When word broke early last week that former president and first lady Barack and Michelle Obama had landed a joint deal at Penguin Random House worth a reported $65 million, many in the industry were stunned. The advance is, if not the largest on record for two standalone works, certainly the largest in recent memory.
As is its company policy, PRH has not commented on the money. Some insiders, all of whom spoke to PW on the condition of anonymity, have expressed skepticism about the accuracy of the figure (which the Financial Times first reported). A week before the deal was announced, one high-ranking publisher at another house who had been involved in negotiations said that he thought the two books would fetch a total of $30 million. But many in the business, including scouts monitoring the auction, said they think the $65 million figure is accurate.
Assuming, then, that PRH did spend $65 million on both books, the publisher has a number of ways to make back its money, and then some. Industry members are confident both books will do well in hardcover, trade paperback, e-book, and audio. With Barack Obama’s new book, PRH has a title that will likely be an instant bestseller and will also become a backlist mainstay. It also has the potential to become a popular choice for course adoption. According to NPD BookScan, which tracks about 80% of print sales, Obama’s two previous books, 1995’s Dreams from My Father and 2006’s The Audacity of Hope, have sold roughly 4.7 million print copies combined since 2001, when BookScan started tracking sales.
Michelle Obama’s book is more of a gamble. Many insiders said that, despite her popularity as first lady and the notoriety she achieved in the just-closed presidential election, it’s harder to make an educated guess about how well her book could sell, out of the gate or in backlist.
In addition to not discussing the advance, PRH has released little to no information about the books themselves. As of press time, standard details usually included in acquisition announcements—publication date, the imprint publishing the book—had not been shared. Insiders tracking the books said it was thought that the titles would be released in fall 2018 and that Crown will be handling them, since Crown is the PRH division that published Barack Obama’s earlier books. Other lingering unknowns: who will edit the books and, most crucially, what they are about. (Sources said Obama’s book is not “merely” a memoir.)
Getting back to that advance, and how PRH might recoup its upfront investment, there is the matter of the foreign rights market. (PRH, which acquired world rights, did not respond to an inquiry about whether it will offer rights to the Obama titles at the forthcoming London Book Fair, set to begin March 14.)
A number of insiders said they thought PRH might choose to let each of its international divisions release the books in its home country. Should PRH try, instead, to bring in money through the sale of foreign rights, the question becomes how much publishers in other countries will pay for the books.
One literary agent said he thought the most PRH might make from foreign rights deals was $6 million, explaining that, because seven-figure foreign rights deals are so rare, it is unlikely even the biggest markets would pay in that range. One foreign rights associate guessed PRH could earn $10 million–$15 million from foreign deals. Her breakdown? “The bulk of the money I think would come from the U.K. and Germany, where I imagine they will do seven-figure deals.” She felt the larger markets in Western Europe and Asia would draw less, “albeit six figures.”
Still other insiders said that fathoming the math is impossible, since the sum PRH paid is itself so far from the norm. As one foreign rights associate put it: “We’re all so blown away by the numbers on this deal that the sky’s the limit, right?” She went on, “I’ve rarely seen seven-figure deals abroad, but these numbers are new to the game.”
An American scout, echoing this sentiment, said that because “no one expected it to go this high, [with the books selling for] almost double what we might have imagined,” it’s pointless to rely on history to make an educated guess. “You almost have to throw normal figures out the window.”
Another American scout, who also admitted he never predicted the books would sell for as much as they did in the U.S., guessed that PRH might be able to make as much as $25 million through foreign deals: “I would think that £10 million in the U.K. is crazy—but maybe not. Germany and Holland and Brazil will be the other big territories, I think. Seven or eight million in Germany and Brazil? Two million in Holland? Four million in China?”
In the end, it seems, paying $65 million for these books might not have been such a bad idea.