Times Staff Writer

In 1979, literary agent Martin Bauer passed on an offer that seemed too good to refuse.

United Artists was willing to pay $1.5 million for the movie rights to "Thy Neighbor's Wife," Gay Talese's treatise on sex in America. Bauer turned UA down, figuring he could get even more. He was right. In the end, UA coughed up a record-setting $2.5 million. Incredibly, no movie was ever made from the book.

Seven years later, the book business has undergone a chapter and verse metamorphosis.

A few months ago, Bauer put the movie rights on the block to "Family Business," a well-received crime story by Vincent Patrick ("The Pope of Greenwich Village"). The book landed excellent reviews and a number of big-name actors and directors expressed interest. In the end, producer Larry Gordon optioned the movie rights for 12 months for just $50,000 (plus an additional $200,000 if the movie is made, according to industry sources)--well below Bauer's expectations. Bauer refused to confirm the specific price. "It didn't bring nearly what I thought it would fetch in the marketplace," Bauer said. "It wasn't even close to what we would have gotten five years ago."

The difficulty Bauer encountered on "Family Business" was no isolated case. The "book-to-movie market" has unraveled. Studios are buying fewer best sellers and paying a lot less for the ones they do purchase. While prices continue to soar for actors and directors, this is the one area of the movie business where deflation reigns.

There are exceptions--Warner Bros. recently purchased first-time author Harry F. Saint's "Memoirs of an Invisible Man" for Chevy Chase for $1.35 million. But the seven-figure deals of the past are rare today.

"The market is flat," said a frustrated Bauer, partner of the Bauer-Benedek agency. "It's just not there anymore."

Why the buying slowdown? Some of the more celebrated sales--including Peter Benchley's "The Island" ($2.1 million, 1980); Carol Longmeyer's "Four Hundred!" ($1 million, 1983), and "Thy Neighbor's Wife"--fizzled at the box office or were never made at all.

" 'The Island' sank like a stone, and people quickly realized that just because it's a best seller doesn't mean it's a big movie," said Irene Webb, a vice president at the William Morris talent agency who oversees book sales to the movie industry.

The big money for authors lies instead in television. Authors like Sidney Sheldon ("Rage of Angels"), Judith Krantz ("I'll Take Manhattan") and James Clavell ("Shogun") now routinely command million-dollar deals from the networks when their books are turned into miniseries.

The failure of big books on the big screen has led to a sea change in the way studios purchase most books. Whereas in the past authors often received lump-sum payments for their books or plays (Mark Medoff's play "Children of a Lesser God" went for $1.4 million and "A Chorus Line" went for $5.5 million), the studios now offer up-front option money (which allows them to control the rights to the work for a specific time period, usually a year). Then, when the book is purchased, an additional,much-larger payment comes. For example, "The Color Purple" was optioned by the Guber/Peters production company for $100,000. Author Alice Walker received a much bigger payoff ($200,000 more, sources said) on the so-called "back end," when Steven Spielberg made the movie.

With few exceptions, these two-tiered deals allow the studios to avoid enormous expenditures that often cannot be recouped. "They (the studios) would much rather have a small up-front exposure," said Joel Gotler, a leading book agent and senior executive vice president at The Agency. "They've been burned too many times."

In this marketplace, the customer--and the power his or her name wields--often determines the price. If an agent knows that a star wants a studio to buy a book, the agent knows he can up the ante.

"The agent knows if you buy a book for Spielberg, it's going to cost you," said Gotler. Universal, for example, reportedly paid a bundle--the exact price isn't known--for Thomas Keneally's "Schindler's List" because Spielberg wanted to make the movie. But Spielberg's moved on to other projects and the book sits on the studio shelf.

Once a star shows interest in a book, other studios often get hungry for the same material. Harry F. Saint's "Memoirs of an Invisible Man" offers a classic example. The book was only three-fourths finished when William Morris gave it to Chevy Chase to read. Once word got out that he wanted it, a number of other studios jumped into the fray. Finally it came down to Warner Bros., which has virtually become Chase's home studio, and one other undisclosed bidder. In the end, the offers climbed at $100,000 a clip.

Hype remains an essential ingredient in the book-to-movie selling game. Gotler acknowledges that he was shocked when he brought out the V.C. Andrews best seller "Heaven" and there were no serious bids. Only after an article in the Hollywood Reporter quoted Gotler as saying that he expected the book to sell for about $1.5 million did the offers start to come in. (The deal has not been closed yet, but Gotler said he has several firm bids in hand.)

While best sellers are the most obvious targets for purchase, the studios have hit pay dirt on a number of books before they reached the stands. Mario Puzo's "The Godfather" was bought by Paramount in 1969 for just $80,000 plus a percentage of the movie's profits. Peter Benchley's "Jaws" went to Universal for $250,000 plus profit points.

Webb recently sold Ken Grimwood's "Replay" to United Artists for a $100,000 option against a $400,000 purchase. By contrast, two years ago Webb landed only $250,000 for Pulitzer Prize-winning author John Updike's "The Witches of Eastwick." Updike's novel might have garnered more, but few of his books have been translated to the screen and the strange subject matter of "Witches" was not an easy sell.

Occasionally, authors get lucky too. Paramount had the movie version of "The Untouchables" in development before it realized it had never acquired the motion-picture rights. (Paramount did own the TV rights.) Oscar Fraley, author of the original Eliot Ness books (on which the TV series was based) landed $200,000 for the move rights to the characters he created.

Like everything else connected to Hollywood, source material for movies runs in trendy cycles. Magazine articles had their brief run after the success of "Saturday Night Fever" and "Urban Cowboy." But that trend lost momentum with the less than perfect box-office results of "Perfect."

A chronic complaint levied against Hollywood executives is that no one reads anymore. When they do read, too often they are looking at the "coverage" (a synopsis of plot) of a college student on summer break. Of course, if the right book comes along--the one that has everyone buzzing in the commissary and the one that Goldie Hawn wants to buy--it doesn't really matter if some studio executive didn't read all the way to the end. "There will always be mega-deals on the right book," Webb said. "An exciting story, the right characters and a star attached, and you can still get the big price."

But Gay Talese's price will probably not be topped anytime soon.

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