THE DICTIONARY DEFINES hubris as excessive self-confidence, and that would pretty much define my reasons for thinking that a deal with the gigantic German publisher Bertelsmann would be a good idea. When they first approached me in 1986, I imagined that their Canadian acquisition, Doubleday, would partner with Key Porter, that it would warehouse, ship, and sell our books at a fraction of what it cost us to do all that ourselves. Plus, given Doubleday’s heft in the marketplace, we would be offered better deals for advertising, more bookstore shelves, more reviews . . . In hindsight, of course, that was not only hubris, it was downright silly.
This is how events unfolded. In its effort to put more of the Canadian book market into Canadian hands—at the time, about seventy per cent of that industry was foreign-owned—the federal government, through our suave minister of communications, Marcel Masse, had come up with a new national policy. The “Baie Comeau” policy, as it was called, declared that it was “essential that there be a strong book publishing and distribution industry owned and controlled by Canadians.” Hence, every time one multinational publisher bought another one that had a Canadian subsidiary, the publisher had to offer controlling interest in the subsidiary to Canadians. The policy was based on the reasonable assumption that it is good for Canada to have its own publishing industry.
After Bertelsmann, a US$2.4 billion German media conglomerate, bought the prestigious American company Doubleday, which had a Canadian subsidiary, I had a call from Alun Davies, the irrepressible, gossip-loving Welshman who now ran the entity known as Bantam Doubleday Dell International. Would I be interested in becoming Doubleday’s Canadian partner? I was both flattered and intrigued.
Bantam Doubleday Dell’s chief honcho, Alberto Vitale, who could have given Marcel Masse lessons in suave, came to our home with Alun Davies. I had met Alberto at Frankfurt and London book fairs and American Booksellers’ Association (now BEA) events. He was short, Italian, with a big smile and small twinkly eyes behind black-framed glasses. He was considered smart but an outsider by most of New York’s publishing princes, but I had always enjoyed his company. He had been a financial wizard at Olivetti, then at the Agnelli family holding company, before he came to America. He was convinced that publishing was tough and that no amount of talent could win in this business without strong financial backing. You had to keep the wolves from the door or your company would vanish. The 1980s were the time of mergers and takeovers in the publishing business. The weak would be swallowed up by the strong. Old-world companies would become imprints in larger companies. Bertelsmann had the kind of money Alberto needed to succeed.
When our negotiations on how I would borrow most of the money to buy fifty-one per cent of Doubleday Canada and what would happen to Key Porter Books began to stall, Alberto suggested a short break and a walk outside.
It was winter. Our path was covered by heavy, wet snow. Alberto grabbed a shovel and cleared the way in about five minutes. He was practically dancing with the shovel, skipping along in his tasselled loafers, looking like a kid with a new toy. When he returned, he was flushed, wiping the condensation from his glasses. “Well?” he asked.
He assured me that we would work out the details of their role with sales and distribution of Key Porter books, and I agreed to the deal, including borrowing most of the money from Bertelsmann itself. Somehow I imagined that I could manage both companies and even finish the novel I had been writing.
The next couple of years turned out to be chaotic. I ran between the two offices, trying to remember what had been left unresolved and where.
Doubleday’s offices and warehouse were in an old brick building on Bond Street in downtown Toronto. There was one floor for book clubs and one for publishing. The warehouse was on the lowest floor, with shelves for outgoing packages and a giant machine they called Jaws whose function was to chew up every returned book, even those in pristine condition. Simpler and more economical this way, Alberto had explained when I protested that many of the destroyed books had been reordered by bookstores.
My intrepid assistant Gloria Goodman remembers how each of us clutched huge white canvas bags full of paper and manuscripts and drove up to Bond Street from The Esplanade for two and a half days each week, unpacked, made calls, handed out memos, attended meetings, emptied our in-baskets into the same canvas bags, and headed back to Key Porter. The joke going around Key Porter was that no publishing decisions were made by us before midnight.
On the plus side, I managed to persuade Bertelsmann that we needed more Canadian selections in their seven book clubs, especially the Literary Guild, the Doubleday Book Club, the Mystery Guild, and the History Book Club. I hired Susan Renouf to be editorial director of the book clubs, and we bought Canadian books to supplement or replace some of the American selections. We made Canadian titles main selections (that would mean around 15,000 additional sales for the authors); we bundled packages of three or more Canadian classics into a selection; and we took chances on new writers. It was not only good for Canada, it was profitable business and, Susan Renouf believes, could have grown into an alternative to Amazon, had Bertelsmann not been so wedded to what it had been doing for so many years. As it is, those book clubs have all vanished in Canada and the United States.
I hired John Pearce,I who had been editor-in-chief at the now defunct Clarke Irwin, to be editor-in-chief of Doubleday Canada. He managed a growing list of some fine books, including Sylvia Fraser’s My Father’s House; Doris Anderson’s The Unfinished Revolution, which Doris described as “a labour of love”; Lawrence Martin’s Breaking with History; along with books by Joy Fielding, Charlotte Vale Allen, and Paul Quarrington.
At the Frankfurt Book Fair, John and I bought the Canadian rights to publish several books by one of my beloved mystery writers, Ruth Rendell. I still remember the excitement around the Hessischer Hof bar the night we concluded the deal.
During the preceding decades, UK and US publishers both considered Canada to be part of their territory. They sometimes fought over who would “have” Canada, but we were never a deal-breaker. Very few of us were able to persuade literary agents in other countries that Canada was, in fact, a country and that their authors would benefit from being published rather than just distributed here. Louise Dennys of Lester & Orpen Dennys was another Canadian publisher battling for the right to license Canadian rights. With her literary taste, tenacity, and lovely British accent, she had managed to hive off rights for such luminaries as Italo Calvino, Ian McEwan, and P. D. James.
At the time of the Rendell purchase, Century Hutchinson’s Anthony Cheetham had held her Canadian rights. He expected to see the arrangement continue, though Ruth was receiving a fraction of the money she got when her agent sold Canada as a separate country. It was at least seven years before AnthonyII spoke to me again. I am still reading Ruth Rendell and have mourned her death with all her other fans.
I am not sure why Michael de Pencier agreed to my splitting my time between our venture and Doubleday, though I assume the notion of cooperating with a large multinational seemed tempting initially. But he was also preoccupied with growing Key—I was on his board then—and in 1987 he was distracted by a debilitating lawsuit.
The prominent Reichmann family sued Toronto Life magazine for $101 million (until then, the biggest amount ever asked for in a Canadian libel suit) over an article by Elaine Dewar entitled “The Mysterious Reichmanns: The Untold Story.” At the time, the Reichmanns’ Olympia and York was the largest real estate development company in the world. Julian was Toronto Life’s lawyer and, like me, a director of Key Publishers, Toronto Life’s owners.
The case stretched into two years with endless meetings, discoveries, and misery for Michael. I still can’t reveal the nature of the final settlement, except that it was painful for all of us.
* * *
DESPITE OUR FREQUENT commiserations, I was still surprised when Jack called in January 1987 to say that he wanted to sell us his fifty-one per cent of Seal Books. He argued that since he no longer ran M&S, it was pointless to have Seal. Plus, since Avie had assumed he would be offered Seal, Jack was eager to deny him the pleasure. I needed time to think. I was already busy with two companies, had two young daughters and a busy husband, and was a member of a number of corporate boards.
Julian and I went to Switzerland that winter at director Norman Jewison’s invitation (we had become friends while I was trying to persuade Norman to write a book). Our daughters skied with Norman’s much older children, Julian took on the mountain with Norman, and after a few disastrous attempts to ski, I walked along the paths skirting the ski hills, thinking about the future.
On the way home, I decided to give Seal another try. At the time I thought that if my relationship with Bertelsmann was going to work (sort of) for Doubleday, perhaps it would also work for Seal. The purchase of Seal was quick, since Jack wasn’t looking for much money and Alberto was, indeed, keen for Key Porter to acquire majority shares.
We moved Seal’s small office to the Doubleday building on Bond Street and I hired Dean Cooke to be publisher. Dean had worked at Doubleday before, and I assumed he would fit in easily. In a year or so, however, this formerly cheerful and charming man became strangely morose. He had difficulty navigating a path between Alun Davies and me. Both of us seemed to think we were in charge, and we frequently made contradictory decisions. Several times Alun cancelled contracts I had negotiated, and almost as often, I ignored his objections.
Any illusions I had retained that there would be an advantage to Key Porter from the affiliation with Doubleday vanished near the end of my first two years. Alberto explained that he saw no reason for Doubleday to take on Key Porter’s sales, and anyway, they were going to close the Canadian warehouse. It was much, much cheaper to ship everything from Chicago. I couldn’t argue with this premise for the US books on the list, and he couldn’t understand why Canadian books should be any different. But I found the notion of shipping Canadian books from a Canadian printer to a US warehouse to be shipped back to Canada unacceptable. For him, it was a simple matter of mathematics—as simple as his patient explanation proving that it was cheaper to destroy and reprint, if needed, than to select, store, and ship.
It was interesting to meet the Bertelsmann men. In particular, I remember the rather wizened Reinhard Mohn, a former lieutenant in Rommel’s Afrika Korps, whose family firm prospered printing propaganda for the Nazis but collapsed at the end of the war. By 1986 Mohn had rebuilt the company and grew it into a giant conglomerate. Peter Olson, Bertelsmann’s chief honcho in the United States, had an office in a separate building from the rest of the company. He managed to sound both conspiratorial and obsequious about Bertelsmann’s US ambitions. He spoke several languages, including German and Russian. The company already published more than two thousand new titles a year, and Peter was tasked with significantly increasing its twenty per cent market share. He was ruthless but not ruthless enough to achieve the numbers until after he had negotiated the purchase of Random House. I would love to have overheard his negotiations with Alberto Vitale. In a 2008 article, The New York Times billed Olson the enigmatic “godfather of Random House,” but later that year, his time as CEO of the merged companies was up.
Marcus Wilhelm, the fun-loving book club numbers man, had been sent to Canada for a test run before he was to go to the United States to guarantee Bertelsmann’s market dominance. At heart a young rebel, despite his family’s conservative connections, Marcus was delighted with the growth that the Canadian selections brought, and he loved the attention of Canadian publishers. But he had greater ambitions than whatever Bond Street could provide.
I had observed the preening “Bertelsmen”—they were all guys—in Paris, New York, London, and their headquarters in Gütersloh, but their best performance was always at the Frankfurt Book Fair. Dinners in their grand hotel suites and parades along the crowded aisles established their reputation, as did the colossal sums they were willing to pay for what they considered lead books or lead opportunities. I had the chance to file in with the rest of the international staff to the big annual, guarded Bertelsmann party, the party everyone who was anyone in the publishing world wanted to attend.
I. John was also the editor of my first two novels, Hidden Agenda and Mortal Sins, and he is now my agent.
II. Anthony Cheetham is another publishing legend. In addition to starting Century Hutchinson, he also founded Abacus, Orion, Macdonald Futura, Quercus, and most recently, Zeus—a great name for a publishing house, especially one run by Anthony.