Archive for November, 2009

Rushdie and Me: After the Bombing

November 23, 2009

Last week I wrote about my experience at Cody’s during the Rushdie Affair in 1989.  It didn’t really end the day the bomb went off. The melodrama continued for months, both in my life and in the  book world.

After the bomb squad detonated the bomb in the store, I hung around for the rest of the day watching the FBI sort through the rubble in their investigation. My wife, Joyce Cole, contacted the media who had been filming all this and told them that my life was in danger and they should block out my face. That night we watched the 6 o’clock news and saw the interview of me with my face looking like a  Picasso in his Cubist Period. Like Rushdie’s fake mustache in Hyde Park, this wasn’t going to fool anyone.

The same day Peter Mayer, the publisher of Penguin Books, called us and offered the services of their security advisory agency. The Satanic Verses had been out of stock at the publisher for a week, and almost no one in the country had it. The chains probably did, but they had taken it off their shelves. Peter said that because of our courage (or whatever  it was),  Penguin was going to overnight our shipment of the next printing, so we would be the only book store on the street  (and probably in the country) selling it. This was a touching expression of gratitude, but one not likely to help me sleep  more peacefully.

 The security consultant provided to us by Penguin had a lot of experience protecting companies against labor unrest, but  I doubt that he understood any more about terrorist bombings than I did. On his advice, my family left our house and settled in at  my friend’s house  for a week. Although I wasn’t aware that the Ayatollah had issued a Fatwa against me, we felt it was the prudent thing to do.

 The next day there was a picture of Cody’s on the front page of The New York Times. I’d been waiting all my life for this moment. Unfortunately, the picture they decided to use was of a guy from the cleaning service sweeping up. I thought that was the end of my fifteen minutes of fame.

But I was advised by the security people to stay out of the news anyway. Though I ate bitter bile, I told the Cody’s folks to deal with all media queries by saying “Mr. Ross is unavailable for comment at this time”. That is what they told  Dan Rather. That is what they told The New York Times. That is what they told McNeill – Lehrer. For all I know, that is what they  told the Pope.

For the next 2 days and nights, I sat at my desk designing a security plan for Cody’s to be implemented when we reopened after the FBI went home. When it was completed, it was a pretty impressive document. But  I knew then, as I know now, that it was something of a formality to make the employees feel more at ease. It was going to cost a lot of money and be a big hassle and wasn’t likely to deter a serious or even a casual terrorist. The plan included specific procedures for dealing with “suspicious ” people, evacuation procedures, inspections at the front door, dealing with media, and metal detectors in the shipping room.

The first scare we had was when we found a letter addressed to me. The bells and whistles went off when we scanned it with a metal detector. We evacuated the building. The police courageously told me to open it myself. It turned out that it was a  cutesy note from Melissa Mytinger, the events manager, with a little smiley face metal foil sticker inside.

We did see a lot of customers with sort of  sinister Middle Eastern looks to them and shifty eyes. I would usually get a warning call from the information desk saying  that they saw “a sort of sinister, middle eastern looking guy with shifty eyes”. It turns out that there were a number Muslim individuals who came into the store looking to buy the book. The shifty eyes may have had to do with the fact that they were doing something naughty. But I don’t know. They also warned me about another suspicious person. It turns out that he was from New Delhi, a Hindu, and a friend from the book business.

One of the most poignant  encounters I had was with a group of Muslim students at UC Berkeley who wanted to express their compassion for Cody’s and to tell me that they were ashamed of all this. As you can imagine, any Muslim in America was getting a very raw deal with the hysteria that was going on. I told them that I wanted to apologize to them for what they must be suffering. I realized something important during that encounter.

We still kept getting calls from the media  who wanted six o’clock news clips of the security measures. For some reason, they all wanted to ask me if we were going to put the book in the window. As if I would risk getting by ass blown to smithereens so they could have a sound bite. I think what they really wanted was for me to get up on a soap box in front of the store facing a thousand cameras  and say: “Ayatollah Khomeini, Read…..my….lips!”

Eventually things settled down. We slowly in stages phased out the security plan. There was a lot of debate about eliminating each measure. The gist of the conversation at each step was something like: “What do you care more about? Human life or money?” But we moved on. We sold over 700 copies of  The Satanic Verses the week after we re-opened. I think that it was more an act of solidarity than an interest in the book. A lot of people told me later that they never read the damn thing.  Some people wanted me to autograph it. I think I demurred. What did they want me to inscribe anyway? “I am Salman Rushdie!”

A few months later, I was called by the National Association of Newspaper Editors and asked if I would be on a panel at the convention to talk about my experiences. I told them that I had been trying to avoid the media. They told me not to worry. It was going to be quite discrete. I can’t imagine how I believed that  a speech in front of every major editor of every newspaper in the country could ever be discrete. So I went there. I was on a panel with Larry McMurtry and Robin Wright, a distinguished journalist covering Iran. I should have known that there was nothing discrete about the meeting when I saw the prime minister of Israel who was giving the presentation before  us, followed later by the Palestinian representative to the UN.

I got there and saw that the whole show was being broadcast on C-SPAN. I told them my “Ayatollah, read my lips” line and got a lot of laughs. Then I went home and watched myself on national TV. As you can see, I lived to tell about it.

The following summer Susan Sontag was invited to give a speech about the whole affair at the American Booksellers Association  Convention. I went there hoping that at last she would acknowledge that Cody’s did something special. She was extremely critical of almost everyone in the book business who refused to stand up and be counted or who didn’t allow their names to be used in full page ads in The New York Times. But she did want to acknowledge the commitment shown by independent bookstores. And she wanted especially to single out  one in Berkeley, California: Black Oak Books.

I guess this just shows that in real life stories don’t always end the way you would like.

Remembering the Rushdie Affair

November 18, 2009

On February 28, 1989, Cody’s was bombed. I remember being awakened by the police who informed me that a fire bomb had been thrown through the window of Cody’s. The fire department had broken into the store putting out the fire. The firemen’s efforts at containment did considerably more damage than the fire, itself. I came down to the store at about 2 AM. I waited around most of the night. I made some phone calls to the American Booksellers Association and, I believe, my mother and brother informing them of the incident.

We assumed that the bombing was associated with the so-called Rushdie Affair, although it was never learned exactly who was responsible for the incident. But I assumed that it probably wasn’t a disgruntled ex-girlfriend of mine.

Let’s backtrack a little. In September 1988, Penguin Books published The Satanic Verses by Salman Rushdie in the UK. From the beginning it was considered a literary masterpiece and Rushdie’s most ambitious work. Sadly for him, it satirized some themes in Moslem history and theology. In February, 1989, the Ayatollah Khomeini, spiritual leader of the Iranian revolution, issued a Fatwa, a decree under Muslim Sharia law, declaring the book blasphemous and offering a bounty for Rushdie’s murder.

Rushdie went into deep hiding, although someone said they saw him in Hyde Park in disguise. When asked what Rushdie looked like, the person responded that he looked like Salman  Rushdie with a fake mustache.

The publication unleashed a fire storm, literally and figuratively. There were book burnings all over the Moslem world and fire bombs thrown into book stores in the UK. In the book world there was a veritable frenzy of people issuing pronouncements about defending freedom of speech from terrorists and fanatics. There was a lot of talk about people sacrificing their lives, if necessary, to protect this freedom. Writers’ organizations started handing out buttons that became ubiquitous in publishing saying: “I am Salman Rushdie!”. Of course with the death threats flying around, certain wags started wearing buttons saying: “He is Salman Rushdie!”.

The book was published in the United States at the beginning of February. Several weeks later, America’s largest chains: B. Dalton, Waldenbooks, and Barnes & Noble pulled Satanic Verses from their shelves nationwide. The writers’ organizations, led by PEN America and just about everyone else in publishing went ape-shit. PEN organized a public reading of Satanic Verses and a march to Dalton’s to picket the store. Susan Sontag was president of PEN. Norman Mailer was the past president. They were everywhere speaking about the outrage. There continued to be much breast beating about people’s willingness to give their lives for the cause.

I was watching all this with a lot more than detached interest. It was pretty easy for Norman Mailer and Susan Sontag to talk about risking their lives in support of an idea. After all they lived   fairly high up in New York apartment buildings. It was quite another thing to be a retailer featuring the book at street level. I had to make some really hard decisions about balancing our commitment to freedom of speech against the real threat to the lives of our employees. From the vantage point of street level, this was not such an easy decision.

I had made a second career out of attacking the chain stores in any manner I could find. But when they became the underdog in this melodrama, for the first and last time in my career I took their side. It was a very contrarian position that won me few friends. I’m sure that had Cody’s not been bombed the following week, and had I not become the martyr de jour, I would have taken some heat for this.

I articulated the reasons for this and the reasons that my own feelings had become quite conflicted in a letter I wrote to Susan Sontag on February 19, 10 days before the Cody’s bombing. I’ll quote the letter at some length here.

“I was distressed to read a quote by you in the media… in which you seemed to draw an analogy between the behavior of members of the literary community to the silence of Germans during the 30’s….

“The events of the past week have forced me to make difficult decisions; decisions in which I have had to choose between my most valued ideals of freedom of expression and the need to protect the lives and safety of my employees. Both of these values are absolute and yet, in this case, inconsistent. We are on the horns of a dilemma. To aggressively affirm our commitment to freedom of speech, we risk inflaming further the anger of fanatics. At best we compromise and find a middle ground. We agonize endlessly over whether we should carry the book at all; if so, do we sell it under the counter or display it; if we display it, do we feature it prominently or discretely.…..

“And so we make our decisions without any assurance of their wisdom. Our actions will be judged either cowardly or prudent only in hindsight and only as a result of consequences which are out of our control….

“… Although I personally disagree with the chains’ actions, I find it difficult to pass judgment on them in this instance. Booksellers are the front line shock troops in this struggle as in most censorship issues….We can’t go into hiding, and so we are uniquely vulnerable….It may be that in some situations, caution is required. If, as a result of such caution, lives are saved; then a store’s actions could be deemed not cowardly but prudent. If, as a result of another store’s decision to carry the book, people are harmed; then such actions could be deemed not courageous but foolhardy….”

Susan Sontag never responded to this letter.

The following week,  Cody’s was bombed. I spoke of the fire bombing that occurred at 2 AM. More troubling was that as we were cleaning up in the morning, an undetonated pipe bomb was found rolling around the floor  near the poetry section. Apparently it had been thrown through the window at the same time as the fire bomb. Had the pipe bomb exploded, it would have killed everyone in the store. The building was quickly evacuated. Lawrence Davidson, who discovered the bomb, ran upstairs to warn me to leave the building. If I haven’t told you before, Lawrence, thanks.

As I walked outside, I was met with a phalanx of newsmen. Literally hundreds. Normally I was a shameless panderer for media publicity. At this point I had no desire to speak. And I knew reflexively that public pronouncements under the circumstances were probably imprudent.

We all assembled across the street facing the building, which had been cordoned  by yellow tape.   The police bomb squad entered  to see if they could diffuse the bomb. Apparently they judged it too dangerous to move. They decided to pack it with sand bags and detonate it in the store. We heard the bomb blast and watched as the building shook. I remember thinking that this was unreal. It can’t be happening. Then I started crying. Of course the media vultures loved this and stuck a camera in my face to record the tears rolling down  for the six o’clock media clips.

We all pulled ourselves together and returned to the store. I called a meeting in the café. Jesus, what do you say after you have just watched your store get bombed? It isn’t like we learned how to deal with this situation in ABA booksellers’ school. We had, after all, just witnessed the first act of international terrorism in the United States. And it had been directed against us!

I stood and told the staff that we had a hard decision to make. We needed to decide whether to keep carrying Satanic Verses and risk our lives for what we believed in. Or to take a more cautious approach and compromise our values.  So we took a vote. The staff voted unanimously to keep carrying the book. Tears still come to my eyes when I think of this.   It was the defining moment in my 35 years of bookselling. It was the moment when I realized that bookselling was a dangerous and subversive vocation. Because ideas are powerful weapons. It was also the moment that I realized in a very concrete way that what I had told Susan Sontag was truer and more prophetic  than anything I could have then imagined. I felt  just a tad anxious about carrying that book. I worried about the consequences. I didn’t particularly feel comfortable about being a hero and putting other people’s lives in danger. I didn’t know at that moment whether this was an act of courage or foolhardiness.

But from the clarity of hindsight, I would have to say it was the proudest day of my life.

Several years later, Salman, still undercover, came to the Bay Area. A secret dinner was arranged for him with numerous celebrities, politicians and movie stars. We were honored guests. The next day, Rushdie insisted on paying a visit to Cody’s. We were told that we could not announce the visit until 15 minutes before he arrived.  It was a very emotional meeting. Many tears were shed, and we were touched by his decision to visit us. We showed him the book case that had been charred by the fire bomb. We also showed him the hole in the sheetrock above the information desk that had been created when the pipe bomb was detonated. One of the Cody’s staff, with characteristic irreverence,  had written with a marker next to the damaged sheet rock: “Salman Rushdie Memorial Hole”. Salman shrugged his shoulders and said with his wonderful self-deprecating humor, “well, you know some people get statues, —-and others get holes.”

The Book Deal: Territorial Rights

November 9, 2009

The Book Deal: Territorial Rights

Most people think of book deals as just that: a author gets paid by a publisher to publish his/her book. But it is a little more complicated than that. The book deal is a  negotiation that includes, not just how much the author will get paid, but  also what “subsidiary rights” will be granted to the publisher for exploitation. There are numerous revenue generating opportunities when you write a book. They include: right to license in the English Language in the UK and other English speaking countries, translation rights, audio rights, e-book rights, sale of abridgements, magazine excerpts,  movie/tv/performance rights, merchandise spin-off rights, and many more. All book deals include negotiations of  which of these sub-rights are being granted to the publisher and what will be the revenue split between publisher and author.

Today we will talk about territory rights. These are important deal points and are always negotiated along with advances and royalties. These rights are typically the right to sell a license to a foreign publisher to publish  in another country or another language. Sometimes publishers merely export the existing book and have it distributed in foreign markets. No licensing rights are involved in this situation, but there is still an opportunity to negotiate the royalty on books for export.

In a book deal, territorial rights are always split into at least 3 categories.  These are:

  1) North American English (which includes US, Canada, and usually The Philippines). I’m not sure why the Philippines usually gets thrown in, but it almost always does.

2) English language rights in the remainder of the world, which includes UK, Commonwealth countries or former Commonwealth Countries (Australia, New Zealand, South Africa, sometimes India, etc).

3) Translation rights. Obviously all languages other than English. One of my clients has books translated into 29 languages, some of them he has never heard of.

Publishers usually try to negotiate “world rights”. This is the right to publish or license the publication of books throughout the world. Publishers will usually offer the author 50% split on the income from these rights. That is a good deal for the publisher, but not such a good deal for authors. The work involved in selling these rights is minimal. The income is substantial. If I am negotiating with the publisher, and we have determined to sell them world rights, I try to get the percentages up to 75-80% for the author.

Usually it is more advantageous to reserve as many world rights as possible for the author and have the author (or his agent)  sell them himself.  In this situation, the author gives the right to the publisher only to publish in North America. The remainder of the  rights are retained and sold by the author  throughout the world  with no split going to the US publisher.

As in all aspects of the book deal, the ability to hang on to the foreign rights is dependent on how much leverage you have in negotiation. If you have multiple suitors or are conducting an auction, you can simply make the rule that the only rights being offered are for North America. If you only have a single offer, you may not have a strong say in the matter. Also a publisher may make an offer so generous that it is worth giving them world rights in exchange. And frequently, because of the subject of the book, world rights might be insignificant, and should not play a critical factor in the book deal.

Let’s try to calculate the value of retaining the territorial rights versus selling them to a publisher. In this example, let’s say we have an offer from a UK publisher for $10,000. If your publisher controls the rights to the book, and your contract calls for 50-50 split on the revenue, here is how it breaks out:

UK advance $10,000

 Publisher’s agent commission: $1500

Less publisher’s 50% cut on the right $4250

Author’s Revenue $4250

Less commission to author’s agent $ 637

Net to author $ 3613

This isn’t such a great deal. The author ends up with 36% of the income gained from the sale of the rights. And there will also be a substantial amount withheld for taxes from the foreign government. Another disadvantage is that the income that is due the author by the US publisher will not be paid upon receipt but will be deducted from your advance. You will not see this income (if ever) until far down the road.

Now let’s look at the same situation when you retain your rights.  As an agent, when I negotiate retention of these rights, I receive a slightly higher commission of 20%. The reason for that is that I will have to split my commission with a foreign agent. Most agents do the same, although the amount varies.

.

UK advance                                           $10,000

Revenue due author                             $10,000

Less author agent commission           $2,000

Net to author                                         $8,000

Definitely a much sweeter deal for the author. Don’t forget, you still have the tax withholding to a foreign government. But these tax payments will be credits against your US taxes. So it should be a wash. The other advantage in this situation is that the money will come to you up-front and not be deducted from advances. As we said in a previous blog entry, it is always better to get money sooner rather than later.

There are some other advantages and disadvantages to these respective deals. The advantage of selling world rights to the publisher is simplicity. But also it is possible that the publisher has resources and connections that are not available to you. Perhaps you can make an effort to sell the rights yourself. If unsuccessful, you can always turn them over to the publisher.

But the opposite is also true. It is possible that a small publisher doesn’t have resources to sell the book. And won’t devote the resources that they have to aggressively sell the rights. With a large publisher that has offices world-wide, they might make an inside deal with one of their own subsidiaries with an advance below what the market would offer.

Regardless of who controls the territorial rights, this is an important part of the book deal and potentially a very lucrative source of income for the author.

The Book Deal: Royalties

November 2, 2009

.Almost all publisher contracts pay authors through a system of royalties, a certain defined percentage of revenue based upon sales of the contracted book. The concept is simple, but it can get quite complicated in practice. Let’s talk about the different formulas that publishers use in calculating royalties and how these translate in income for the author.

At the outset, it is worth noting that for the majority of authors who get published by trade publishers, royalties don’t really matter. Most books never earn out their advance, and authors never receive a royalty check.  Big time celebrity agents often like to brag that if a book “earns out” the advance, they haven’t been doing their job. And there is certainly something to be said for this argument. It means that the agent negotiated a sweet deal, and the author ended up with more money than she would have otherwise earned.

We discussed advances last week. We mentioned that advances are just that: advances against royalties. An author will never see a royalty check until the net earnings from royalties exceeds the advances paid. We also had a little fun trying to estimate he total advance on Sarah Palin’s book some hypothetical assumptions.

The royalty rate is negotiated in the “deal points” phase of contract negotiations, before the contract language is worked out.  A typical royalty arrangement for cloth bound books from a major publisher is: 10% (of retail price) on the first 5,000 sold; 12.5% on the next 5000; 15% thereafter. More important authors might be able to sweeten this deal some. But it is unusual. Royalties on trade paperbacks are less and usually start at around 7.5%. They can increase on volume sales.  Remember that these percentages are based on “list price” or “retail price” or “cover price”. All of these terms refer to the price marked on the cover of the book. Thus, if  retailers discount the price of the book to the consumer (as they frequently do), it has no impact on the author’s earned royalty. The recent price wars amongst Amazon, Walmart and Target, in which books are being sold far below their cost as loss leaders, have no impact on the royalties being paid to the authors. 

Some publishers, mostly smaller publishers,  calculate the royalty as a percentage of  the publisher’s net revenue. This is quite a different accounting method than one based on  the retail price. Net revenue will vary from publisher to publisher. But in general, publishers sell books to vendors for 50% less than retail. If your contract calls for royalties based on “net”, then you should be seeing royalty percentages that are double those of those based on retail price.” If you aren’t seeing that, than it is not a very good book deal.

The calculations can get murkier when you consider that almost all publishers have provisions in the contract to reduce author royalties on sales where the publisher has offered unusually large discounts to the retailer. Typical deep discounting language in a contract might be the following:  “When the publisher grants discounts in excess of 50%, author’s royalties shall be half of the royalties otherwise due.”

Hmm. Interesting. So this means that if a publisher sells a book for 51% discount, and receives 1% less than otherwise, the author will have his royalty reduced by 5%. This  doesn’t seem fair—at least, not fair to authors.

A lot of these deep discount deals are for bulk sales to big box stores or special sales to corporations and institutions. The discounts can be as high as 55-60%. So it is probably fair that the author should make some kind of sacrifice.  But wait!  Maybe not. Consider that these high volume sales are shipped to a single location,  packed on skids,  a single invoice to account for, no returns permitted. The publisher is making considerable profit on these bulk sales.

In my humble opinion, these deep discount provisions are entirely one-sided and have the effect of reducing author royalties on transactions that are actually more profitable to publishers. Unfortunately, these provisions are frequently difficult to change in negotiation. I try to define exactly what classes of vendors they apply to and put into the contract that the provision will only apply to sales outside of normal book trade distribution channels. Otherwise, one could find that most of one’s royalties are going to be based on rates offered in the deep discount provisions, not on the negotiated standard royalty rates.

If you ask anyone in publishing, they will tell you that all thought about the future is centered around the role of e-books. The royalty on e-books has moved to the fore and is now an element of the deal point negotiation. As of now, there is not a firm rule of thumb for e-book royalties. I have seen royalties offered anywhere between 15% – 50% of publisher revenue. Random House, the largest trade publisher, has been offering 25%. I suppose that is as good an indicator as anything else of a prevailing practice.

At the moment, e-books account for less than 2% of book sales. But this could change dramatically and quickly in the coming years. Thus a bad royalty on e-books might not mean much money now. But could be substantial as the e-book takes hold of the marketplace.

It seems to me that an author should be entitled to a much larger portion of an e-book sale than of a physical book. After all, publishers have considerably lower costs in manufacturing, distribution, and returns. But the royalties   being offered to authors on e-book sales don’t seem to account for these savings by the publisher.


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