TIME: Almanac 1995

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<text id=89TT1520> <title> June 12, 1989: Big Books, Big Bucks </title> <history> TIME--The Weekly Newsmagazine--1989 June 12, 1989 Massacre In Beijing </history> <article> <source>Time Magazine</source> <hdr> BUSINESS, Page 44 Big Books, Big Bucks </hdr><body> Here it is: the gripping saga of an industry on a binge, featuring publishers betting millions, authors getting rich 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 price may be too high." </body></article> </text>