A publishing-industry insider emails:
From what I’ve read of the lawsuit online, at least one of the main points made by the authors is silly; another, misleading.
The silly one is the implicit claim that the authors would be deprived of their ordinary royalties only because of the sweetheart deal between Regnery’s publishing division and book club. In fact, every reputable trade publisher distinguishes between royalties offered to authors for ordinary sales and those that apply to books that must be heavily discounted to clubs and elsewhere. To give one example, authors routinely make only 50% of their ordinary royalty on sales to channels where the publisher has to offer outlandish discounts to the vendor. These include any book clubs (owned by the publisher or not) as well as deals that persuade Barnes & Noble and other major chains to put the books on their New Release tables. (Does anyone really think they do that just because a buyer somewhere closely read the bound galley and wept with pleasure? It’s all about co-op dollars.) In many such cases, the publisher is losing money on every book sold. It’s hardly an injustice that the royalty for those units would go down.
The misleading point is the idea that the authors aren’t, on balance, profiting even when some copies of their books bring in less money per unit sold. You are spot-on when you write: “I've had several in-the-know D.C. types explain to me over the years that if you're writing a conservative political book for the money, rather than the prestige (or the careful editing), you should do it through Regnery because their book club links - as well as their connections to the talk radio outlets that can help pump up a right-wing book's sales - enable them to more or less create best-sellers at will, in a way that other conservative imprints just can't match.” Exactly. Until recently, Regnery distributed nationally through the distributor we use, and I’ve heard their sales pitches to the national sales force before. They were jaw-dropping. When it comes to media predictions months in advance, most publishers can only say where they’ll attempt to place a book based on the publicist they hired or the author’s or publisher’s best guesses; because of their influence within their niche, Regnery was able to report a long list of confirmed hits, such as Drudge or Hannity and Colmes, sometimes even before the books were written. (It should go without saying that every marketing dept. would love such security.) Their book club was an important component of these guaranteed channels.
Still, even if Regnery deliberately funneled sales into the book club (and I have no idea whether or not they did), it doesn’t follow that the authors suffered financially, because this isn’t a zero-sum situation. If you increase the sales through a book club, it would only detract from sales elsewhere if the buying audience was a fixed number. But of course, it isn’t a fixed number: there are many people who might in theory buy a particular book but often don’t. Getting a book strongly into one channel (book club or other) can strongly help the sales of the book in other channels. This is most obviously true with word-of-mouth (which was, to be sure, not Regnery’s strongest weapon). If you buy a book and I see it on your table when I’m over for dinner, then ask you about it and decide to order it myself, I’m probably not going to order it through the same channel. In fact, it’s unlikely you’ll have even mentioned how you acquired it. These things ripple easily across sales channels. Which is why the idea of a book club hurting sales seems implausible – if sales were low there, the authors can’t claim that buyers were pulled away from other venues; if sales were high, it seems just as likely that this got the book out into people’s hands and desks, increasing visibility in a way an ad never could.