nakedcapitalism | Seeking to make sense of the $65 million figure, some have pointed to the former President’s prior book sales and Clintonesque celebrity status. Since 2001, 1995’s Dreams from My Father and 2006’s The Audacity of Hope—both
of which were published by Crown, a division of Random House (now PRH)
owned by the German multimedia conglomerate Bertelsmann—have sold
roughly 4.7 million copies, undoubtedly yielding substantial profits.
But according to industry insiders the former First Lady’s
contribution is a far greater gamble. And despite the President’s
successful publishing record the size of the contract remains something
of a mystery. At $20 per book, sales of the two books combined would
have to exceed 3.25 million copies to match the cost of the advance, and
that doesn’t include necessary overhead such as the costs of materials,
distribution, and marketing. As one insider stated, “no one expected it
to go this high, [with the books selling for] almost double what we
might have imagined…”
At this point, a brief review of the relationship between the Obama
administration and the companies behind the deal may shed light on the
logic underlying this extraordinary bid.
Since the merger of Penguin and Random House
in 2013, PRH has been owned jointly by Bertelsmann and the British
education and publishing multinational Pearson, PLC. A leading producer
of education and testing materials, Pearson has profited substantially
from one of President Obama’s major legislative initiatives—Race to the
Top (RTTT).
Much like its Bush-era predecessor, No Child Left Behind, RTTT
provides competitive funding to K-12 schools based on a range of
criteria intended to stimulate higher teacher and student performance.
Among the standards for receiving funding under RTTT is the adoption of
Common Core (CC) testing, which, in effect, incentivized school
districts to hand federal grant money over to private firms that create
CC tests.
Backed by the powerful Gates Foundation
and pushed heavily by President Obama and then Secretary of Education
Arne Duncan, RTTT was met with widespread criticism among parents,
teachers, and education scholars for its punitive and test-centric
approach to education reform. In July of 2011, outrage over the
initiative culminated in a widely publicized march
held outside the White House, attendees of which included some of the
country’s leading educators, such as Jonathan Kozol and Diane Ravitch.
Despite extensive outcry, including calls for Duncan’s resignation
in 2014 from the National Education Association and the American
Federation of Teachers, two groups that many regard as traditional
Democratic constituencies, President Obama continued to voice support
for Duncan and RTTT. When Duncan finally resigned in late-2015, Obama praised Duncan’s record,
while not-so-subtly infantilizing his critics: “Arne has done more to
bring our educational system—sometimes kicking and screaming—into the 21st century than anybody else.”
But if RTTT was a failure in the eyes of the country’s educators, it
was a remarkable success for the testing companies. Between 2010, when
RTTT first took effect, and 2014 demand for tests in the U.S. grew from $1.6 to $2.5 billion. Few firms benefitted from the rise of standardized testing in the United States as much as Pearson. According to an analysis by CNBC from 2010 to 2014 Pearson received more contracts than any other company in the industry—27 out of 128 in total.
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