Viacom, Stephen King Reach a Novel Agreement

Stephen King’s novels have sent a shiver up readers’ spines for more than 20 years. His new book deal may have a similar effect on publishers.

Viacom Inc.-owned Simon & Schuster said Thursday that it had struck an unprecedented deal with King, whereby he will take a smaller-than-expected advance in exchange for sharing half the profit generated by his next three books.

King had reportedly been seeking an advance of as much as $20 million when he recently parted ways with Viking Penguin, his publisher of two decades. Warner Books Inc. and William Morrow & Co. were in serious discussions, according to sources, but neither would pony up that much money.

Simon & Schuster, owned by the same media company that controls Paramount Pictures, is comparing the King deal to that being struck by movie studios with top stars. In those cases, the studios give up some potential profits on pictures in exchange for having to spend less money up front.

Sources said Simon & Schuster agreed to pay King less than $8 million in advance, which is still large by publishing industry standards.

But the King deal is unprecedented in the publishing world, industry observers say.

“I’ve never heard of a deal like this, where an author gets 50% of the profits,” said Bonnie Nadell, vice president of the Frederick Hill Associates literary agency in Los Angeles.

Nadell added that for Simon & Schuster, though, the deal is an important one.

“Simon & Schuster really needs name-brand fiction badly,” she said. Currently, Mary Higgins Clark is Simon & Schuster’s only fiction author that approaches King’s level.

New Simon & Schuster publisher David Rosenthal, who just moved over from Villard Books, may also have seen the deal as a way to make an immediate splash.

It comes at a high price for Simon & Schuster, though: Publishers traditionally work on only 4% to 5% profit margins. Reduce that by half, and the company stands to make very little on the three King books. What it may hope to gain in return is credibility in the industry and among agents who no longer bother sending fiction to the publishing house.

More than 225 million copies of King’s 38 books are in print. Lately, sales have been off a bit, prompting some to wonder whether he’s lost the touch first evidenced in “Carrie.” King’s next novel will be “Bag of Bones,” a thriller that will come out by early fall, followed by a collection of short stories and a nonfiction book.