Making improper advances: So Random House want Joan Collins to reimburse them because her work doesn't cut the mustard. So what did they expect? Peter Guttridge on the big name game

It seems remarkably churlish of Random House, the US publishing conglomerate, to want back from Joan Collins the dollars 1m they paid of an agreed dollars 3m advance simply because, as some reports claim, the books she delivered to them are unpublishable. Most publishers who give whopping advances to celebrities know they are buying a name, not a writing talent, and get someone else actually to write the book.

Heinemann did the decent thing for supermodel Naomi Campbell's debut novel Snow and hired a 'co-writer' to 'assist' her. (Since Campbell is said to earn pounds 25,000 a day modelling, you wonder how much time she felt she could spend on her opus for a comparatively measly pounds 100,000 advance.) At her former publisher, Simon & Schuster, Miss Collins apparently 'worked closely' with her editor Suzanne Jaffey on her first novel. If, as it appears, Random House allowed Miss Collins to write the books herself, quite frankly they have only themselves to blame.

It's unusual for publishers to demand advances back for books that have actually been delivered by an author, perhaps because doing so might open them to ridicule for their bad judgement in commissioning the book in the first place. When Simon & Schuster in the US pulled the plug on Bret Easton Ellis's controversial American Psycho only a month before publication, Ellis kept his dollars 300,000 advance. (And had a deal within 48 hours with a division of, yes, Random House.)

'Usually a publisher will only claim back an advance if a book isn't delivered at all or if it is published by someone else,' says the agent Serafina Clarke, one of whose authors recently had to pay back an advance - with interest - when he took his book to another publisher because he felt his original publisher was messing him about. The Random House writ does indeed claim that Miss Collins failed to deliver her two contracted novels. (Her counter- claim says she did deliver and she'd like the other dollars 2m, please.)

The right-wing historian David Irving is in the same boat - and just out of Pentonville prison for contempt of court - as a German publisher attempts to get back the pounds 58,000 they paid him for an undelivered two-volume biography of Winston Churchill. Mick Jagger set the scene some years ago, when he voluntarily paid back the advance Weidenfeld & Nicolson had paid him for his autobiography - he claimed his memory of his high-living rock 'n' roll days was too much of a blur to make the project feasible.

The Random House / Joan Collins rumpus has focused attention again on the high-risk gambling that big advances represent for all publishers. The pantheon of now- wealthy winners is a familiar one. During the publishers' feeding frenzy over biographies, Chatto & Windus paid Michael Holroyd pounds 625,000 for his George Bernard Shaw biography. Peter Ackroyd got pounds 650,000 for works on Dickens and Blake. HarperCollins paid Margaret Thatcher pounds 3.5m for her memoirs and Jeffrey Archer pounds 2m upfront for Honour Among Thieves. Vikram Seth received pounds 250,000 for A Suitable Boy, an astounding amount for a literary novel. Getting into the spirit of the thing, Bill Gates, the billionaire American computer guru, is looking for a dollars 2.5m advance for his planned book about the 'information highway'. As yet there have been no takers.

'Advances are polarising madly at the moment,' Serafina Clarke says. 'They are either very high or very low, but there is also a marked increase in the number of high advances for first-time novelists.' LittleBrown paid around pounds 300,000 for the British rights to Alan Folsom's thriller The Day After Tomorrow, a first novel which has earned the former American television screenwriter dollars 4m worldwide. Heinemann paid pounds 250,000 for two novels by Michael Ridpath, a former venture capitalist with no writing experience at all who used a 'How to Write' manual to help pen his novels. Including foreign sales, Ridpath has already earned more than pounds 600,000 and expects to earn pounds 1m in advances.

Can publishers ever hope to get a return on such investments? Carolyn Mays, senior editor at Hodder & Stoughton, says: 'Publishers give as an advance what we think we are going to get back from the royalty element of the sale of a book. If we are talking big figures then we look to make it back on turnover.' Mays was the underbidder at an auction for the journalist Yvonne Roberts's novel Every Woman Deserves an Adventure. 'Pan paid a pounds 150,000 advance which they probably can't make back from royalties, but they can still earn the money in overall sales of the book.'

It remains a gamble. Dan Franklyn, publishing director of Cape, who paid pounds 75,000 for Tim Willock's Green River Rising, says: 'All you can do is cost out how many copies you think you can sell. Roddy Doyle's Paddy Clark Ha Ha Ha earned back its advance - which was a pretty good one - in about three minutes. I expected to sell 50,000 and we sold 350,000. I pulled out of the auction for Wild Swans when my bid of pounds 50,000 was topped by Collins (they bid pounds 55,000). The book has since sold a million copies. But every publisher carries unearned advances in their profit and loss when sales of books don't repay the initial advance. The problem isn't the odd pounds 100,000 advance, it's the many pounds 10,000 advances which only earn back pounds 4,000.'

Auctions have upped the ante for publishers and authors. As Carolyn Mays says: 'Everybody is desperate to have a bestseller, so everybody jumps on the three bandwagons going through town.' Smart editors get in with a high offer before a book goes to auction. Kate Parkin at Random House has signed Kate Saunders to a four- book deal for pounds 400,000. She paid the journalist, who at the time had two low-selling literary novels to her credit, more than pounds 100,000 for last year's blockbuster, Night Shall Overtake Us, before Saunders had even written the synopsis. Parkin has been quoted as saying: 'A publisher's real profit is made from the backlist. Five years down the line I want to see Kate Saunders's books selling at the rate of 30,000 a year. Only then will we know if I was right to sign her up.'

The risks might be high, but the rewards are great. HarperCollins expects Archer's novel to have sold a million copies by the end of its first year of publication. Seth's A Suitable Boy has sold 100,000 in hardback alone - paperback sales are expected to increase that amount sevenfold. Random House publish both John Grisham and Michael Crichton, who constitute a licence to print money.

The Random House / Joan Collins case will take years to reach settlement. In the meantime, Miss Collins could do worse than quote the example of Sir Edward Heath, the one who got away. Sir Edward has kept his publisher, whose name is lost in the mists of time, waiting more than 20 years for his memoirs. The book has still not appeared and, so far as is known, the former PM has never paid back the advance.

(Photograph omitted)