That isn't what's being claimed. But everytime a publisher offers a contract to a new, aspiring writer, they're taking a gamble. Most first books don't earn out, or barely do so. The publisher is hoping they don't take too much of a loss, and that the new author's book generates enough interest that their next title will do better. If the book tanks, the publisher absorbs the loss, and just figures there's no point pouring more money into that author, and the publisher's losses are offset by the revenues from better-selling authors. Of course, if an editor consistently chooses authors and titles that tank, they'll probably find themselves in another line of work... But it is NOT uncommon for authors to use pseudonyms for a while after an initial offering under their own name tanked, or to use pseudonyms for work done in other genres.