How Does a $1,000,000 Book Deal Happen?
Publishers frequently offer high advances not based on measured market analysis, but an irrational fear of missing out.
I haven’t said much about the controversy surrounding American Dirt, both because I’m the last person who needs to weigh in on this book, especially because I haven’t read it, and because I have enough conflicts of interest in the matter that anything I do say about the book could and probably should be considered suspect. So, apart from correcting two tangential factual matters on Twitter, I’ve held back to let other people, whose perspectives in the matter are undoubtedly more valuable, have the floor.
One thing I do feel comfortable talking about, though, is the seven-figure advance that Jeanine Cummins received for American Dirt after it was put up for auction in the late spring of 2018. Or, rather, I can talk about how publishers wind up paying $1,000,000 or more for a book in that kind of auction.
(Full disclosure: I am cribbing much of what follows from something I wrote three years ago about another controversial book, and none of this should be considered a definitive assertion about what happened in the American Dirt auction.)
So: An author delivers her novel to a literary agent, who reads it and becomes convinced that she can persuade somebody at one of the biggest publishing houses to pay an exorbitant amount of money to publish it. The agent will send the manuscript to a select group of editors, along with a cover letter that compares the author to other writers who have impressive sales figures, promising that this book will surely do the same.
If the author is close enough to New York City, or willing to come in, the agent may suggest that editors meet with her, and will schedule meetings with several publishing houses over one, two, maybe even three days. This is more likely to be the case with a nonfiction project, but it’s not impossible that this would happen to a novelist, so I’ll go ahead and mention it. These meetings, if they take place, give the editors, and other members of the publishing house staff, like the publicity director, marketing director, sales director, perhaps even the publisher, to get a sense of whether the author can comport herself effectively in interview situations, and how capable she’ll be in general of carrying her share of the promotional burden. (This is, as I said, perhaps more applicable to nonfiction writers, but can also affect novelists.)
After the meetings, the editors at the various houses get together with their colleagues and figure out whether they really want to publish the novelist’s book. They’re tentatively interested, which is why they took the meeting in the first place, so the question probably isn’t “Do we really want to work with this writer?” but “Do we think people would buy this book?” Spreadsheets are compiled, based on how many books the house thinks it can sell, how much it would cost them to produce that many books, and how much they’d have to pay the author in royalties (under standard industry terms) if they sold that many books.
Meanwhile, the agent contacts the editors, confirming that they’re interested in publishing the book. If enough people express interest, she’ll set a date for an auction; if she’s feeling particularly confident, she might declare a minimum bid, and if you’re going to do that, you’re probably going to be asking for at least $100,000, if not more. Usually, the deadline to participate is noon, so the editors can do last-minute strategizing with their publishers that morning, but some people like to kick things off at 9:00 a.m. Anyway, at the appointed time, the editors email or call the agent with their initial bids.
In some scenarios, everybody gets one chance to bid, and the agent, after conferring with the author, goes with whoever offers the most money. (There are some reasons an author might not choose the highest bidder, but those are idiosyncratic enough that we’ll overlook them for now.) Generally speaking, though, after reviewing all the bids, the agent will look at the highest one, then contact the editor who made the lowest bid. (Remember when the publishing houses figured out how much they’d have to pay in royalties if they sold a certain amount of books? That’s not their opening bid; it’s a floor, rather than a ceiling.)
“Hey,” the agent will say, “the top bid right now is $XXX. Can you go higher than that?” Editors will either go higher than the highest bid, or they won’t. If the lowest bidder drops out, the agent turns to the second-lowest bidder. Well, actually, the agent turns to the second-lowest bidder whatever the lowest bidder does, it’s just a question of how much money that editor will have to bid to stay in the auction. Same for the third-lowest bidder, and so on down the line.
So what happens when the highest bid is greater than the amount in royalties a house has already figured on paying? If this happens to you, you have a choice. Apparently another publishing house thinks it can sell more books than you thought you could sell. Are they right, or are they fooling themselves? You huddle with your publisher, your marketing and publicity directors almost certainly have some input, and you revisit your math. Together, you figure out how many books you’d have to sell to beat the new highest bid, and you decide whether that’s realistic or not.
It’s that process that can make a literary auction a drawn-out affair. No agent expects an editor will be able to give an immediate yes-or-no answer when asked to raise their bid, so everyone factors in a few hours between bids for those in-house conferences to take place. Editors don’t get to take forever, but they still have long enough to deliberate that an auction can last an entire day, sometimes even two, until finally there’s only one publishing house whose money is still on the table.
(Rachel Deahl of Publishers Weekly reports that nine publishing houses participated in the “final rounds” of the American Dirt auction, which might mean that it was submitted to additional editors who declined to participate at all, or who dropped out of the bidding early. Again, I have no idea what happened in that particular case.)
So, how does all that escalate until the author winds up with a million-dollar deal?
Remember, all those editors at all those publishing houses are taking part in the auction because they and their colleagues have faith that the book can sell a lot of copies. When you get to a point where a number of your rivals are demonstrating more faith in the book than you, you may well start to ask yourself whether you’re not being ambitious enough.
Fear of Missing Out is a very real thing in book publishing. It’s almost funny: Editors turn down one book after another, because they’re worried their publishing house won’t be able to sell enough copies to make it worth their while, but if enough editors at other publishing houses start expressing interest, suddenly everybody wants in, and might wind up spending two or three times what they initially planned to spend in order to get their hands on that book.
And, if we can turn the conversation back to American Dirt briefly, one thing I do feel comfortable saying is that if Flatiron Books was willing to pay at least $1,000,000 for the book, that means at least some of those other eight editors, representing imprints at all the “Big 5” publishing houses based in New York City, along with one major independent publisher, were willing to pay $250,000 for it. Some of them were willing to pay $500,000 for it. Some of them were willing to pay $750,000.
Even if most of those editors are not now willing to speak on the record about American Dirt, it’s safe to say that, in the spring of 2018, they agreed with Amy Einhorn at Flatiron Books that it was a novel that was, from a financial as well as a literary perspective, worth publishing.
As a writer, I’m abstractly happy for any writer who is not already a publicly recognized asshole and manages to land that kind of advance, and personally delighted if by chance I know the author directly, although that happiness might be tempered by a concern about whether their book would be able to live up to the publishing house’s expectations—because, if a house pays a lot of money for a book, and it flops, as far as they’re concerned, it’s almost always the book’s fault. It’s almost always the author who will be turned away when her next novel is complete, who will wind up taking a smaller advance from another publishing company, who might not ever get another book deal at all. (And, as literary agent Anna Sproul-Latimer explained on Twitter, who did not profit nearly as much from that million-dollar deal as you think she did.)
As a former acquisitions editor, though, I’ve essentially come to believe that no book is worth a million dollars up front, unless the writer’s previous book generated that much in royalty revenue and frankly not even then most times. Spending that kind of money on an unproven manuscript is, at least in my opinion, an unnecessary risk, one that’s frequently driven not by measured market analysis but by irrational insecurity.
Not every publishing house gets caught up in that irrational spiral, of course, because once you get past the Big 5 and a few major independent publishers, nobody can afford to take part in it anyway.
But that’s how it happens, when it happens.
(photo: Nick Ares)