It's not every exec who turns to his 8-year-old daughter for advice. But that's what publisher Nigel Newton did when he received a manuscript from an unknown children's author in 1997. The founder of Bloomsbury Publishing PLC handed Alice a sheaf of papers and asked her to read them. "She came down from her room an hour later glowing, saying: 'Dad, this is so much better than anything else,"' says the 49-year-old Newton.
One of Newton's favorite maxims is "out of uncertainty comes discovery." But the chairman and chief executive of Bloomsbury had no inkling what a gold mine he had discovered when he offered J.K. Rowling a ?2,500 advance ($4,700 at the current rate) for her first Harry Potter book. In fact, Harry Potter and the Philosopher's Stone, and its four successors went on to earn more money within the next decade than just about any book except the Bible. "We hit it lucky," says Newton, whose accent hardly betrays his California upbringing.
How lucky? On July 16, Bloomsbury will publish the sixth "HP," as the books are known in the industry. How much Harry Potter and the Half-Blood Prince will add to the 260 million Potter books sold worldwide so far is anyone's guess. But one analyst is betting that Bloomsbury's profits will jump 23% this year, to $38 million, on sales of $188 million. Its shares have soared 42% in the past 12 months in anticipation of another best-seller.
Is there life after HP? That's the question dogging Newton now. Rowling has already said that she will retire Harry after book seven. To prepare for that eventuality, Newton is pumping some of his HP windfall into acquisitions. In 2004 he paid $6.4 million for Walker & Co., a New York publisher with a solid list of children's titles, and the year before that he snapped up Berlin Verlag, the German publisher of prize-winning authors such as Nadine Gordimer and Richard Ford. With a presence in two of the world's top publishing markets, Bloomsbury will no longer need to license the foreign rights to some of its top-selling titles. (Scholastic Inc. (SCHL) retains the U.S. rights to the Harry Potter books.) "It increases the return to us by a factor of four," says Newton, who started as an assistant to the sales director at Macmillan Publishers Ltd. in 1979.
The tall, bespectacled Newton will spend July 16 watching first-day sales, hoping to beat the all-time record set by HP5, Harry Potter and the Order of the Phoenix. As always, secrecy will be key. One U.S. bookseller who dared to leak HP5's plot to a newspaper on the eve of publication was condemned to a future of delayed deliveries. "The marketing of Harry Potter has been based on protecting our story in advance so that children can discover it for themselves," says Newton. Even Alice, now 16, will have to wait until publication day to learn of Harry's latest adventures, along with the rest of us Muggles.
By John Lawless