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Literary Agent

Real-Life Activities

Real-Life Math -- Solution

Deal 1. Moonstone Publishing

First, the books:

Royalties = $5.5 million + $7 million + ($7 million x 3)
Royalties = $5.5 million + $7 million + $21 million
Royalties = $33.5 million

Add in the movie rights:

$1 million x 5 = $5 million

And the audio percentage:

$24 million x 0.10 = $2.4 million

Add it all up:

Total = $33.5 million + $5 million + 2.4 million
Total = $40.9 million

Deal 2. W and R Entertainment Industries Inc.

Books:

5 x $6 million = $30 million

Movie rights:

Rights =($60 million x 0.10) x 2
Rights = $6 million x 2
Rights = $12 million

Paperback percentage:

$120 million x 0.05 = $6 million

Add all those up:

Total = $30 million + $12 million + $6 million
Total = $48 million

Deal 3. Big Deal Books

Books:

5 x $2.5 million = $12.5 million

Paperback percentage:

$120 million x 0.05 = $6 million

Overseas publishing fees:

Fees = ($8 million x 0.05) x 5
Fees = $400,000 x 5
Fees = $2 million

Movie rights

Rights = ($60 million x 0.15) x 2
Rights = $9 million x 2
Rights = $18 million

Total = $12.5 million + $6 million + $2 million + $18 million
Total = $38.5 million

Deal 2 is the most lucrative for your client. What is your cut?

$48 million x 0.15 = $7.2 million

Your percentage of the deal works out to be $7.2 million.

Most agents deal with much smaller numbers -- but the principle remains the same. Deals come in all shapes and sizes, with royalties and advances and all kinds of things to factor in.