Fund accounts 2011

Interesting read about a book advance.......


Essay

About That Book Advance ...




By MICHAEL MEYER

Published: April 10, 2009


“In the old days,” the novelist Henry Bech, John Updike’s fictional alter ego, once said, “a respectable author never asked for an advance; that was strictly for the no-talents starving down in the Village.”

Since then, Washington Square rents have soared, and writers of fair and ill repute alike seek advance payment for their books. Once minuscule, some advances have escalated into the millions, like the $5 million Scribner paid last month for Audrey Niffenegger’s second novel, “Her Fearful Symmetry.” News of that deal may have seemed odd coming shortly after the chief executive of Simon & Schuster, Scribner’s parent company, announced that because of declining revenue the house would be “watching every penny.” Indeed, in the latest of a string of eulogies for the book industry as we know it, Time magazine fingered advances as part of the “financial coelacanth” of publishing’s business model, doomed to disappear like brick-and-mortar bookstores.

Yet despite the economic downturn, and the fact that 7 out of 10 titles do not earn back their advance, the system doesn’t seem to be going away anytime soon. In recent interviews, a dozen New York-based publishers and agents told me, more or less, “Publishers have to keep buying books,” and “They have to bid for the best books” — which in large part means those that will sell.

Advances are seldom specified authoritatively. Amounts are coyly described like cigarette brands — the “mid-fives,” the “low sixes,” the “mild sevens.” In the preface to “A Heartbreaking Work of Staggering Genius,” Dave Eggers broke form by telling the reader he received $100,000 for the manuscript, which — after his detailed expenses — netted him $39,567.68.

Advance envy is common. “Writers who can’t recall their Social Security number can say to the penny how much of an advance their nemesis received,” Elissa Schappell, a fiction writer and co-editor of the anthology “Money Changes Everything,” said in an e-mail message. To an outsider, the numbers can seem arbitrary, even absurd. “No one ever says of an advance, ‘That’s exactly what that book deserves,’ ” Schappell said. “Yep, a coming-of-age first novel involving drug addiction and same-sex experimentation is worth $25,000.”

As a payment to be deducted from future royalties, an advance is a publisher’s estimate of risk. Figures fluctuate based on market trends, along with an author’s sales record and foreign rights potential, though most publishers I talked to cited $30,000 as a rough average. In standard contracts, the author receives half up front, a quarter on acceptance of the manuscript and a quarter on publication, though that model is changing, said the literary agent Eric Simonoff, whose clients include James Frey and Jhumpa Lahiri. “Now we see advance amounts being paid in thirds, fourths and even fifths,” Simonoff said in an interview. “For a writer dependent on those funds, that’s not an advance, it’s a retreat.”

The numbers can sound much bigger than they are. Take a reported six-figure advance, Roy Blount Jr., the president of the Authors Guild, said in an e-mail message. “That may mean $100,000, minus 15 percent agent’s commission and self-employment tax, and if we’re comparing it to a salary let us recall (a) that it does not include any fringes like a desk, let alone health insurance, and (b) that the book might take two years to write and three years to get published. . . . So a six-figure advance, while in my experience gratefully received, is not necessarily enough, in itself, for most adults to live on.”

The novelist Walter Kirn agrees. “A low-six-figure advance has allowed me to work at less than minimum wage for three years,” he told me. “Perhaps that’s for the best; a large advance might create a disinclination to do anything other than play blackjack in Las Vegas. When I hear these large, publicized advances, it feels like watching the casino play around me.” (Weep not for Kirn, however; he phoned me from the set of the film adaptation of his novel “Up in the Air,” starring George Clooney.)

The question of what to pay which authors has confounded publishers at least since a stationer agreed to give Milton £5 for the right to sell “Paradise Lost.” Joseph Conrad often begged his agent for more money and once asked to be advanced “a fountain pen of good repute.”

But the current culture of blockbuster advances really took shape in the 1970s, when “hardcover publishing was becoming research and development for mass-market paperbacks,” said Peter Mayer, who started the trade paperback division at Avon Books and is now publisher of Overlook Press. “It was the hardcover houses who drove the increases by selling paperback rights.”

In 1971, for example, Viking sold paperback rights to “The Day of the Jackal” to Bantam for 36 times the $10,000 hardcover advance it had paid its author, Frederick Forsyth. “Agents realized that they should be the ones holding auctions for their authors and get advances more in line with the anticipated total value of their books,” Georges Borchardt, who brokered the hardcover rights, said in an interview. (Full disclosure: Borchardt, who is my agent, got me $50,000 for my first, nonfiction book.)

In the 1980s and ’90s, big money also started taking hold on the literary end. Agents like Andrew Wylie succeeded in fetching celebrity-size advances for canonical authors — Norman Mailer, Philip Roth, Salman Rushdie — on the strength of their backlists and sales over time. Before then, the biggest advances went to “disgraced politicians and failed novelists,” Wylie said in an interview. Not that everyone was happy about the littérateur’s shift in fortunes. In 1995, Martin Amis drew the kind of anger reserved these days for derivatives traders when he left his longtime agent for Wylie, who sold Amis’s novel “The Information” for the then outlandish sum of half a million pounds, or nearly $800,000.

Today, such figures are hardly unusual. Jonathan Safran Foer’s first novel, published in 2003, is said to have fetched $500,000. More recently, Foer’s brother Joshua reportedly got $1.2 million for a book about memory competitions.

But some say that authors grabbing for the brass ring can risk not just ridicule and envy, but their careers. “It used to be that the first book earned a modest advance, then you would build an audience over time and break even on the third or fourth book,” Morgan Entrekin, the publisher of Grove/Atlantic, said in an interview. “Now the first book is expected to land a huge advance and huge sales. The media only reports those, not the long path of writers like John Irving, Richard Ford, Anne Tyler and Toni Morrison. The notion of the ‘first book with flaws’ is gone; now we see a novelist selling 9,000 hardcovers and 15,000 paperbacks, and they see themselves as a failure.”

At PublicAffairs, an independent house specializing in current events, advances are as good as capped, said its founder, Peter Osnos. Osnos paid an average advance of $40,000 for PublicAffairs’ four New York Times best sellers in 2008, including Scott McClellan’s “What Happened,” sums greatly augmented by royalty payments when the books hit it big. “If the market says you need to pay $10 million to acquire a title, no one requires a publisher to pay it,” he said in an interview. “You’re not going out of business if you don’t pay that money.”

Today, some publishers are experimenting with low or no advances. In exchange for low-five-figure advances, the boutique press McSweeney’s, founded by Eggers, shares profits with its authors 50-50, as does the new imprint Harper Studio, which offers sub-six-figure advances.

As for Henry Bech, Updike — whose own advances were reputed to be modest — never let him take money up front. But Bech couldn’t entirely avoid the commercialism engulfing publishing. He turned in his final manuscript to his longtime publisher, Vellum Press, which had been sold to a supermarket chain that peddled it to an oil company, which foisted it off on a shale-and-lumber conglomerate. “It was like being a fallen woman in the old days,” Updike wrote. “Once you sold yourself, you were never your own again.”

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jd wrote:
Wow! The spin on this report is a sight to behold

Absolutely!

the report is termed 'exclusive'.

All the 'journalist' has done is to look uncritically at the 2010/2011 accounts filed at Companies House which anyone can do if they pay a £1 fee.

Why doesn't he ask where the advance is ? Has this too been 'abducted' and do we need another Fund to find where it is?

Why doesn't he ask why there is no detail in the Income and expenditure Account? Why does he not mention the issue of legal costs?

The only thing I didn't know was the '8 new leads' but perhaps he made that up?

[quote="pauline"]

jd wrote: The only thing I didn't know was the '8 new leads' but perhaps he made that up?

This was the retrieval of the 8 boxes from M3 in Barcelona last November, which in the report was cleverly termed 'private investigators'... implying that they were currently investigating....which they are not. What this report didn't tell you was the fact that M3 were off the investigation a few years ago and were found to be as totally corrupt as anyone can be

is it a fact that the book fees would not show up in the 2010 to 2011 set of taxes?surely most of it would be in 2011 to 2012?joyce1938

Although the full article posted in a thread on Leveson inquiry - I thought I would put this in here as it applies................



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[quote]


"Every paper was doing the same thing, which is why every paper or most papers paid money to the McCanns. Only we were scapegoated by the ex-chairman of the PCC," he told the hearing at the high court in London.



So every paper or most paid out to the McCanns, that was kept a bit .

joyce1938 wrote:is it a fact that the book fees would not show up in the 2010 to 2011 set of taxes?surely most of it would be in 2011 to 2012?joyce1938

The advance royalty payment made wouldn't appear in the turnover/sales for the company (as the sales weren't made by end March 2011) but the amount paid should have been included in the cash at bank and a note put on the accounts to explain this to the tax office.

Gillyspot wrote:

joyce1938 wrote:is it a fact that the book fees would not show up in the 2010 to 2011 set of taxes?surely most of it would be in 2011 to 2012?joyce1938

The advance royalty payment made wouldn't appear in the turnover/sales for the company (as the sales weren't made by end March 2011) but the amount paid should have been included in the cash at bank and a note put on the accounts to explain this to the tax office.

Will the amendments to the Fund cover this?

[quote="candyfloss"]Although the full article posted in a thread on Leveson inquiry - I thought I would put this in here as it applies................



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"Every paper was doing the same thing, which is why every paper or most papers paid money to the McCanns. Only we were scapegoated by the ex-chairman of the PCC," he told the hearing at the high court in London.



So every paper or most paid out to the McCanns, that was kept a bit .

Yeah but were did the money go?