Net publisher's share

Net publisher's share is the money a publishing business retains once everything owed to other people has been paid out. It is the publishing equivalent of a margin figure, and it is the number a buyer values, because gross collections say nothing about how much of that flow the owner keeps.

The calculation starts with gross receipts — everything collected from societies, licensees and administrators — and deducts the amounts payable to writers under their agreements, then the costs of collection, including society commissions, sub-publishing retentions in foreign territories, and administration fees. What remains is NPS. Because writer obligations vary from deal to deal, two catalogues collecting identical gross can produce very different NPS.

Two adjustments matter when the figure is used for a valuation. Income should normally be measured at source rather than after every intermediary has taken a cut, and the basis should be stated explicitly, because at-source and receipts-based figures for the same catalogue are not comparable. And unrecouped writer advances complicate the picture: a catalogue whose writers are heavily unrecouped shows a flattering NPS today that falls once those accounts clear and writer royalties begin flowing again.

Buyers therefore normalise. They average several years, strip out one-off income, adjust for any income that will not transfer with the catalogue, and check the figure against actual statements rather than a summary. A valuation is then expressed as a multiple of that normalised NPS.

The reason to compute NPS carefully outside a sale is that it is the only honest measure of what a publishing operation earns. Gross collections are a vanity number; NPS is the one that tells you whether the catalogue supports the business built on it.