When an agent has a client who is wanting to shop for the best deal available from publishers or if there is a particular project that is bound to garner significant interest from more than one publisher, the agent can hold what it called an auction. Or if a project attracts mulitple offers from different publishers a “bidding war” can ensue.
This word “auction” is tossed about in a way that it begs for a bit of definition or explanation. There are different kinds of auctions in publishing and they can go by different names. But first let’s describe what they are not.
Publishing Auctions are Not like a Charity Event or Sothbey’s
Many of us have been at a charity event where there is a “Silent Auction” with an item displayed and a piece of paper where you are supposed to put down your name and your bid. The next person coming to the table sees your bid and can put down a larger number. It is “silent” because there is no moderator guiding the process.
At a high-end place like Sothbey’s there can be a room of bidders and an auctioneer who asks for bids with the highest bidder receiving a loud knock of the gavel and the exclaimation, “Sold! To the lady in red.” (At least this is how we’ve seen it done in the movies, right?)
This is not how publishing auctions work, though there are similarities.
The Formal Auction
In a case where there needs to be a formal auction the agent sets up the rules of engagement and asks that each publisher abide by those terms. There are a number of ways to manage a formal auction. Let me describe two methods…and please realize these are only two methods and are not always done like this. This is for educational purposes only. Don’t expect your next book to be handled this way!
In a “rolling” auction the publishers submit their initial bids by a certain date. The bids from each publisher detail the advance dollars, the royalty rates, and the number of books, in the case of a multi-book opportunity (you might have proposed three but they are only bidding on two). The publishers do not know who the other bidders are. The agent then contacts the lowest bidder and gives them the opportunity to top the highest offer. That publisher can choose to make the jump to the top, increase the offer modestly, or stand firm.
The next lowest publisher is then given the opportunity and so on. The process continues until there is one left standing.
Another type of auction is similar to the “rolling” auction but is done in “rounds” like a round-robin (Click through to find this type of auction described in a real estate situation).
One time the process started with nine publishers putting an offer on the table, but in order to simplify things the agent set a threshold or floor for advance dollars. Those who were willing to exceed that number went to the next round. Eventually there were two publishers and they went back and forth in the final round until a winner was declared.
The key to a successful formal auction is the rules of engagement set out in the beginning. That keeps the playing field even for all participants. Unfortunately I’ve been told stories of agents who broke their own auction rules and angered multiple publishers. Our agency will never do that. Integrity in business is of great import to us.
The Informal Auction or Bidding War
When two or more publishers have indicated interest in a project with an offer the agent and author discuss the offers and develop a strategy for dealing with the multiple publishers. I technically do not call this an “auction.” Instead I prefer to call it a “bidding war.” This process relies heavily on the relationship the agent has with the various publishers. It isn’t a formal process like we discussed above. It must be handled carefully to keep the playing field fair for each publisher. Instead of specified rules, it becomes a type of multiple party negotiations.
Earlier this year I oversaw a bidding war with three publishers. Each presented a compelling case. Each made significant offers initially. Each increased their initial offer once they knew there were other publishers interested. In the end it wasn’t only the dollars that won the bid. The winning publisher had flown two editors to that author’s home for a face-to-face visit. And they also set up a meeting with their marketing director to talk with the author. And their monetary offer included a multi-page marketing plan.
I know of another situation, not from our agency, where the initial offers from the publishers were significant. The agent then circumvented the entire “bidding” process by saying, “The first one to $800,000 wins.” Each publisher went into their huddles and one made a quick phone call and said “Deal!”
I once had a situation where five publishers wanted the same non-fiction book. Each publisher’s offer was almost identical in money and royalties. But each publisher wanted the author to change the book in a specific way. No two ways were alike! In this case the author had to decide which publisher’s vision for the book was nearest to their own vision.
The Best Bid Format
One common method of handing multiple offers is to give each publisher one more chance to put their “best bid” or “best offer” on the table. The challenge for the publisher is that they are usually bidding blind, not knowing where their offer ranks against the others on the table. I remember one situation, many years ago, where we used the Best Bid method.
In the first round each publisher’s offer was nearly identical per book. In other words it was very close. So we went to the Best Bid format. Publisher number one stayed with their original offer. Publisher two increased their offer by 20%. Publisher three increased their offer by 125%. You can guess which offer the author chose.
It Can Be Emotionally Taxing for Everyone
The editors and publishers are highly motivated to “win” the bid. The author can be overwhelmed by it all, especially if it is the first time they have gone through the process. It can be both exhilarating to have publishers “fighting over you” but at the same time it is stressful. Sometimes the process can take weeks before all the final offers are on the table. Each move or counter-move accelerates the tension or anticipation.
Ultimately you, the author, chooses the best situation for you. And it isn’t always the one who put the most money on the table. It is the publisher you feel can do the best job for your project. It can happen where the offers are so close that non-monetary intangibles will weigh into the decision.
One Last Caveat
This blog by no means is an exhaustive or comprehensive description of what happens when multiple publishers have interest in you. Each situation takes its own specific approach, the one that is best for your project. Look to your agent for advice and strategy.
Publishing A-Z series:
A is for Agent
A is for Advance
A is for Auction
B is for Buy Back
C is for non-Compete
D is for Dispute Resolution
E is for Editor
F is for Foreign Rights
G is for Great
H is for Hybrid
I is for Indemnification
I is for ISBN
J is for Just-in-Time
L is for Libel