All I can say is that her agent earned their 10% that day!

I have been running a small press since the mid-90s. Big publishers don't have that distribution cost you've factored in. In the U.S. they go right to stores via Ingram for a 55% discount. They may not even have to pay shipping. Ingram pays shipping for some vendors.

My guess is that they may even get better terms than that if they are big enough.

And they get their printing cost way down printing in China with huge volume discounts.

There probably are other bits of Big Company magic we small folk don't know about that make the numbers work. For example a movie deal already in the works.

Given the power the accountants wield right now, the numbers would have to work out on paper or this deal wouldn't have gone through.

Yes Jenny, but I'm assessing the UK market. And since I'm with LBS, owned by Hachette, I know that in the UK there's no free shipping. And since I have ten years under my belt working for big companies I feel confident that these numbers and risk factors are pretty much on the nose.

The 35p per unit takes into account the fact that it will include finishes and cost of pulping returns. On invoice it might only be 12p or so, but after shipping, storage, pulping, processing returns, costs creep on.

You're right, of course, about things like film deals. But I wouldn't assume that just because there's a perception that accountants run everything, it's a guaranteed money spinner.

Often, when there is a writer a big publisher wants on their list, they will pay ridiculously high advances, just in order to get them. They know perfectly well that they will never recoup that money through sales. They just want the kudos of that writer. And they can afford it.

I have a couple of comments on this. Firstly, I'm not sure if Cape was Niffenegger's original publisher, but if so, 'The Time Traveler's' wife has probably already earned some of the advance, given how many it's sold. Second, as a writer, I'm delighted for her, but also don't envy her the pressure. And it's nice to know there is still money in publishing even in current circumstances.

However - oops, third point - well, I would have been an accountant if I could do sums - I was interested to note that Niffenegger has sold a partial ms which has then been edited by her editor and agent. Does this mean she hasn't actually done all the work herself? Sounds as though the new book has been bought entirely on the strength of TTTWand I wouldn't be surprised if this second book lacked the magic of the first. And already, there you get some of the kind of pressure the poor woman will be under which she might need her cut of $5m to resist.

hmm, Sarah. I don't really pity her. She doesn't have to write another book. She could probably live comfortably on the proceeds of TTTW for the rest of her days as it's going to keep on selling. And as for the first book earning some of the advance of the second - it can't really work like that. You can't dip into the profit of the first to pay for the second and call it a successful way to run a business.

Since I know little about how the publishing industry works, I'm left wondering who pays for that advance? Where does the publisher recoup its losses from?

Emma

I can't replicate your maths. Given the figures you've presented, I get an income from the HB of £127k for a start.

Doing the rest of the calculations I get a figure of 'only' 1.5m PB sales to clear the advance. Still a great many copies I grant you. I could be doing something wrong but can't work out what. However given sales of the 1st book, these might be considered achievable.

However, I also disagree that paying 'lots and lots' has to mean matching the US advance. I think it very likely though that UK and Commonwealth rights would go for more than £1m. This is still 'lots' This would also mean 'only' 375k of PB sales.

Sadly, the need to write novels rarely has anything to do with money - or none of us would do it. So I shall continue to both envy Nifennegger her $5million and sympathise with the pressure it will put her under - even if the new book succeeds, one way or another it will be accounted a failure - by critics, or readefers, or Cape's accountants etc. etc. Schadenfreude? OK, enough odd spellings already.

As always, I am at a loss to understand why publishers are willing to pay so much up-front for books which are unlikely to turn a profit, let along earn out.

As for pressure on the author: as far as I can see, there is none. The book is complete: the publishers who were involved in this particular bidding war have, I'm pretty sure, all read the finished manuscript and know exactly what they're bidding for.

Holy Cow. That's a lot of money. And a lot of books to sell.
Doesn't sound like a great business model to me! Unless, of course, there is a time traveller in Cape who can get the lottery numbers from the future to recoup the difference. That would make more sense.