NY Times on Advances

http://www.nytimes.com/2009/04/12/books/review/Meyer-t.html

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.

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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.”

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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.)

…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.”

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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.