Wall Street Crash Triggers Opus Glut at Penguin

From the outside, it looked like a colossal failure of management: a case of crossed wires, perhaps, or the result

From the outside, it looked like a colossal failure of management: a case of crossed wires, perhaps, or the result of overpowering pressures combining with such force that the people in charge had no option but to do what they did.

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What else could explain Susan Peterson Kennedy’s decision last week to allow three of the biggest imprints under her jurisdiction at Penguin Group USA to sign up books on the same exact topic in the span of just 48 hours?

That topic, of course, was the crisis on Wall Street—a crisis that apparently did not discourage Ms. Kennedy, Penguin’s president, from green-lighting an extraordinary shopping spree that left many in the industry scratching their heads and that is estimated to have cost the company more than $2 million.

About 700,000 of those simoleons are going to The New York Times’ financial reporter Andrew Ross Sorkin, who sold his book, a Woodward-style inside account of the meltdown on Wall Street called Too Big to Fail, to Viking on Thursday afternoon after an auction involving at least three other houses. That same afternoon, Mr. Sorkin’s neighbor in the Times newsroom, Joe Nocera, together with Vanity Fair contributing editor Bethany McLean, sold a book on the banking crisis to Penguin’s business imprint, Portfolio, for what several sources said was a few bits north of a million dollars.

And the day before, Ann Godoff at the Penguin Press announced that New York Times Magazine contributor Roger Lowenstein, whom she has been publishing for years, had signed on to write a book called Six Days That Shook the World, which would chronicle the week when Lehman Brothers declared bankruptcy, Merrill Lynch sold itself to Bank of America and insurance giant AIG was bailed out by the federal government.

How will Penguin publish three titles that will so obviously compete for the same readers? More to the point, does Ms. Kennedy really think the demand for these books will be high enough that each of them will sell well enough to justify the amount of money Penguin shelled out for all of them? Is this as safe an investment as a savings bond? Or as risky as a subprime mortgage?

“I was just baffled as to how it could have happened,” said a publisher at a rival house, echoing sentiments that Pub Crawl heard from many other similarly well-placed sources. “To have two [books] is understandable, though strange, but to have three is completely absurd.”

According to Ms. Kennedy, though, acquiring all three titles was a deliberate strategy—an attempt to snag all the best financial reporters in the country and thus corner the market on a topic she expects will captivate readers for years to come. 

“I knew about all three books before we committed to the first one,” Ms. Kennedy said in an e-mail. “I would rather be publishing all three of the best books on the economic crisis than to be competing against any one of them at another house. … While the skepticism I’m hearing from some might have a bit of validity if all three books came out on the exact same day, the reality is they won’t.”

So when, then? At this point, given that the story these books will chronicle is still very much unfolding, it is impossible to say, though Mr. Nocera and Ms. McLean have vocally staked out at a spot in the end zone, and are planning to publish sometime in 2010.

As for Mr. Lowenstein and Mr. Sorkin, both of whom expect to have their books out before that, the race is on—though don’t expect anyone to admit that being first out of the gate is an automatic advantage. 

According to Ms. Kennedy, whose book comes out first will depend on who finishes first. In her words, “the order of publication will depend on when the authors, their editors and their publishers feel that the work is truly complete.”

Mr. Sorkin’s agent, David McCormick, echoed Ms. Kennedy’s “wait and see” attitude, but betrayed an unmistakable intention to try to get his client’s book out before Mr. Lowenstein’s.

“As far as we’re concerned, that’s an issue that still needs to be resolved, what order the books are published in, but no one’s going to have a better inside account than Andrew and hopefully that will be taken into consideration,” he said. “I want him to write a classic book and I think he can, but I also think he should do it in as timely [a way] as he can. I expect that’s what the others want to do as well.”

So will Mr. Sorkin and Mr. Lowenstein try to coordinate their projects? Or perhaps work out who’s doing what when so as to avoid any unproductive tension now that they’re playing for the same team?

“I only know Roger by reading his books. I’ve never met him—I’m sort of an admirer from afar—but to the extent that I have the opportunity to talk to him about what he’s thinking about and what I’m thinking about, that might be helpful,” Mr. Sorkin said in an interview yesterday. He added, though, that “it might be dangerous” because “ostensibly the books may compete.”

Clare Ferraro, president of Viking, which is publishing the Sorkin book, said she has reached out to Ms. Godoff at the Penguin Press to discuss timing.

“She said she doesn’t know, and I said I don’t know, either,” Ms. Ferraro said. “We’ve all had conversations with our authors about when they think they’re going to deliver, and they all get this frantic look on their faces and say, you know, ‘Well, we’ll try for this date or that date, but who really knows!’”

Mr. Sorkin, for his part, said he initially had some concerns about having all three titles come from the same publisher, but has since come around to Ms. Kennedy’s point of view.

If all three were being published by competing houses, he said, “you would have no transparency because if everything’s going the way it’s supposed to, you have no idea what everybody else is doing, when the books are coming out, how they’re going to be focused.”

Of course, there’s no reason to think the proposals that circulated last week are anything but the beginning of a long stream of financial crisis books, which means that unless the publishers under Ms. Kennedy just keep buying every single one the way they did last week, Penguin will have to face competition from outside.

“I think there will be plenty more,” said Ms. Ferraro, noting that while the business desk at the New York Times might be exhausted, she expects before too long to start seeing proposals from reporters at The Washington Post and The Wall Street Journal.

In light of this, some skeptics maintain that having three books on the same topic is an unwise risk for a publisher to take, because in all likelihood, one will do much better than the others and consequently suffocate them.

“It’s a very high-risk strategy,” said the publisher quoted earlier. “Even if you are spacing them out over a period of time, how many big books do you think the market can take, especially when we’re living under a welter of daily, hourly, minute-by-minute news breaks with many of these guys filing every morning anyway?”

Not to mention the fact that the subject is depressing to say the least. And a year or two from now, will the public, whose investments and retirement savings will hopefully have recovered, really want to revisit this dark, dark hour?

Ms. Kennedy clearly believes so. Indeed, the ravenous appetite she demonstrated for these kind of books last week arguably amounts to a triple-down bet that the current crisis will get a lot worse before it gets better.

“This moment, this story is larger than any one writer,” Ms. Kennedy said. “It affects Wall Street, Main Street and Streets all over the world. And it is continuing to unfold every day. I want more than one version, more than one point of view, and so do many others.”

Wall Street Crash Triggers Opus Glut at Penguin