There's a firestorm in the SF/F corners of these here internets. Apparently some Random House imprints decided they would attempt to buffalo new writers and use their good name to disguise the fact that their opening bid (as it seems they have made alterations to the boilerplate when authors negotiate) could charitably be called an overreaching rights grabs. Oh, and they ask that you give them your "profit" money first to cover their costs.
Random House was then pilloried by some of the more prominent defenders of the realms. And, IMHO, with good cause.
Random House, being the media savvy company they are, caught the sent of their good name being tarnished. Then they sent a response to the various defenders of the realm, putting their hand on their collective foreheads after falling to the fainting couch from the vapors. To be charitable, they did try to clarify their position and explain what they're doing.
And because of the tone of that letter and the not-exactly-advanced-hucksterism language used (seriously, using the language of SPAM and some of the lesser reputable self-publishing companies is not a good way to defend yourself from the charges that you are in that club) the ridiculing continued.
To someone desperate to be published, they may fall for this language. After all, Random House sounds perfectly reasonable and level-headed. Most people trying to get your money do, after all. They don't want to come off as the bully the 800 pound gorilla can be by not looking beyond themselves.
So for anybody who is thinking this may be a good deal, let me ask you a question. When they say, "When we acquire a title in the Hydra program, it is an all-encompassing collaboration. Our authors provide the storytelling, and we at Hydra support their creativity with best-in-class services…" they are specifically referring to their previous paragraph where they say "As with every business partnership, there are specific costs associated with bringing a book successfully to market…", and then they proceed to say they need to recoup those costs. Before you'll ever see a part of that "… potentially lucrative… publishing model for authors: a profit share." So Random House is going to recoup their sunk costs upfront. Will Random House offset my, or the author's, sunk cost in writing the novel? I would even offer to allow them to subtract their specific costs from my costs of writing the novel. You know, because this is a "all-encompassing collaboration."
BTW, I would calculate my costs at the rate that I charge my favorite clients for freelance work. You know, because we're "partners." That rate is $65 an hour. If I can write 2000 words in a four hour session, that comes to 200 hours for a 100,000 word book. So that's $13,000 before I add in all the rewrites and edits. Oh, and travel if I worked on the book at writer retreats. Oh, and my costs for Viable Paradise which helped me become a better writer. Etc, blah blah.
You'd do that for me, wouldn't you Hydra/Random House? You know, because we're "partners." Right? After all, as you say, "the publisher takes all the financial risk up front." I mean, I took the financial risk of writing the book first. That's worth something. Isn't it, partner?