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A Trial Put Publishing’s Inner Workings on Display. What Did We Learn?

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A Trial Put Publishing’s Inner Workings on Display. What Did We Learn?

Legal professionals for the Division of Justice and for the Penguin Random Home delivered their closing argument on Friday in a case that may decide whether or not the writer, the nation’s largest, should purchase one in every of its rivals, Simon & Schuster.

The case, which will probably be determined within the fall by Decide Florence Y. Pan, centered on the results of consolidation on publishing, an trade that has already been dramatically reshaped by mergers in recent times.

The federal government sued to cease the deal on antitrust grounds, saying it will diminish competitors among the many largest homes and push down advances for some authors. Bertelsmann, the mum or dad firm of Penguin Random Home, argued the deal would convey its provide chain and distribution muscle to an extended checklist of authors, to their profit, and that the trade is massive and diversified, made up of many vital gamers past the largest companies. Decide Pan expressed skepticism over a number of of Penguin Random Home’s predominant arguments.

Past the authorized debate, the three-week trial supplied an uncommon glimpse into the world of publishing, providing observers a parade of high-profile publishing executives, brokers and authors talking frankly and on the report about how books are made.

Right here is a few of what we realized.

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Nobody — not even the highest executives in publishing — has found out the combo of things that may assure a greatest vendor.

Markus Dohle, the top of Penguin Random Home, mentioned the whole lot within the e book enterprise is “random.” The choose described the trade as one in every of “risk-taking” and mentioned each e book was “a raffle.” The writer of a significant imprint referred to as the enterprise “fickle.”

The problem of predicting success was a constant theme in the course of the trial. It units the publishing world aside from many industries, which may use the previous gross sales of comparable merchandise — like a sort of washer or cereal — to foretell future gross sales. However each e book is exclusive, so whereas educated guesses will be made, particularly regarding established authors, no person actually is aware of what the long run holds for any given venture.

“All the pieces is random in publishing,” Mr. Dohle mentioned on the stand, recounting the corporate’s origin story. “That’s why we have now that title. So the founder thought: All the pieces is random. Success is random. Finest sellers are random. In order that’s why we’re the Random Home.”

How a lot a publishing home gives an creator for his or her e book is normally a intently guarded secret — a quantity primarily based roughly on gross sales expectations, competitors for a venture and really subjective parts like how badly editors need it.

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Throughout the trial, a number of of those funds, that are referred to as advances, have been mentioned with unusual candor.

Jennifer Bergstrom, the writer of the Simon & Schuster imprint Gallery, mentioned they paid “hundreds of thousands” extra for a e book by the comic Amy Schumer than the gross sales estimates would have dictated.

A couple of authors, just like the actor Jamie Foxx and Jiayang Fan, a author for The New Yorker, have been mentioned on the trial by title — each of them have been supplied seven figures. Different writers have been mentioned in code to protect confidentiality.

“Creator A is a actuality TV star,” Ms. Bergstrom mentioned. “She’s a housewife on Broadway — excuse me, Broadway? She needs. Bravo.”

She continued: “Creator B is the — was the star, he’s now in jail, of a significant Netflix present. We paid 175 for that.”

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Penguin Random Home executives testified that the approval of Madeline McIntosh, the chief govt of Penguin Random Home U.S., is required for advances of $1 million or increased, and Mr. Dohle’s for funds above $2 million. For advances of $75 million or extra, Mr. Dohle wants approval from executives at Bertelsmann — however he’s by no means had event to ask, he mentioned.

By most measures, publishing is flourishing. In any given yr, a whole bunch of publishers in america launch round 60,000 books. From 2012 to 2019, print e book gross sales grew by greater than 20 p.c, from 9 billion to 11 billion, Mr. Dohle testified. And e book gross sales have been sturdy in the course of the pandemic, rising by one other 20 p.c from 2019 to 2021, he mentioned.

However the trial highlighted a stunning reality: A minuscule share of books generate the overwhelming majority of income.

Throughout their testimony, Penguin Random Home executives mentioned that simply 35 p.c of books the corporate publishes are worthwhile. Among the many titles that become profitable, a really small sliver — simply 4 p.c — account for 60 p.c of these income.

“That’s how dangerous our enterprise is,” Mr. Dohle mentioned. “It’s the books that you just don’t pay so much for and change into runaway greatest sellers.”

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The trial supplied examples of books that publishers paid a comparatively small quantity for, and that turned out to be an incredible hit. Sally Kim, the writer of the Penguin Random Home imprint Putnam, mentioned they acquired “The place the Crawdads Sing” for “mid-six figures.” That e book has gone on to promote round 15 million copies worldwide.

The difficulty is industrywide, and has been exacerbated by the rise of on-line retail, which tends to strengthen the visibility of greatest sellers. In 2021, fewer than one p.c of the three.2 million titles that BookScan tracked offered greater than 5,000 copies.

The publishing trade has been remodeled by consolidation in recent times. Massive media conglomerates have devoured up smaller firms, giving them enormous catalogs and a aggressive benefit over small and midsize publishers, who’re sometimes shut out of auctions for blockbuster books by brand-name authors.

The repercussions of these modifications have been hotly debated in the course of the trial.

Justice Division’s argument emphasised the rising affect of the so-called Massive 5 publishing homes: Macmillan, HarperCollins, Penguin Random Home, Hachette and Simon & Schuster. In a pretrial transient, the Justice Division said that the Massive 5 make up 90 p.c of the marketplace for “anticipated top-selling books.”

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“They’re the one companies with the capital, reputations, editorial capability, advertising and marketing, publicity, gross sales, and distribution assets to repeatedly purchase anticipated top-selling books,” legal professionals for the Justice Division wrote.

Bertelsmann’s attorneys introduced a really totally different portrait, emphasizing that some midsize and unbiased publishers have been thriving and growing their market share. Throughout his testimony, Mr. Dohle famous that in 2021, roughly half of the books offered in america have been from publishers exterior of the Massive 5.

Penguin Random Home additionally made the case that lowering the variety of main publishers wouldn’t lead to authors shedding cash, as a result of the remaining homes will probably be pressured to compete much more aggressively for potential best-sellers and can supply larger advances to counter the mixed heft of Penguin Random Home and Simon & Schuster. In addition they claimed in a pretrial transient that financial savings ensuing from the merger will lead to more cash to spend on books, enabling the corporate to “supply increased advances” and “bid on extra books from extra authors.”

Decide Pan questioned these assertions. On Wednesday, she dominated {that a} important piece of Penguin Random Home’s argument — its proof that combining the 2 firms would result in price financial savings and efficiencies that will finally profit authors — was inadmissible as a result of it had not been independently verified.

In an prolonged backwards and forwards, Decide Pan additionally appeared skeptical of assertions by Penguin Random Home’s financial knowledgeable witness, Dr. Edward Snyder, a professor at Yale, that lowering the variety of main publishers wouldn’t lead to decrease advances. She mentioned the writer wouldn’t have to make an affirmative determination to decrease advances, however that it will occur anyway as a result of there can be much less competitors.

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“I don’t see that there’s going to be a lessening of competitors,” Mr. Snyder mentioned.

Decide Pan replied: “That’s the last word query.”

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New Mexico weighs whether to toss Alec Baldwin criminal charges in 'Rust' shooting

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New Mexico weighs whether to toss Alec Baldwin criminal charges in 'Rust' shooting

A New Mexico judge is weighing whether to dismiss involuntary manslaughter charges against Alec Baldwin for his alleged role in the 2021 shooting death of the “Rust” movie cinematographer.

Baldwin’s attorneys argued during a court hearing Friday that special prosecutor Kari T. Morrissey had abused her power by allegedly withholding “significant evidence,” including witnesses favorable to Baldwin, during a January grand jury proceeding.

The 66-year-old actor‘s lawyers said he was a victim of an “overzealous prosecutor” who steered grand jury proceedings in an effort to win an indictment in the high-profile case. At issue is whether the grand jury had been fully advised that they could hear from Baldwin’s witnesses during the proceedings. The grand jurors spent a day and a half questioning witnesses who were introduced by the prosecutors.

“The fix was in,” Baldwin attorney Alex Spiro told the judge Friday.

The grand jury indicted Baldwin on an involuntary manslaughter charge in the shooting death of Halyna Hutchins, the 42-year-old cinematographer, who was rehearsing a scene with Baldwin on Oct. 21, 2021. Baldwin has pleaded not guilty.

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At the conclusion of Friday’s hearing, New Mexico First Judicial District Judge Mary Marlowe Sommer said she would issue her ruling next week. Should she dismiss the case, it would mark the second time that the felony charges against Baldwin were dropped.

Marlowe Sommer’s decision is expected less than two months before Baldwin is scheduled to go on trial in a Santa Fe courtroom.

During the hearing, which was conducted virtually, Morrissey denied that she had acted in bad faith. She said she didn’t prevent jurors from getting answers to their questions or from seeking additional information. She told the judge that grand jurors had been given written instructions that outlined their ability to quiz other witnesses, including those favorable to the defense.

But because the jurors didn’t ask to hear from the witnesses who were on a list supplied by Baldwin’s lawyers, several key figures in the tragedy, including film director Joel Souza, property master Sarah Zachry and assistant director David Halls, were not called to testify. Instead, jurors heard from police officers, a crew member who was in the church and expert witnesses hired by prosecutors.

On the day of the shooting, Hutchins, Baldwin, Souza and about a dozen other crew members were gathered in an old wooden church at Bonanza Creek Ranch, south of Santa Fe, preparing for a scene. Hutchins, according to the actor, told him to pull his Colt .45 revolver from his holster and point it at the camera for an extreme close-up view. That’s when the gun went off.

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Hutchins died from her wounds. Souza was injured and recovered.

Last month, Marlowe Sommer sentenced the film’s armorer, Hannah Gutierrez, to 18 months in a New Mexico women’s prison for her role in the shooting. Morrissey argued that Gutierrez was criminally negligent by allegedly bringing the live ammunition to the movie production and unwittingly loading one of the lead bullets into Baldwin’s gun. Gutierrez denies bringing the ammunition on set.

Baldwin’s prosecution has long been fraught.

Morrissey and her law partner Jason J. Lewis joined the case last year after the first team of prosecutors was forced to step down due to missteps, including trying to charge Baldwin on a penalty enhancement that wasn’t in effect at the time of the tragedy.

“The government looked a little sophomoric and unprofessional when they charged him for a crime that wasn’t a crime at the time,” said Los Angeles litigator Tre Lovell, who is not involved in the “Rust” shooting matter. “That was embarrassing.”

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The original prosecutors also displayed bluster in media interviews, making statements about the need to hold Baldwin responsible for his actions. Defense attorneys have argued that such commentary was out of line and prejudicial against the actor.

Shortly after Morrissey and Lewis joined the case, they dropped the charges against Baldwin. At the time, they said they needed more time to review evidence and address issues raised by Baldwin’s team. Morrissey and Lewis reserved the right to refile the charges.

Immediately after the charges were dropped, Baldwin traveled to Montana to finish the filming of “Rust.”

On Friday, Morrissey said last year’s decision to drop the charges was made at the request of Baldwin’s lead attorney, Luke Nikas, who had presented evidence that the gun Baldwin was using had been modified. Subsequent tests showed the gun was functional that day, but during FBI testing in 2022, the gun was broken by forensic analysts who wanted to see how much pressure needed to be applied for the hammer to drop.

The damaged gun is one of several complications that prosecutors are facing. Legal experts have said that winning a conviction in Baldwin’s case is expected to be more difficult than in the trial of Gutierrez, whose job was to make sure the weapons were safe.

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Baldwin was handed the prop gun that day and was told that it was “cold,” meaning there was no ammunition inside. In reality, the chamber of the revolver contained six rounds — five so-called dummies and the lead bullet that killed Hutchins.

“The state has not even alleged that Baldwin had a subjective awareness of a substantial risk that the firearm held live ammunition,” Nikas argued in the motion to dismiss the charges. “Without a subjective awareness, he could not have committed the crime of involuntary manslaughter, which requires that the defendant consciously disregarded a substantial and unjustifiable risk that his actions could cause another person’s death.”

Baldwin has argued, with support from Hollywood’s performers’ union SAG-AFTRA, that it wasn’t his job to be the gun safety officer on set.

The actor has said he was relying on other professionals to do their jobs to ensure a safe production.

Prosecutors have an obligation to present evidence in a “fair and impartial manner,” Baldwin’s attorneys said.

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The judge grilled Morrissey on her thinking at the time, including an instance when she had interrupted a sheriff’s deputy and prevented her from answering a question about gun safety measures on set. Morrissey said that deputy was not an expert in film set protocols and that she instead wanted jurors to get “the most accurate information,” which would come from a veteran film crew member who was an expert witness.

Baldwin’s attorneys were also sharply critical of Morrissey for divulging during a media interview the date the grand jury was expected to meet. Morrissey said she took responsibility for providing to a reporter the initial date, which had been scheduled for mid-November. However, the matter was postponed, and the case wasn’t brought before the grand jury until two months later, in mid-January.

Lovell, the L.A. entertainment attorney, said he believes the case will go to trial and that efforts to throw out the indictment will be unsuccessful.

“Courts are really reluctant to dismiss cases brought by a grand jury,” Lovell said. “Courts have limited ability to review what goes to a grand jury unless it was provided in bad faith.”

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Troubled EV maker Fisker closing Manhattan Beach headquarters

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Troubled EV maker Fisker closing Manhattan Beach headquarters

In an effort to stave off bankruptcy, electric-vehicle maker Fisker Inc. is closing its Manhattan Beach headquarters and has secured a $3.5-million lifeline as it continues to explore an acquisition or other strategic alternative.

The troubled company, which had about 300 employees in the 72,000-square-foot offices at the end of March, is moving its remaining workers to an engineering and distribution facility in La Palma in Orange County, said a person familiar with Fisker’s operations who was not authorized to comment.

In all, the company had roughly 1,135 employees as of mid-April, following an announced 15% cut to its workforce.

Fisker has been attempting to avoid bankruptcy since March, when it announced that talks over a strategic alliance with a major automaker had ended, squelching a deal that would have given it $150 million in new financing.

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That caused its shares to collapse to pennies, prompting the New York Stock Exchange to delist the stock, which violated another debt agreement the company struck with an investor last year, according to a regulatory filing.

A major automaker, said to be Nissan, was reportedly in talks to invest in Fisker. Nissan was considering making the Fisker Alaska truck at a U.S. plant — a deal that would come with a $400-million investment, Reuters first reported. Fisker did not confirm the reports.

Fisker announced this week that it secured a $3.5 million short-term loan, as it continues to operate and sell its midsize Ocean SUV. The note is due June 24 and has the potential to increase to $7.5 million.

The Ocean, a competitor to Tesla’s Model Y, was released last year to mixed reviews; some praised its build and styling, but the car has been plagued by software glitches.

The National Highway Traffic Safety Administration has four investigations into the vehicle, including one opened this month after complaints that the SUV’s automatic emergency braking system randomly triggered.

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Other probes are looking into reports that a door on the Ocean will not open and complaints about a loss of braking performance. The company has said it is working with the regulator.

Fisker said this week that it had added three dealers to its networks in California and New Jersey, which it began building after a plan to sell direct to consumers — like Tesla does — didn’t pan out. It also announced additional price cuts on some Ocean models.

In March, Fisker slashed the price on its entire lineup of 2023 Oceans by more than 30%. The company also said that it had paused production at its contract manufacturing plant in Austria, which produced about 10,200 Oceans last year.

Fisker was founded in 2016 by noted car designer Henrik Fisker, who has said the Ocean was inspired by California. The SUV features a full-length solar roof, an interior composed of “vegan” recycled plastic and a drop-down rear window that can fit a surf board.

Fisker is not the only startup that has been struggling amid a slowdown in the domestic market for electric vehicles and a rise in interest rates.

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Rivian Automotive, an Irvine maker of electric trucks, has informed state officials it will lay off more than 120 employees beginning in June. In February, the company announced it was cutting 10% of its workforce. The company’s shares have lost more than half of their value since last year.

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Las Vegas' Mirage Resort to close after 34-year run. Volcano to go dormant

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Las Vegas' Mirage Resort to close after 34-year run. Volcano to go dormant

Once hailed as “Las Vegas’ first 21 Century resort,” The Mirage Hotel & Casino confirmed Wednesday that its iconic volcano outside of its front entrance is going dormant less than a quarter of a century into the new millennium.

Owner Hard Rock International announced the hotel will cease operations on July 17, with bookings being accepted until July 14. The iconic resort — sporting a jungle-fantasy theme —was perhaps best known for its exploding 54-foot man-made volcano, magicians Siegfried and Roy, and its white tigers and dolphins.

“We’d like to thank the Las Vegas community and team members for warmly welcoming Hard Rock after enjoying 34 years at The Mirage,” said Jim Allen, Chairman of Hard Rock International in a statement.

The resort is expected to be redeveloped into the Hard Rock Hotel & Casino and Guitar Hotel Las Vegas, with the volcano giving way to a nearly 700-foot guitar-shaped hotel. The project is expected to open in spring 2027. A similar 638-room hotel stands in Hollywood, Fla.

The Associated Press reported that more than 3,000 employees will be laid off. Hard Rock acknowledged it would pay roughly $80 million in severance packages for union and nonunion labor.

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The Culinary and Bartenders Union accounts for about 1,700 Mirage workers. It announced Wednesday that its workers have two options.

The first was a severance package of $2,000 for every year of service plus six months of pension and health benefits. The second option gives employees a lesser, undisclosed amount while maintaining seniority rights for the duration of the property’s closure along with 36 months of recall rights for jobs at the new hotel.

“Culinary Union members at The Mirage have a strong union contract, ensuring that workers are protected, even as the property closes its doors entirely for three years from July 2024 – May 2027,” said Ted Pappageorge, Culinary Union secretary-treasurer, in a statement Wednesday.

The new hotel is projected to employ nearly 7,000 employees, according to Hard Rock management, while 2,500 construction jobs are expected during the rebuilding process.

Hard Rock said that all reservations beyond July 14 would be canceled and that guests should contact the guest services department or booking agency for a refund.

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The Mirage’s closure is the second on the strip this year.

In April, the 66-year-old Tropicana closed its doors to make way for a 30,000-seat stadium that is expected to serve as the home of the Oakland A’s.

The Mirage’s opening by casino tycoon Stephen A. Wynn in 1989 was hailed as the ushering of a new era of resorts. It was the first strip hotel to open since the MGM Grand in 1973.

Wynn shelled out $600 million, then the most expensive casino project, for the sprawling 103-acre property.

The Mirage was the first fully integrated hotel, according to Alan Feldman, a Distinguished Fellow at UNLV’s International Gaming Institute.

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Integration meant operating and treating all facets of the resort, including casino, food and beverage, retail, entertainment and convention space, with equal importance, according to Feldman, who rose to become an executive with the Mirage and stayed from 1989 to 2019.

Feldman said hotel owners previously cared first about the casino and “everything else was last.”

“They gave away entertainment, food and rooms as long as someone came and played,” said Feldman. “The Mirage was the first to believe you could actually make money in these areas if you invested enough.”

Its glistening 30-story white-and-gold towers were said to make neighboring Caesars Palace look “retiring by comparison.” Traffic occasionally backed up on the strip as engineers tested gas-flared flames 40 feet into the air every few minutes.

“People just got out of the cars and went over to see what was going on,” one limousine driver said at the time.

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The hotel included a 20,000-gallon fish tank at its reception desk and 3,049 rooms.

Its animals — and its white tiger habitat — brought the resort fame and infamy, including in 2003 when a tiger critically injured magician Roy Horn.

The Mirage’s opening kicked off a resort building and remodeling spree that included the debut of the Circus Circus’ Excalibur in June 1990, the $250-million renovation of Caesars Palace and the opening of Treasure Island in 1994.

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