The Economics of Tom Wolfe

Tom Wolfe has left the publisher where he spent his entire career, Farrar, Straus & Giroux, and decamped to Little, Brown instead. Why? Money, of course:

People involved in the negotiations said on Wednesday that Mr. Wolfe’s advance for the new book was close to $7 million.

This deal makes sense for all three parties, since there are two variables at play: money, and prestige.

Wolfe took the highest bid, since his prestige is not particularly enhanced by staying at FSG rather than moving to Little, Brown.

Little, Brown, meanwhile, gets significant added prestige from getting Wolfe on its backlist: "It’s like publishing Mark Twain," publisher Michael Pietsch told the WSJ’s Jeffrey Trachtenberg. If Wolfe’s new novel fails to earn out its advance, that’s OK for Little, Brown, which is an arm of massive French conglomerate Lagardere.

As for Farrar, Straus & Giroux, Wolfe is already on their backlist, and so the marginal benefit that they get from publishing his 17th book is, well, marginal.

And then of course there’s the whole issue of self-regard among publishing houses: Little, Brown undoubtedly thinks that they can sell Wolfe better than FSG can. Indeed, they say so right in their press release, as quoted by Galleycat:

Just in case you missed the point, the release also quotes Hachette Book Group CEO David Young: "I am thrilled to bring the many assets of the Hachette Book Group, publishers of great literary fiction and of enormous bestsellers, to bear in helping Tom Wolfe find the biggest readership of his already extraordinary career."

I’d normally bet on the winner’s curse being at play here: if Little, Brown won a very competitive auction, then one could assume that they overpaid. But in this case I don’t think the auction was very competitive, since Wolfe is following his editor Pat Strachan, and Molly Stern, editorial director of fiction at Viking Penguin, told the NYT that she would have liked the chance to bid on the book. So it’s actually possible that everybody could be a winner in this particular deal.

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