The perils of publishing are by now well documented. Net sales of adult hardcover books, as measured in dollars, fell by 5.6 percent from 1994 to 1995, 4.4 percent from 1995 to 1996, and 4.8 percent in the first ten months of 1997, according to statistics from the Association of American Publishers. Unpaid returns, again in terms of dollars, stood at 35.9 percent in 1996.
Few publishing houses escaped the implications. HarperCollins canceled the contracts of 106 authors last June and two months later announced a write-off of $270 million. Simon & Schuster, Random House, and Penguin Putnam all wrote off huge losses in 1996. Ultimately, HarperCollins decided to shutter Basic Books, an imprint esteemed for publishing scholars from Sigmund Freud to Stephen Carter, and Addison Wesley downsized the trade-publishing operation that had broken out such authors as Melissa Fay Greene (Praying For Sheetrock), H. G. Bissinger (Friday Night Lights), and Robert Bly (Iron John).
Against such odds, Pearl still expects to make a profit, but without the reliance on blockbusters that has undermined so many larger publishers. Instead, Perseus will depend on disciplined spending and lean staffing. Drawing on models as varied as small-press collectives and the Random House behemoth, it will provide a single back office to serve its various imprints while outsourcing such tasks as design and legal representation. And it doesnt hurt that the chill among larger publishers is driving down the advances for important authors into Perseuss modest range, which runs roughly from $7,500 to $250,000.
Even potential competitors of Frank Pearl and Perseus Books applaud his effort. Its a brilliant idea, and its healthy for the business, says William Patrick, the senior executive editor for Henry Holt and formerly the editorial director of the general-books division at Addison Wesley. Pearl and Perseus are the smart people who see that if the conglomerates are pruning off these worthy branches, then, hell, we can grab them, collect them, replant them, and make them grow under a different roof.
During a celebration of the National Gallery of Arts fiftieth anniversary in 1991, its senior curator of paintings, Charles Moffett, found himself admiring the same Italian canvas as a man he faintly knew from other gallery events, Frank Pearl. As they talked for the first time, Pearl exhibited such knowledge that Moffett thought him as well-versed as an art historian. Before separating from the curator, Pearl mentioned his interest in someday publishing art books.
Moffett remembered that comment a year later, when he became director of the Phillips Collection, a small and prestigious art museum in the capital. The Phillips had assembled all 60 paintings in the black artist Jacob Lawrences Migration Series for the first time in decades and was preparing to send its exhibit across the country. Mr. Pearl, Moffett told him on the phone, I think weve got a project that might interest you.
If Moffett had merely been seeking a financier, he could not have chosen better. After taking his law degree from American University in 1969, Pearl had made millions first as a commercial lawyer with Lane and Edson, representing Washingtons wealthy Cafritz family, and then as a partner in the investment firm Wesray, with former Treasury secretary William Simon. Wesray essentially launched the LBO craze with its 1982 purchase of Gibson Greetings -- having put just $1 million of its own cash into the $80 million acquisition, Wesray took Gibson public sixteen months later for $290 million -- and netted a $750 million profit in the 1986 LBO of Avis.
Pearl retired in 1988 and spent a year sailing around the world with his wife in their 92-foot sloop. Upon returning to Washington, he devoted much of the next four years to volunteer work, endowing everything from cancer research to meals for the homeless to college scholarships for poor children through a foundation he named for his grandmother Jennie Zoline.
But Moffett was right in thinking that Pearl was more than a checkbook with a conscience. Pearls passion for the arts can be traced back to his childhood in Chicago, when his middle-class parents treated him to painting classes at the Art Institute and tickets for the Lyric Opera and Chicago Symphony Orchestra. His adult tastes ranged from Italian and Northern Renaissance oils to Vaughan Williams compositions to the blues of Mose Allison. He endowed a piano scholarship at Washingtons Duke Ellington School for the Arts in the name of another favorite, jazz musician Michel Camilo. And in the years to come, as a Kennedy Center trustee, he would immerse himself in projects as disparate as restoring the concert hall and reorganizing the symphony.
Still, not even Moffett may have realized that Pearl was treating the prospective book on Jacob Lawrence as his firsthand education in publishing. By himself or with the staff of his new investment company, Rappahannock, Pearl debriefed experts in distribution, formulated financial projections, and recruited a respected Knopf editor, Susan Ralston, to serve as managing editor.
He took an active interest in all aspects, Moffett recalls. Design, choice of typeface, color separations, bids from binders. He was thoroughly versed in all the details.
When we were sitting around the table with lunch sent in, hed ask me questions about the book business, says Ralston. About the difference between keeping a book alive in hardcover and keeping it alive in trade paper. About the effect of chains. And this was more than four years ago. He felt that if sound business principles were applied to trade publishing, it could work. And I certainly didnt disagree.
The resulting book, Jacob Lawrence: The Migration Series, qualified as a success in all the familiar ways, earning favorable reviews and selling out its first printing. More than that, though, it enticed Pearl more deeply into publishing. And it introduced him to a valued associate for the future.