BUSINESS, Page 44Big Books, Big BucksHere it is: the gripping saga of an industry on a binge,featuring publishers betting millions, authors gettingrich and agents calling the shots
By PRISCILLA PAINTON
Fortune had eluded Layne Heath. His brick business in Fort
Worth had gone belly up. He had tried construction work and humping
freight on loading docks, but without graduating far beyond the
minimum wage. So to nurse his bank account and a romantic ambition,
Heath pulled out his typewriter and tapped out a novel based on his
days as a helicopter pilot in Viet Nam. In March William Morrow and
Avon Books paid Heath $300,000 for his novel, CW2 (after his former
military rank, chief warrant officer, second grade). "Beats the
brick business," says Heath. "But then, anything beats the brick
business."
If Heath's big score seems as unlikely as breaking the bank at
Monte Carlo, it isn't. Like a gambler hooked on high-stakes
roulette, the general-interest segment of the $15 billion
book-publishing industry is on a binge. In this go-go market, which
represents one-third of an industry that includes books ranging
from college texts to Bibles, editors are frantically putting bets
on any potential best sellers. In recent months, the spin of the
wheel has made not only a construction worker but also a Yale
history professor and several fresh college graduates richer than
they ever could have imagined. Publishers say the bull market for
manuscripts has become "hysterical," "desperate" and even "silly."
Still, most of them cannot help playing the game.
Take Joni Evans, publisher of adult trade books at Random
House. Two years ago, when she worked in a top editing job at rival
Simon & Schuster, Evans was so determined to keep author Mario Puzo
in her literary camp that she offered him a $3 million advance for
his next book, sight unseen. A competitor outbid her by $1
million, so she matched the offer. "When I have to have it, I have
to have it," she explains. The Godfather author, who jumped to
Random House when Evans moved there in late 1987, is expected to
deliver his pricey manuscript in about six months.
Less than four years ago, the publishing world gasped at the
$5 million advance that William Morrow and Avon Books paid for
hard-cover and soft-cover rights to James Clavell's Whirlwind. That
record-breaking sum has since been equaled or topped repeatedly.
Horror writer Stephen King was reportedly promised between $30
million and $40 million for his next four thrillers, to be
published by Viking Penguin and New American Library. Simon &
Schuster and Pocket Books shelled out $10.1 million for the next
five novels from suspense writer Mary Higgins Clark. Warner Books
paid Southern historical novelist Alexandra Ripley $4.9 million for
the unwritten sequel to Gone With the Wind. (Margaret Mitchell's
advance was all of $500 for writing the original.)
Publishers are profligate these days partly because the
competition forces them to be. The book industry's long march
toward consolidation has left it dominated by about six major
houses, each infused with capital, each run by managers whose
favored reading is the bottom line, and each part of, or with
ambitions to be, an international publishing conglomerate. In the
past three years alone, the adult general-interest book trade has
been transformed by at least 16 major acquisitions, from the 1986
purchase of Doubleday by West Germany's Bertelsmann (price: $500
million) to last year's takeover of Macmillan by British publishing
magnate Robert Maxwell ($2.7 billion). As early as 1987, Warner
Books chairman William Sarnoff quipped at the booksellers'
convention in Washington that soon "we'll all just meet at the
office of the lone remaining publisher." At this point, according
to James Milliot, editor of the industry newsletter BP Report, the
top six publishing houses reap 60% of all adult-book revenues, in
contrast to 50% in 1983.
As book bids escalate, so does the publishers' anxiety that
they may be setting themselves up for major pratfalls. Says Evans:
"Every day somebody gives us a time bomb. They look very pretty,
and they're only costing you $2 million, but they're going to go
off." Among last year's crop of six-figure books that failed to
make the national best-seller lists: Jay McInerney's third novel,
Story of My Life (Atlantic Monthly Press); George Bernau's first
novel, Promises to Keep (Warner Books); and Studs Terkel's The
Great Divide (Pantheon Books).
While the books of story spinners like Danielle Steel and
Judith Krantz are usually reliable bets, a more striking measure
of the risky bidding war is the six-figure contracts that
publishers are dangling in front of unknown authors or those who
would have been considered hopelessly academic not long ago.
Sometimes these eye-popping deals are based on a one-page proposal
sent over a fax machine, or even on no proposal at all. Yale
history professor Paul Kennedy, who received an advance of about
$20,000 from Randomm House for his surprise 1988 best seller, The
Rise and Fall of the Great Powers, got $600,000 from the same
publisher to write a second book that will take years to finish.
Carolyn Heilbrun, whose nonfiction books have never sold more than
20,000 copies, just walked away with $350,000 from W.W. Norton for
a biography of feminist Gloria Steinem.
What has increased the publishing industry's appetite for fresh
manuscripts is a steady, decade-long expansion in the market for
hard-cover best sellers. With their combined 2,100 outlets,
Waldenbooks and B. Dalton have created a vast distribution system
for general-interest hardcovers. The Book Industry Study Group
estimates that retailers sold 286 million such books last year, up
33% from 1983, while publishers' revenues from those volumes nearly
doubled, to an estimated $2.2 billion.
While the heavy advances for potential best sellers have
prompted some authors to fear publishers will neglect books of
lesser commercial potential, the demand for new books has actually
produced a greater variety at many firms. Doubleday plans to
publish 18 literary novels this year by first- or second-time
authors, in contrast to only two in 1986. Says literary agent
Virginia Barber: "We used to get as little as $5,000 for a literary
novel. Now it might sell for $20,000."
With these tectonic shifts, the business has abandoned its
pretenses of collegiality and moved closer in structure and style
to Hollywood, where an oligarchy of half a dozen companies hustles
for hits. Says Michael Korda, editor in chief of Simon & Schuster
and a best-selling novelist himself, on the subject of big
advances: "It's like stars in the movie business. If you want Cher
for your movie, by God, you've got to pay Cher."
Since the number of authors who can deliver blockbusters is
limited, literary agents have amassed unprecedented clout. One of
the most powerful is Manhattan's Morton Janklow, whose literary
agency represents such hugely commercial writers as Sidney Sheldon
and Jackie Collins. Janklow boasts that since 1981, when the Hearst
Corp. bought the publishing house of William Morrow for $25
million, he has closed three deals with individual authors that
were each in excess of that amount. Naturally, the agents are
fanning the bidding frenzy. Says Evans: "It used to be you would
see if there was substance to a book. Now if you say, `I'd like to
meet the person,' or `Can we have a conversation?', some agents
impatiently go to someone else."
But if publishers are paying more, they are also demanding more
for their money. The major houses today have both hardcover and
paperback imprints. To increase their chances of making a profit,
they often insist, with authors ranging from Paul Kennedy to
Stephen King, on acquiring the right to print properties in both
forms. As another type of economic protection, book companies are
taking advantage of their growing international reach by more often
asking for foreign rights to a book.
The bidding wars are particularly challenging for the few
remaining independent companies, most notably Houghton Mifflin and
Farrar, Straus & Giroux. When longtime Farrar, Straus author Tom
Wolfe scored a blockbuster in 1987-88 with his first novel, The
Bonfire of the Vanities (hard-cover copies sold: 750,000), rival
publishing houses were rumored to be making offers of $15 million
or more for his next book. Farrar, Straus, which had total revenues
of only about $30 million last year, managed to assemble a deal
with paperback publisher Bantam Books that paid Wolfe an estimated
$5 million to $7 million. Says Roger Straus III, the publishing
house's managing director: "It's a terrific strain on us. It's like
a Monopoly game out there, and everybody has play money, but we're
buying Park Place with real cash."
For many editors, a major concern is that the chain-bookstore
outlets, which give little space on their increasingly crowded
shelves to titles without mass appeal, will eventually reduce the
publishing industry's incentive to bring out worthy books if they
don't seem headed for the best-seller lists. Random House editor
Jason Epstein, for one, has undertaken on his own to produce a
bookstore in the form of a mail-order catalog that will contain
about 200 categories of books and more than 40,000 titles, each
accompanied by a short explanation. The $24.95 catalog, the size
of a telephone book, will be available in bookstores in September
(initial printing: 50,000 copies).
Publishers are hoping the bull market for writers will reverse
itself, making authors and their agents humble again. Most of all,
they talk nostalgically of the days when writers remained faithful
and when publishers were not obsessed with best sellers and did not
have to worry, in the words of Random House's Epstein, about
"getting Faulkner on TV." Pointing to a promising first novel on
his desk, he muses, "This just turned up the way these things do.
But if the book is a success, we may never publish him again. His
