20 March 2009

Understanding Obama’s “New” Book Deal

Considering how many newspaper reporters want to land book deals (especially now that those newspaper jobs don't look so secure), it's surprising what a poor job newspapers do at covering the book business. Not that the peculiar publishing industry makes sense, of course, especially from the outside.

The latest evidence for this disconnect is the headlines about Barack Obama signing a "new deal" with his publisher, Crown, shortly before taking office. The UPI said he "secured a $500,000 advance," for example. Except that the same story also said, "the publisher will receive half of the money," which (a) is not how publishing advances usually work, and (b) means Obama has secured only $250,000, no? But many other news outlets said the same thing.

The New York Times, which runs hit or miss on the book business, reported more important details:

When Mr. Obama wrote “Dreams From My Father,” which came out in 1995, he did not sell enough books to pay back the advance of $30,817. [Probably $30,000 to Obama or his agent, and $817 in indexing or typesetting costs charged against royalties.] But when it was reprinted after his speech to the Democratic National Convention in 2004, sales flourished, which led to another book deal worth $1.9 million.

For that, Mr. Obama agreed to write another nonfiction book and a children’s book. He wrote in his disclosure report that he intended to delay both books until he left office.

Robert B. Barnett, a Washington lawyer who represents Mr. Obama on his publishing work, said Thursday that the $500,000 agreement was not for a new book but rather for a license so the president’s autobiography could be condensed into a book for middle-school students.
So this isn't a "new deal" at all. Obama simply signed off on a subsidiary-rights license that Crown wanted to exercise under his old Dreams From My Father contract, covering the right to adapt that book for young readers. That explains the 50-50 split in the advance; that's the usual split on such rights for first-time unknown authors, as Obama was when he signed that deal.

It's easy to see what Crown was thinking. The firm had a deal with Obama for a book for young people. His visibility can't get any higher. But obviously he's not going to deliver that book for at least four years, possibly eight. So why not approach Obama's people with the suggestion that the firm find someone to adapt his old book for those readers now?

Crown and Barnett probably negotiated a deal that's valued as if an outside company had come to the firm to buy those rights. Crown would charge such a company a $500,000 advance for the license, half of which would go to Obama. Therefore, Crown pays that half to Obama now and shifts the other half on its balance sheets.

Obama has received $250,000, but he still has to wait for the new book to earn $500,000 in royalties before he sees any more payments. In effect, he's getting only half-royalties on this adapted book (and it'll have a cheaper price than the original edition as well). Of course, the President's not doing any of the new work to adapt the text. I'm sure we'd all agree that he has more important tasks right now.

1 comment:

Anonymous said...

For shame! There's something more important than writing a children's book?!