Poker players will tell you that there’s a sucker at every table. If in the first few minutes you can’t figure out who the sucker is, you are the sucker.

This is important to know because life is a gamble and nobody can revoke the laws of statistics. (Not that I know a hell of a lot about the laws of statistics; I was an English major, for cryin’ out loud; but stick with me on this.) We can’t change the odds. All we can do is attempt to adjust the allocation of risk, and we all do this whenever we can, even if we don’t think of it that way. To wit:

  • The ball falls into the well and we turn to our friend and say, “You get it.”
  • We let our acquaintances be the early users of technology before making the investment ourselves.
  • When the dinner check comes, we wait to see whether anyone else will reach to pick it up.

Notice that in all three of these examples someone did end up taking the risk, may have volunteered to take it, or even enjoyed taking it. But without arguing too much about the nuances of all this (and there are indeed nuances), perhaps you will grant me the following nearly universal truth:

Fishman’s Law

Everyone on earth will accept a bet where they reap the rewards but someone else takes the chance.

If you want living proof, please consult everything Wall Street bankers have done in the past ten years. Given the opportunity, they’ve privatized gain and socialized risk. But I digress.

In the book business, an undercurrent of resentment has brewed for some time between authors and publishers. Publishers argue that they add more value to the equation than authors sometimes give them credit for. Authors argue that publishers often don’t deliver on their promises and offer poor financial terms, to boot. At bottom, in my opinion, most of these arguments are really about the allocation of risk.

There was a time when getting a single book into the marketplace required an investment of hundreds of thousands of dollars. That time dovetailed with the rise of bookstore chains and the advent of the mass-market hardcover, which enabled publishers to pay large advances for books they really wanted. But the tables have turned.

Today, with the exception of a relative handful of brand-name authors, book advances have fallen through the floor. (I was recently talking to an executive editor who departed a few months ago from a major house, and he said he’d participated in an editorial meeting where the leadership team openly applauded its success in bringing down author advances.) Publishers — whose incentives are supposedly aligned with authors — will stop supporting a book that they perceive isn’t working faster than you can say, “Did you even send a copy to Publishers Weekly?” And, at the same time, the advent of new technology has reduced the investment required to create and publish a book. If the book is e-book only, in fact, that investment may be as low as four figures.

Yet royalty terms, though they’ve changed a wee bit in some instances, remain largely the same as they were before this great shift.

There will always be authors who don’t interest publishers for whatever reason and there will always be former authors whom a publisher is happy to see going. But if publishers wonder why some authors they’ve published with relative success are still choosing to leave, they may do well to ask themselves whether the risk-reward equation was properly balanced.

Authors, for their part, should ever be applying the following analysis to prospective deals: Is the publisher taking enough risk to justify the share of my work they’re claiming on the back end?

If a conventional publisher offers you a great deal of money up front and a crappy royalty, you probably should take the money and let the publisher assume the risk. But when both the advance and royalty are low, you, dear author, may be the sucker at the table. Wave to the dealer, stand up, and find another game.

Last week: Publishing Primacy — Folio 13: Six Ways the Book Trade Still Matters

Next week: Publishing Primacy — Folio 15: The Publicity Dilemma, a Q & A

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J.E. Fishman, a former Big Six book editor and former literary agent, is author of the thriller Primacy, which Publishers Weekly called "appealing" and Kirkus called "good, boisterous fun." His mystery novel, Cadaver Blues, was serialized in 2010 on TNB and you can still find it here if you dig deep enough. It's now available in ebook and paperback. His financial thriller, The Dark Pool, was published this year, and his new series of police thrillers, Bomb Squad NYC, will be published in February 2014. He blogs here and at the Huffington Post. Please visit and follow him at his very fancy and expensive official author website.

7 responses to “Publishing Primacy — Folio 14: Who Stuck His Neck Out?”

  1. Don Mitchell says:

    When I took a Decision Theory course back in the sixties (which means I’m operating from some old memories here) I learned how to construct strategies for minimizing risk, maximizing rewards, and so on — pretty much the kind of thing you’re talking about, Joel.

    You have to be able to assign some numeric values to risks and rewards. But I know you’re not really advising writers to go get a decision theory text and work it out.

    The strategy I thought the most interesting is one you haven’t written about, so far as I can tell. It was described as “minimizing regrets,” as I remember. The strategy — remember, you have to be able to assign numeric values to the possible outcomes — was designed to minimize your regrets for having made the wrong decision.

    As a college student, I totally fell in love with the concept of quantifying wrong-decision regrets and going from there. I liked it better than maximizing rewards or minimizing risk.

    So Joel — can you think of a publishing strategy that’s something like minimizing regrets?

    • J.E. Fishman says:

      It so happens that I have a precise formula for minimizing regrets. Two parts rye whiskey, one part dry vermouth, dash of Angostura bitters. It’s called a dry Manhattan. I prefer mine on the rocks.

  2. I wish I have read your article on this. I tend to be the biggest sucker at the table, even throwing down bets when it was not even my turn to play the cards which is why I get kicked out of poker games for my own good. (Beside the previous player finds it annoying when I tossed in an extra chip on the top of his at the table before it was my turn to play.) My behavior was the same way when it comes to self publishing.

    I wish I have taken a class on minimizing the damages that my reckless decisions making lead me to.

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