Large advances are not the most important factor for book deals, S&S merger trial hears
Bestselling author Charles Duhigg and a number of agents have told a court advances are not the most important thing in book deals, highlighting the role of editors and imprints in making titles a success.
At a trial in Washington DC last week where the US Department of Justice is bidding to block Penguin Random House’s $2.2bn merger with Simon & Schuster, a series of witnesses for the defence sought to play down the significance of large advances.
The Department of Justice case focuses on “anticipated top selling books”, whose authors earn at least $250,000 in advances. The government argues a merger will drive down those advances through less competition.
Duhigg, author of runaway PRH-published hit The Power of Habit, repeatedly praised his editor Andy Ward during his testimony, even suggesting Ward’s name should appear on the cover of his books. “It only succeeded because of Andy,” he said.
According to Publishers Weekly, Duhigg told the court: “If this merger goes through I believe PRH wants to make the world a better place for writers. The thing I know about Andy Ward and PRH is that they love authors and want to give us the freedom to write what we want to write.”
The author explained he accepted a $2m advance for his third, forthcoming, book despite his agent Andrew Wylie saying they could get up to $5m elsewhere. “I specifically said I did not want to do that,” he said. “It’s a very, very bad idea to take a very large advance.”
He said: “For someone who is an expected bestseller, you anticipate that you will earn royalties in excess of your advance. Like that’s the whole point of being a bestseller.”
Judge Florence Pan told Duhigg he was not typical of other authors she had heard about during the trial so far, Publishers Lunch reported. She said: “I feel you may be atypical for what we’re focusing on here, which is advances and things of that nature, because if you — you sort of have the luxury of saying: I’m going to get royalties later, so I don’t care as much about what the advance is now. I just need enough to write this book.”
Pan asked: “If you were an author who can’t expect necessarily to earn out their advances, wouldn’t they need more of an advance to make sure they can keep supporting their writing? Because they have more risk.”
In later testimony, agent Elyse Cheney also played down the importance of advances, saying she regularly urged clients to turn down larger sums and instead focused on making sure their books went to the best publisher for that particular title.
She explained: “If I go to somebody with this one particular project that I think is very valuable, I’m going to the person who has the highest success rate with that kind of book. I’m going to the person who understands how to position that book in the world. I’m going to the person who knows how to work with my author to get the best book possible out of them. If that person, that editor, and I see eye to eye, we’re both going to see the maximum value of that particular project.”
Cheney said the effect of a merger between PRH and S&S on her authors was “neutral to positive”. She explained: "In general, Penguin Random House has made a commitment to books over a very, very long period of time, and because they’re a private company, they can invest long-term in things like infrastructure, printing. Whereas, a company like Simon & Schuster, which is shareholder-driven and quarterly-report driven, it cannot make those kinds of investments. So I do think that Simon & Schuster could benefit from some of the tools that Penguin Random House has developed over time.”
Agent Andrew Wylie of the Wylie Agency, meanwhile, told the court the merger would have a positive result for his clients, explaining: “What is important, in my view, for Simon & Schuster is to have its enterprise supported by an understanding parent company. So if it were, for instance, to go to private equity, as happened originally with Houghton Mifflin, the private equity company wouldn’t understand the business it was in.”
Asked why so many of his deals were done with the Big Five publishers he said “they have the broadest talent editorially, they are generally well financed, and their production and distribution is expert”.
The trial also heard from publisher of PRH US imprint Putnam, Sally Kim, who said her boss approves advances up to $250,000, after which he needs the approval of Penguin Publishing Group president Allison Dobson, Publishers Lunch reported.
She added other PRH imprints were probably her “fiercest competitors” when it comes to acquiring books. “My sense, I think, is we actually lose more to an internal peerage imprint than we do external,” she said.
The trial continues.
