Prior to yesterday morning, it appeared that maybe Markus Dohle had secretly climbed out through his bathroom window at some point during the past six months and gone home to Germany. The dapper but mildly off-putting 40-year-old had been appointed CEO of Random House Inc. back in May, and since then, as far as anyone could tell, he had done pretty much nothing. Most of the men and women of 1745 Broadway--from the editors at venerable Knopf to the sales force at Doubleday--had the distinct impression that whenever Mr. Dohle wasn't making stops on his interminable "listening tour," he was holed up in his office punching numbers wildly into a calculator, with a red pen tucked behind his ear and piles of blueprints piled high on his desk. It was understood, in other words, that change was coming, but Mr. Dohle was not giving anybody any indication as to what it was he was planning.

It's true that trouble started coming down in a drizzle some time ago, when Mr. Dohle imported a young fellow from Bertelsmann's headquarters in Germany and installed him as the new head of Random House's human resources. And it's true the clouds got a little darker in October when 16 jobs were eliminated at Doubleday and Mr. Dohle announced that pensions for existing employees would be frozen and no longer offered to newcomers.

These were not signs of prosperity, to be sure, but they were not the radical measures Mr. Dohle was expected to enact either. The man appeared to be tinkering--making the company squirm when it should have by any reasonable expectation been convulsing.

Yesterday, Mr. Dohle finally kicked things off properly, seizing Random House by the throat and imposing upon it a reorganization that decisively addressed the costly inefficiencies he inherited from his predecessor, the puzzling former CEO Peter Olson. When Mr. Dohle was through, two of Random House's five adult trade divisions had been busted up and integrated into Crown, Knopf, and the flagship Little Random division, those areas of the company that had apparently been deemed during Mr. Dohle's extended evaluation functional enough to survive.

The divisions that were shut down, Bantam Dell and Doubleday, together add up to the entity once known colloquially as "BDD," which represented the full extent of Bertelsmann AG's presence in American trade publishing prior to their 1998 acquisition of Random House Inc. from the Newhouse family. That merger yielded a company controlled in large part by a tight-knit squad of men who had come up through BDD--namely Peter Olson, the former banker who had been with Bertelsmann since 1990; Stuart Applebaum, the silky but surly corporate spokesman said to be one of Mr. Olson's closest advisers; Steve Rubin, the one-time magazine writer who joined Bantam in 1984 and was made publisher of Doubleday six years later; and Irwyn Applebaum, brother of Stuart and the longtime head of Bantam Dell.

Together, Mr. Olson, Mr. Rubin, and the Applebaum Brothers ran Random House in a fashion that was described and eventually mythologized in widely read pieces of journalism like Lynn Herschberg's "Nothing Random" in The New York Times Magazine and Joe Hagan's "Those Royal Applebaums" in this paper. The group's ascendance went unchallenged until the deposition of Mr. Olson last spring, and did not end properly until yesterday morning, at which point Doubleday was cut up into scraps and fed to Sonny Mehta's Knopf and Jenny Frost's Crown, and Bantam Dell was effectively shuttered and folded into Gina Centrello's Little Random.

Following the restructuring, the only member of the BDD old guard left is Stuart Applebaum, the corporate spokesman said to have enjoyed such great influence at Random House during the reign of Peter Olson. It's unclear whether Mr. Applebaum and Mr. Dohle ever developed as close a bond, but the man's fate is considered by the publishing community to be so uncertain that his continued employment at the company was a point of interest for industry insiders in the aftermath of yesterday's earthquake.

 

 

IF YESTERDAY'S RESTRUCTURING made Random House a less cozy place for Mr. Applebaum, it definitely became a more cozy one for Ms. Centrello, the president and publisher of the Little Random group, whose position at the company was not only preserved amid the upheaval but made even more powerful as she was given control of both Bantam Dell and Spiegel & Grau.

The fact that Ms. Centrello is as much a BDD-er as anyone--it was her longtime mentor Irwyn Applebaum who groomed her for the job atop Little Random--coupled with the fact that Little Random under her leadership has largely failed to articulate a clear sensibility or mount major successes with any reliability made some high-level publishing people say yesterday that she was lucky to survive Mr. Dohle's broom.

"No one is surprised that [Crown president Jenny Frost] got more powerful. No one is surprised that [Knopf president Sonny Mehta] got more powerful," said one top agent yesterday. "But why did Gina survive and Steve fall? What did Little Random do to deserve survival? What did Gina do right that Steve did wrong?"

The agent wondered whether Markus Dohle would himself be able to articulate an answer if pressed to explain why the Doubleday division was worth giving up on. Was it that Da Vinci Code author Dan Brown had failed to come up with a second blockbuster? Was it that Andrew Davidson's The Gargoyle, which Mr. Rubin spent more than a million dollars on, fell so quickly from the New York Times best-seller list?

"Why, when you look at how Doubleday was doing and Little Random was doing, did you say Doubleday needs to go away?" the agent asked. "Why was Gina rewarded and Steve punished? Why was that? Was it that Steve had a bad year? Was it more than a few bad bets? Was there not a great problem at Little Random?"

There are a few possible reasons why Ms. Centrello gets to stand with the living today. One theory is that Mr. Dohle favored her because he knew she had already once overseen a consolidation (the integration of Little Random and Ballantine in 2003). Another says Ms. Centrello had an advantage over Mr. Rubin because she's more than 25 years younger than him. A third says she benefited from Little Random's status as the company's flagship imprint, which might have made Mr. Dohle reluctant to fold it into another division rather than the other way around.

It remains to be seen whether yesterday's reorganization signals a new beginning for Ms. Centrello's team of editors at Little Random--specifically, whether the fact that the division's future is now more or less guaranteed will mean they'll settle organically on some collective sensibility so that literary agents have a better idea of what is and isn't worth sending them.

What that collective sensibility might look like is at this point anyone's guess. So far, Ms. Centrello and her number twos--associate publisher Kate Medina and her editorial director, Jennifer Hershey--have signaled an interest in literary prestige, and a deeply held desire to appear in the eyes of agents no less attractive a destination for serious nonfiction and literature than the smug snobs at Knopf. If it's a complex for Ms. Centrello, it's one that probably stems from the fiasco that was the firing of Ann Godoff--the event that of course led to Ms. Centrello's appointment atop Little Random, and what cast her forever as the commercially minded suit whose ascent represented a blow to high culture.

Could the fact that Ms. Centrello got Spiegel & Grau and the Dial Press imprint of Bantam Dell--both very literary-minded outfits, though Spiegel & Grau's two biggest books so far were written by Suze Orman and comedian Artie Lange--mean that Little Random is that much closer now to standing shoulder to shoulder with Knopf?

Make no mistake: as indicated by The New York Times' list of top 10 notable books of 2008--which included fully eight titles from Knopf and none from Little Random--"closer" here still means "really far."

Anyway, according to a top agent, whatever the reorganization did for Little Random's literary profile, it gave Knopf the flagship imprint of Doubleday and Nan A. Talese, both of which are strong literary properties that cut into whatever gain Little Random might have made with Spiegel & Grau and Dial.

"In terms of who gained in terms of literary authority, or clout, or prestige," the agent said, "Knopf got stronger from this than Little Random did, but Little Random got a bit stronger, too, so the distance between Knopf and Little Random is probably increased by this but not by as much as it could have been."

It could have been worse for Little Random, as one highly placed publishing observer said: Spiegel & Grau could have--as might have been expected--ended up at Knopf.

The reason they didn't probably has to do with Sonny Mehta having his hands full. Knopf's editorial department was already stacked with marquee names who are accustomed to buying big books and receiving top-notch support from marketing and sales; Mr. Mehta's welcoming of Nan Talese, as well as Doubleday's Phyllis Grann, Gerry Howard and Allison Callahan, will leave him stretched thin enough without Cindy Spiegel and Julie Grau in the mix.

"Power at Knopf comes from having access to Sonny," said the agent quoted above. "And he's already hard to get access to."

This of course puts Ms. Talese and the Doubleday editors at a potential disadvantage as they try to make their way at Knopf--a fact that supports the point of view that Doubleday lost more than anyone else in yesterday's reorganization. In addition to facing potential competition from longtime Knopf hands, the staff there is also suffering a painful separation from their sister imprint Broadway, which means a lot of their colleagues--Charlie Conrad, Stacy Creamer, David Drake, Michael Palgon, and Kris Puopolo--are all at Crown now.

The motivation for separating Broadway from Doubleday has to do with Broadway's bent towards practical, commercial nonfiction titles, which are more at home at Crown than they would have been at Knopf (Sonny Mehta, when all is said and done, does not really do self-help). The fact is, though, many of the books published under the Broadway name were precisely the sort of high quality narrative nonfiction that secured the Doubleday imprint a place at Knopf. Would it not have made more sense, some publishing observers wonder, to have given up the pretense that Broadway and Doubleday were wholly distinct entities, instead of busting up their alliance along lines that have been mainly nominal for years?

Asked yesterday how it was decided which imprint went where, Random House spokeswoman Carol Schneider said the "alignments are not 100 percent black and white but certain affinities have been brought together."

Which is mainly true--an informal survey of agents and publishers at rival houses suggests that most of the people watching Random right now, though horrified by the inevitably serious layoffs that will result from yesterday's reshuffling, believe that Mr. Dohle did not spend his six months of silence staring at the ceiling.

This was yesterday, though, when these people were discussing it, and one could be forgiven then for feeling too stunned to evaluate in great detail the logic of Mr. Dohle's plan. A few hours after it was announced, after all, the publishing community was rocked by a series of news breaks that taken together gave the impression of an industry under siege. First word came that Simon & Schuster was cutting 35 jobs--including those of Little Simon editor Denise Roy and Scribner's Colin Robinson. Then Ann Patty at the collapsing trade division of Houghton Mifflin Harcourt told GalleyCat she'd been fired along with "a lot" of colleagues, which we now know includes award-winning veteran editor Drenka Willen and Anjali Singh.

If only it could be said that the worst were over. Instead, HarperCollins spokeswoman Erin Crum is telling Bloomberg that her company "hasn't decided whether to eliminate jobs" yet, and Houghton Mifflin Harcourt's treacherous parent company is apparently struggling to find a buyer for the trade division who is willing to accept the massive amount of debt that comes attached to the once-proud property like a ball and chain.

At Random House, most expect that there's only more pain ahead. Cuts there have not even begun, and rumors in the building, though probably founded merely on someone's back-of-the-napkin calculation, predict that reorganization-related layoffs will number in the three figures. Ms. Schneider, the Random House spokeswoman, said who stays and who goes at this point depends on the division heads.

"If the layoffs are necessary, those decisions are going to be made as objectively as possible and as quickly as possible, but I would venture to guess not in the next week or so," Ms. Schneider said. "This is a big reorganization."