How MBAs Learn Finance: The Story Behind A Best-Selling B-School Textbook
When Eugene Brigham was asked by his boss to help co-author a revision of a finance textbook, he jumped at the chance. It was 1966 and Brigham was all of 35, an assistant professor of finance at UCLA’s business school. Soon enough, his byline would follow that of his boss, legendary financial whiz J. Fred Weston, on the second edition of Essentials of Managerial Finance, which then sold for all of $7.95.
Some 45 years later, Brigham is still the best-selling author of the most durable finance textbook for MBAs ever written: Financial Management: Theory & Practice, the successor to Weston and Brigham’s revision. It is often required reading in the core MBA curriculum at many business schools—and it has made Bingham, now a sprightly, golf-playing retiree of 80 years, one of the wealthiest B-school teachers ever. His ten textbooks on finance have been translated into a dozen languages and used at more than 1,000 universities. More than five million copies of his textbooks have been sold to business school students worldwide.
This past year, Brigham’s last two editions of Financial Management are the first and third best selling textbooks for MBAs, according to Bowker, which tracks book sales. No less impressive, Brigham’s 12th and 13th editions of the book, co-authored with Michael Ehrhardt, have outsold its primary rival, Corporate Finance by Stephen Ross et al, seven to one, says Bowker. In some years, Financial Management can garner as high as a 40% share of the estimated 100,000 students who annually use an introductory textbook on finance. (See table of the top 10 business textbook sellers).
For Brigham, the books have been a constant part of his life for more than 40 years. Sometimes, he concedes, the endless revisions have been an albatross, or as his co-author Ehrhardt puts it, “It’s an annuity of work.” But Brigham’s income from textbook writing has far exceeded all the paychecks he ever received as a teacher of finance at Berkeley, UCLA, the University of Wisconsin, and the University of Florida. Last year alone, new and used editions of the textbook racked up revenues approaching $5 million.
Financial Management has certainly stood the test of time, surviving Wall Street collapses, corporate corruption, financial calamities, and an assortment of new fangled concepts and theories, some of which helped to cause a near total implosion of the world’s financial system. The book’s staying power has as much to do with its authorship and steady revisions as it does with the inertia of professors who assign the book in class.
“It can be difficult to get professors to change the books they use,” says Brent Gordon, editor-in-chief of McGraw-Hill’s business and economics group, which publishes the major rivals to Brigham’s book. “In some cases, professors used these books when they were students. They have a comfort level with them. So once you establish a bestseller and invest in the future of the product, a title will last a long time.”
The latest 13th edition of Financial Management weighs in at 4.6 pounds and 1,184 pages. It lists at a price that would easily provoke condemnation for price gouging: $242.95, though a Kindle version sells for $145.56. (An accompanying “study guide” for Financial Management lists for $50.95 in paperback and comes in at a none-too-shabby 544 pages.)
MBA students who have thumbed through its pages have variously described Financial Management as everything from “not just the best financial textbook, but the best textbook I have ever read” to “the most boring book ever.” Most reviewers, however, seem favorably disposed. Raved Duane Barrett on Amazon: “Finance is a drag but this book is an easy read with some surprisingly humorous anecdotes.”
The story of how Brigham managed to write the text that would shape the way generations of MBA students have learned such fundamental financial concepts from the “time value of money” to the “capital asset pricing model” is a tale of circumstance, luck, skill, and dogged persistence.