A couple of days ago, this link popped up on my Facebook page.
My first thought was that’s absurd. My second thought was no one could be so stupid – this has to be fake news. My third thought, following the lines of one of the other commenters, was if I owned shares in Penguin, I’d be demanding a stockholders meeting and the immediate sacking of whoever came up with this idea.
I don’t pretend to be an expert in traditional publishing. But I do know something of how it works. A traditional publisher will meet all up-front costs (the author’s advance, editing, printing, cover design, publicity, etc) before the book actually hits the shelves. In exchange, the author forgoes all royalties until the first investment is paid off. For example, if My Super Novel is picked up by a publisher at an advance of $1000 and an investment of $3000, I won’t see another cent until that $4000 is recovered. If the book does not happen to bring in $4000, things will get sticky. The publisher probably won’t take a chance on another book by me.
This is why I didn’t believe the post at first. An advance of $60 million dollars is beyond comprehension. All the chatter about John Scalzi getting a $3.4 million book deal suddenly seems a little paltry, doesn’t it? (And Scalzi is an established author with a large fan base.) It is never easy to know just how the money is being spent – traditional publishers are experts at concealing just what pays for what – but we do know one detail from Obama’s deal – there will be a $60 million advance.
Let’s put this into some perspective. This isn’t going to be the only cost Penguin is going to assume. They’ll have to pay for printing the books, for publicity (to be fair, most people know who Obama is), for everything else. And they’ll invest lots of money into this because they will desperately need big sales. Why?
Pretend that the total costs to Penguin are $65 million. Pretend that each copy of this book costs $20 (George W. Bush’s autobiography was originally listed at $35). They will have to sell 3.25 million copies just to break even. Is this even possible? It’s going to be embarrassing to Penguin if they have to go back to Obama in 2018 and request that he repays some of his advance, assuming that’s legally possible. This book deal could break Penguin.
Back when Hillary Clinton brought out Hard Choices, I thought her rumoured $14 million dollar advance was nothing more than a disguised campaign contribution. I doubt Hard Choices broke even, despite the massive investment. A campaign contribution was the only reason I could think of why heads weren’t rolling. This is serious money. An investment on such a scale that flops is a major disaster.
What, perhaps, is Obama running for?
And then another article appeared, yesterday.
This one gives a little more detail. There will be two books (at a joint $65 million dollar advance): one from Obama himself and one from his wife. Apparently, “Obama’s book will be a straightforward memoir about his presidency, while Michelle Obama plans to write an inspirational work for young people that will draw upon her life story.” And apparently most of the colossal advance will be donated to charity.
Call me a cynic, but wouldn’t it be cheaper to simply send the money directly to charity? I suspect there is a market for Obama’s book – if not one big enough to repay a $35 million dollar advance – but will Michelle’s book sell as well?
Will Penguin ever be able to recoup its investment?
The people who will pay for this are not Barrack and Michelle Obama. Nor, perhaps, are they the senior publishers who made this call. No, it is the writers who will be frozen out because all the funds were devoted to this immensely costly project. $65 million is more than enough to publish over two hundred books in all fields, most of which might well repay their (considerably smaller) advances. How does this publishing coup make economic sense?
Back in 1995 – depending on which version of events you believe (I’ve heard several) – a fairly major publishing house made a deal with a household name. This politician’s name would headline a series of books, for which he would be paid a considerable advance. Unfortunately, the politician’s career took a major downswing just as the book came out – he refused to discuss it, sales plummeted, costs had to be recouped somehow (several other authors had to be talked into forgoing some of their royalties, which meant that a number of them walked away) … and the entire publishing house nearly collapsed completely. It took years for the damage to be repaired …
… And that was with a much smaller publishing house.
Is Penguin going to go the same way?
Maybe I’m wrong – I hope I am wrong – but I’m glad I don’t own shares in Penguin.