I’ve always believed it’s imperative that a book publisher grow. Not everyone agrees. Some houses seem quite happy to hold at a certain size, putting out 10 or 30 or 5,0000 books a year, every year. That’s fine for them. But if I couldn’t see a path to publishing more and better books in the future, I think I’d pack it in. Growth is a big part of the sport for me.
But there’s growth, and then there’s Richard Johnson growth.
An accountant by training, Richard Johnson (top of page and below) was hired as CEO of Bonnier Publishing, the London-based, English-language division of the Bonnier family’s 200-year-old Swedish media multinational, somewhere around the end of the Great Recession. He quickly displayed a determination to grow the company.
In 2014, he made waves by announcing his intention to double his £52m annual revenue to £100m in two years flat. Most established publishers consider themselves lucky to string together a few years of 3-5% growth.
Johnson said he would make the great leap by investing in his core children’s line and branching out into adult fiction and non-fiction. He claimed to have a well-considered plan. “We have undertaken a fairly big research operation over the last few months to look around the UK market. We wouldn’t want to make this statement unless we thought we could back it up.”
What followed was a hiring spree during which Johnson recruited dozens of employers from rival publishers, a signing spree in which he inked the likes of Wilbur Smith and Robbie Williams to big-money deals, a start-up spree resulting in several new publishing lines, and an acquisitions spree bringing in more children’s publishing capacity, an adult fiction imprint, an erotic fiction imprint, and more.
The cost of this spree of sprees was high: £84 million. But Johnson reached his growth target. With the acquisition of the illustrated non-fiction publisher Weldon Owen in the last weeks of 2016, his annual revenue topped £100m. In two years flat. Champagne and press releases flowed.
Johnson boasted to The Bookseller: “We have started so many new things, even if I put my feet up for the next 18 months and did nothing else, the group would grow 15%–20% as the startups begin to really build through.”
And, “We’re not a traditional publisher, a stuffy publisher, for want of a better word. We love to have fun, we love to be a bit cheeky, a bit rebellious.… Commerciality underpins it; we are loyal to staff who want to be part of this game. We are fast-moving, we are an open culture where everybody has a voice, we are very decentralized and we are very entrepreneurial. We have openly gone out, where somebody [a rival publisher bidding for a book] has said, ‘We cannot publish that book for 12 months’, we’ve said, ‘We can publish that in three’. We have openly challenged the publishing big boys. That requires a different person working for Bonnier Publishing than Random House—they’ve got to have speed of thought and be willing to challenge.”
And, “In the early days it may appear to be chaotic, anarchic, the horse is bolting around the field—but it is organized chaos, most of the horse-bolting-around-the-field thing is in a good way. Our problems now are almost, how can we do everything we have set out to do? Rather than thinking, ‘Where is the next potential idea?’, our problem is we have too many ideas, and which idea do we drop?”
Asked about pictures of him dancing the conga at office parties, “I’m not your usual publishing boss at all. The parties are a bit crazy and I will dress up in whatever people want me to dress up in, and promote the book in a Richard Branson way.”
Asked what the Swedes think of him: “They are fully aware of our spirit, our joie de vivre, our slightly quirky approach to life. I think in the first days they found it amusing in a Monty Python way, in that the English are all a bit eccentric. They bought into that, and I think minute-for-minute the Bonnier Books leadership spends more time here than anywhere else, and that’s not just because we’re growing, it’s because they enjoy hanging out with us and being part of it.”
Johnson continued to talk growth and throw money around into 2018, never mind that his constant reshuffling of executives and reorganization of imprints suggested his firm was having trouble digesting its expansions and acquisitions.
Bonnier Publishing was the star performer in UK bookstores in the first half of 2018, its sales increasing 53%, year over year. But by then Johnson had been fired.
His revenues might have been skyrocketing, but so were expenses. Losses in Bonnier’s overall book division were a startling £19m in the first four months of 2018, thanks largely to the “strong negative effect” of the UK operations. A very Swedish-looking Swede named Zetterlund (below) was parachuted into London to clean up the mess. Writeoffs, unwindings, right-sizing followed.
Johnson didn’t leave quietly. Before 2018 was up, he’d published an ebook memoir entitled Show Me Your Medals: “For a period of time we were totally unstoppable in our determination to break our way onto the top table and sit there with our middle finger firmly pointed at the others."
The book was sold off a website, which has since disappeared. We have to rely on The Bookseller, the journal of record for all things Richard Johnson, for a description of the contents:
On Johnson’s telling, the idea it was a runaway train is farfetched: he delivered on his 10-year plan. Extraordinarily, we learn, [the Swedes] wanted the results faster. The pressure was intense. He tried to resign a year earlier than his departure, writing in his parting letter that he was "physically and mentally gone". Emotionally he is fraught, having missed his child’s birthday because of work. Nevertheless, he returns, and persists. He was, he argues, protecting his staff.
Johnson believes he was kicking against the "pricks" (the "pricks" being everyone else in publishing and occasionally his own staff); that in building the house of fun he was undermining the elites, pursuing "the ideal of publishing for everyone". He was, he writes, the "disruptor in chief of a whole industry." He was cruel, sure and sometimes wrong (belatedly apologising to two former executives), but the ends justified the means.
And what were the ends? To break into the top tier of UK publishing, having agreed to a target of £100m in sales. In the book, he writes: "There was absolutely no logic to the £100m other than it sounded like a good number." And Bonnier knew all about it, the Swedish group ignoring the very many letters and warnings about him. "Sweden didn’t care, they already knew what I was like."
Sweden now claims it didn’t know what Johnson was like, and that it didn’t know what he was doing.
Two weeks ago, it announced that it is suing its former accountants, Haysmacintyre, for an allegedly negligent audit of Johnson’s financial statements. It seems Haysmacintyre signed off on “materially overstated” accounts that were instrumental in convincing Bonnier to adopt Johnson’s strategy of rapid expansion, a strategy it now claims was “flawed, loss-making, and unsustainable.” Had the accountant done its job, says the suit, the Johnson show might never have launched.
Johnson is not a defendant in the suit (less chance of a media circus when you go after the accounting firm), but he’s certainly a player. While Bonnier’s major claims are that Haysmacintyre failed to follow accepted accounting principles and neglected to chase down inconsistencies between cash flows and stated profitability, it alleges that Johnson misappropriated at least £3.5m. This sum includes payments to himself beyond those owed to him under his contract in the form of consulting fees and bonus payments, £80,000 in vacation expenses, redundancy packages to family members, helicopter services, and a £60,000 staff summer party (that seems to be it at the top of the page, and below).
Haysmacintyre says Bonnier’s claim is "without merit" and "will be robustly defended."
Johnson says he knows nothing of any £3.5m, and that all the accounting practices originated in Sweden.
So where does that leave us? Johnson is an ass, obviously. But wtf were the Swedes thinking? A bunch of seasoned publishing executives rolled the dice on an unnecessarily risky mission to double the size of the company in record time by expanding in every direction at once. And they were surprised it didn’t work? It should have been recognized as a “flawed, loss-making, and unsustainable” proposal when first bruited in 2014.
I have no idea how far Bonnier will get with its lawsuit (if I had to guess, not very). But whatever the outcome, the company got what it deserved letting Johnson off-leash.