Originally published on Forbes.com Oct 21st, 2013
Something that comes across very clearly in the recent Salerno biography and documentary is that JD Salinger was passionate about protecting the integrity of his work. Being a tax blogger and all that has me thinking about the unique estate planning problem that old JD faced. Dead authors can be worth an awful lot. According to a Forbes listing of top earning dead celebrities the estate of JRR Tolkein is good for $5,000,000 per year. I doubt that Salinger has anywhere near that potential. Consider this thought experiment.
Catching In The Rye – The Game
Imagine a role playing game with a large portion of Manhattan circa 1950 portrayed in fine detail. Your ultimate quest as Holden Caulfield is, of course, to find a safe retreat among the hobbit like denizens of Corny, NH who will protect you and the girl who runs off with you from all those phony bastards(PBs). The final task will, obviously, be standing by the cliff as innocent children come out from the rye and you struggle to rescue them, while perhaps giving an extra shove to the occasional PB.
Their will be numerous quests before you can get there. You will search for frozen ducks in the lake at Central Park. Roam the subways to recover the lost fencing equipment. Perhaps a fist fight with that GD Maurice. You must always be on the look-out for PBs and will get extra points for discerning exactly what is phony about them. You will need to be carrying a variety of cleaning equipment to be able to wash the “F” word off the various surfaces on which it appears.
My son William, for a time an avid gamer, thinks the best format would be a point and click adventure game and assures me that “it would get noticed”. Erik Kain, who writes about gaming for Forbes.com, tells me:
A ‘Catcher in the Rye’ game would be fascinating.
I have no clue what the rights would be worth, as it sounds very art-house and probably not a huge money-maker.
Of course, that whirring sound you hear is JD Salinger spinning in his grave at the prospect of such a travesty. Nonetheless, things like that is what has gotten the Tolkein estate to $5,000,000 per year. I don’t know how many board games there are based on Lord of The Rings, but I do know that I own three. There is a World of Warcraft style MMORPG – Lord Of The Rings Online
Catching In The Rye – The Game might provide some passing amusement to hipsters like my creative writing major son, but it seems unlikely to be a competitor with the Grand Theft Auto franchise.
Think about the merchandising potential of Catcher in The Rye. There is that hat that Holden was always taking on and off. And then there is ? That hat ?
Some Solid Value
According to Salerno, Catcher in the Rye continues to reliably sell something like 250,000 copies per year. The main reason for that, I would speculate, is that it is required reading for a vast number of high school students. Of course, it still gets banned every once in a while, which probably motivates the kids in those high schools to go out and buy it. I was wondering if the unpleasant revelations about Salinger might create some sort of feminist backlash that might hurt Catcher in the required reading department. Among my covivant’s vast family connections, there is a high school English teacher whom I consulted on that question:
I can see it being risqué to teach this book when it first came out, but with the evolution of TV and video games, many kids (and adults) have become desensitized to sex & violence. So it’s no surprise to me that this is still a classic taught in schools. I think high schoolers can relate to the main character, which doesn’t happen with a lot of other classic novels (like Moby Dick). I absolutely don’t think teachers (male or female) would stop assigning this book based on the author’s past, plus many teachers don’t have a choice, as curricula is often dictated by the school district.
So here is my back of the envelope valuation of that revenue stream. It has to be mostly paperback sales, so to make the math easy I’m going to peg it at $2.00 per copy to Salinger. That’s $500,000 per year. Again to make the math easy I’ll discount it at 10% and consider it a perpetuity. That gives you $5,000,000. So Salinger had a taxable estate to worry about. Put aside how much he might have accumulated from the royalties on the 65,000,000 copies that sold in his lifetime. The value of all that might crank up the taxable estate, but if it was something like a securities portfolio, there would be liquidity to pay the tax. The real problem is if the rest of his literary estate is immensely valuable, but there is a desire that it not be fully exploited.
Can Estate Taxes Force Exploitation ?
The IRS has established a willingness to ignore legal niceties that might affect valuation. In the Canyon controversy, they were dealing with a montage that included an honest to goodness stuffed American eagle. It is illegal to sell or export it, but that did not bother them. They posited an eccentric, reclusive Chinese billionaire who would pay $65,000,000.
In the Estate of Andrews the Service established the principle that future exploitation of an author’s work can add to the value of the estate. VC Andrew’s chronicles of “children in peril” that commenced with Flowers In The Attic, continued to be produced after her death. Thus her name was a valuable asset and was included in her estate.
It is the combination of those two principles that created the threat of the greatest possible Catcher In The Rye travesty.
“If there’s one thing I hate, it’s the movies. Don’t even mention them to me.”
According to the documentary, under the terms of the JD Salinger Literary Trust, which since 2008 has owned the copyright to all Salinger’s works there will never be a movie of Catcher In The Rye.
[So is that that when it comes to the valuation of Salinger’s literary estate ? Maybe. Maybe not.
Salinger was the sole trustee of the trust until he died when he was succeeded by his son Matthew and his widow Colleen. That Salinger was the sole trustee is significant. Matt Erskine, who runs a boutique law firm that specializes in unique assets agrees with me that there is likely an argument that the movie rights would be included in Salinger’s taxable estate, even though his trust renounces them.
Matt does believe that they might be heavily discounted due to the difficulties that the trust would have in exploiting them. Attorney Howard Medwed, who knows quite a bit about literary matters thanks to his spouse, noted novelist Mameve Medwed indicated to me that in the event the trustees went renegade and tried to make the movie anyway, it is possible that the Attorney General of New Hampshire would have standing to block it.
Jonathan Schwartz of Interlock Media, unlike myself, is a real investigative reporter. Among his achievements is a hard hitting documentary on sexual assault behind bars called Turned Out. When I asked him for some research assistance, he pointed out to me that Salerno took nine years to do his documentary. Then he went to work. He interviewed some industry insiders and reported a surprising result. They pegged the movie rights to Catcher in the Rye at a mere $2,000,000. Heavily discounted as Matt suggest, they become immaterial.
Nonetheless, I would worry that if the Salinger estate caught what I call the “Agent From Hell” (AFH) there would be a big dispute about the entirely hypothetical movie rights. AFH would point out that Spielberg had wanted to make Catcher in the Rye and would go on to posit a hypothetical eccentric high tech billionaire who would pay a fortune for the movie rights to make sure that the movie would not be made out of respect for Salinger’s wishes.
The Pages In The Vault
Probably the most exciting revelation of the Salerno biography was the treasure trove of Salinger work that will be gradually released by the Literary Trust over the next several years. There are two items that have me really excited:
Salinger has also written a novella that takes the form of a counterintelligence agent’s diary entries during World War II, culminating in the Holocaust
In addition, there is one novel, a World War II love story based on Salinger’s complex relationship with his first wife, Sylvia Welter. The two main characters—Sergeant X from “Esmé,” recovering from a nervous breakdown, and Sylvia’s fictional counterpart—meet in post–World War II Germany and begin a passionate love affair.
There is more including:
…a complete retooling of Salinger’s unpublished twelve-page 1942 story “The Last and Best of the Peter Pans.” The original version can be found at Princeton University’s Firestone Library and is one of the earliest of the Caulfield stories, in which a very young child nears the edge of a cliff. This reimagined version of the story will be collected with the other six Caulfield stories as well as new stories and The Catcher in the Rye, creating a complete history of the Caulfield family.
The information about the trust owning all the works and the identity of the trustees came out in litigation about a bootleg sequel to Catcher In The Rye. 60 Years Later Coming Through the Rye by John David California imagines Holden Caulfield, an old man, waking up in a nursing home with his memory of the last sixty years erased. Thanks to the ferocious litigation by the Salinger Literary Trust, you will have to have a copy smuggled in from the United Kingdom if you want to read it.
The part of the litigation that would be really interesting to the Agent From Hell is this affidavit by Phyllis Westberg. She opines that a sequel to Catcher in the Rye written by Salinger would command an advance of at least $5,000,000. It would seem that the “complete history of the Caulfield family” would qualify as at least equivalent to a sequel. Throw that in with what may turn out to be the greatest World War II novels ever and some other stuff and AFH will be arguing that there must be something like $50,000,000 worth of manuscripts in that safe.
Conclusion
I could construct a counter-argument to the Agent From Hell’s high valuation of Salinger’s literary estate, but you would have to think that there should have been planning done to address the high value contingency. That will be the subject of my next post. There is a very important fact that I am leaving out at this point and any commenter who chooses to “spoil the surprise” will not be called out.
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