear the right of abortion is going to 426 00:26:33,320 --> 00:26:36,600 Speaker 1: be limited in this state anytime soon. Whether they're right 427 00:26:36,680 --> 00:26:39,960 Speaker 1: or wrong about that, most people feel given the passage 428 00:26:40,000 --> 00:26:43,760 Speaker 1: of the codification, and also because we have an overwhelmingly 429 00:26:43,960 --> 00:26:48,760 Speaker 1: democratic legislature. UM. But that's not likely. So I think 430 00:26:48,800 --> 00:26:52,240 Speaker 1: what happened was the issue is still important, but it 431 00:26:52,320 --> 00:26:55,600 Speaker 1: has been surpassed by another issue that it seems to 432 00:26:55,640 --> 00:26:57,280 Speaker 1: be on the minds of voters in New York and 433 00:26:57,560 --> 00:27:00,480 Speaker 1: that's one results talking about almost exclusive lee, which is 434 00:27:00,560 --> 00:27:04,520 Speaker 1: crime and then of course in all cases the economy. 435 00:27:04,600 --> 00:27:08,280 Speaker 1: So I think, you know, Hope pushing again putting most 436 00:27:08,320 --> 00:27:11,040 Speaker 1: of her eggs in the abortion basket early May, is 437 00:27:11,080 --> 00:27:14,239 Speaker 1: to a certain extent not address other issues voters are 438 00:27:14,240 --> 00:27:17,760 Speaker 1: thinking about, namely crime and the economy. She has started 439 00:27:17,760 --> 00:27:21,680 Speaker 1: to do that of late, particularly on crime, but it's, 440 00:27:21,720 --> 00:27:24,119 Speaker 1: you know again, I think a case in which people 441 00:27:24,240 --> 00:27:26,760 Speaker 1: feel like, what is the biggest thread out there for 442 00:27:26,840 --> 00:27:30,720 Speaker 1: New Yorkers if not losing the ability to access the 443 00:27:30,800 --> 00:27:34,520 Speaker 1: right to choose, but rather crime and the economy, and 444 00:27:34,560 --> 00:27:36,760 Speaker 1: that's what they want to see their candidates talking about. 445 00:27:37,000 --> 00:27:40,560 Speaker 1: And Democrats have got to wake up to that reality. 446 00:27:41,080 --> 00:27:44,840 Speaker 1: Thanks so much for your insights, Jennie. That's Jennie Chanzano, 447 00:27:44,960 --> 00:27:48,560 Speaker 1: Bloomberg Politics contributor. I'm June Grosso. When you're listening to 448 00:27:48,560 --> 00:27:49,119 Speaker 1: Bloomberg