Not long after U.S. Airways Captain Chesley "Sully" Sullenberger dramatically landed Flight 1549 in the Hudson River, his memoir sold at auction to publishing house William Morrow for between $2.5 million and $3.2 million. In another auction, Tina Fey's book of humorous essays went from $5.5 million to $6 million, while former President Jimmy Carter's White House diaries sold for "around $1 million" according to underbidders.
To those outside the publishing industry, numbers like these suggest that book auctions are as rare as a solar eclipse. In fact, they're more like beautiful sunrises -- always nice to see, but occurring with remarkable regularity. For a book to go to auction, all that's required is for two or more publishers to want to purchase it.
Scott Hoffman, one of the founding partners of Folio Literary Management, explains why book auctions take place on a daily basis: "Publishers continue to put more and more emphasis on what an author brings to the table in terms of marketing ability. As a result, big-platform clients are in increasingly high demand, and often attract offers from multiple publishers."
Auctions are much more common for nonfiction projects than for fiction. Says Hoffman: "The decision to publish nonfiction is a more left-brain, numbers-driven process than the decision to publish novels, which are largely based on personal taste and the very subjective concept of artistic merit."
How Book Auctions Work
"Book auctions always create excitement because an auction means that more than one editor loves the project," says Kristin Nelson, of the Nelson Literary Agency. However, just because a book goes to auction doesn't mean it will sell for a large amount; as Nelson notes, "I've certainly held auctions for multi-book projects that have gone for seven figures. I've also had auctions where the sum didn't quite reach six figures. It all depends on the level of enthusiasm from the publishing houses."
When a project goes to auction, agents select a convenient date for all involved and establish the rules. Most auctions are conducted as round-robins by the agent. After the initial bids are received from interested editors by phone, fax, or e-mail, the lowest bidder is given the opportunity to outbid the highest. Then it's the next-lowest bidder's turn, and the auction proceeds in this manner until one bid stands and the auction ends.
"The round-robin format tends to work best when there are three or more editors involved," says Nelson. "If the agent is concerned that only two editors will show, it's usually best to go the route of best bids." In this scenario, editors submit their most attractive offers up front, which can include not only advances, but generous marketing packages and other perks. If the differences between offers are slight, a best bids auction might go to a second round, but generally, this type of auction finishes relatively quickly.
Occasionally, one publisher is so eager to acquire a project, it'll make a preemptive offer in the hope of taking the project off the table. If the offer is considerably more attractive than any others, after a minimal amount of negotiating, the deal will be closed without an auction taking place.
"Auctions tend to unfold quickly," says Nelson. "Editors let the agent know they're taking the project for second reads or to the editorial board within a week or so of receiving the manuscript."
Prior to the auction, the author will talk with each interested editor by phone. Marie Lu, a Nelson Agency client whose young adult dystopian trilogy sold last fall for upwards of $500,000 according to the Publishers Marketplace reporting code, says the pre-auction phone calls "may have been the most exciting part of the process... To hear industry professionals rave about your manuscript is amazing." For authors, the time before an auction is also a period of intense anxiety. Says Lu: "I alternated every few minutes between absolute joy and sheer, abject terror."
As the auction unfolds, the agent calls the author with updates, but for the most part, there's nothing for the author to do but wait until the bidding is over -- sometimes hours, sometimes days. At that point, the agent reports in with the results, and the author makes the final decision.
Why Overbidding Is Bad
Somewhat surprisingly, the publisher that the author selects isn't always the one that puts the most money on the table. "We always reserve the right to consider all factors, not just the amount of the advance, in case the author wants to go with a certain editor rather than with the highest bidder," says Nelson. Deciding factors include a better marketing campaign for the book, whether or not the publisher envisions the book as a lead title, the publisher's level of enthusiasm and commitment for the project, royalty rates and which subrights will be included in the deal.
Occasionally, publishers get caught up in the excitement of the auction process and overbid. While this scenario might seem like a happy outcome for the lucky author, if a book sells for too high a price, it risks being labeled within the publishing house as the book for which the publisher overpaid. When that happens, the book may be written off as a loss even before it's published, making it much more difficult for the editor who acquired the project to generate enthusiasm for the book from the sales and marketing teams.
Fortunately, such instances are rare. "For the author," says Nelson, "an auction is the best of all worlds. A bit nerve-wracking while it unfolds, but in the end, they will be with a house and an editor who is wild about his or her book."