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Publishing A-Z

P is for Preemptive Offer

On October 12, 2015

It can be exciting if more than one publisher is interested in your book. The publishers gather their calculators and prepare to make their offers on the book.

Depending on how many publishers are involved in the bidding process (we’ve had as many as nine at once for a property) it can quickly become complicated. (We talked about the “auction” in a previous post.)

Some will bid solely using an amount of advance dollars paid to the author. Others might keep the advance lower but offer a higher royalty percentage. Some might do a combination of both and toss in a bonus payment based on sales performance (e.g. if it earns out its advance within 12 months of publication an extra $10,000 is paid). Or there may be other elements presented like a sizeable marketing budget.

But sometimes one of the publishers will use what is called a preempt (or preemptive offer) to end the bidding war immediately. We read about these deals in the industry’s news: “The Goobernoober by I. Noah Tall was sold to the Clever Publishing Company in a preempt by The Steve Laube Agency.”

When this happens, a publisher has placed an offer on the table that you don’t want to refuse. (Not unlike the “Godfather”…well, maybe not quite like the Godfather…) For example, Let’s say you have Publisher A with an offer on the table. But they have just heard from the agent that Publisher B has also placed an offer, or are just about to do so. Publisher A does not want to get into a bidding war with Publisher B (by the way, we do not tell the publishers who the other bidder is). The problem with bidding wars is that the money can occasionally become rather spectacular.

In an effort to stop the war from happening Publisher A contacts the agent and puts a very high number on the table and says, “This is a preemptive offer. You have 24 hours to accept or reject it with the condition that this will end the bidding war.” If you reject the preempt, Publisher A’s original, much lower offer, is back on the table and the bidding war begins. The agent/author who rejects the preempt is taking the risk that the bidding process will not exceed the amount of the preempt.

I know this can sound convoluted, so let’s take it out of publishing for a moment and take it into another situation. Imagine that you really want a signed first edition of The Wizard of Oz by Frank Baum in mint condition that is going to go up for auction (with a starting value of $5,000). But you know the person who owns it, or at least you know their agent. Rather than going to the auction and getting into an emotional frenzy over buying it you decide to make a preemptive offer to keep it from going to auction. You say, “I’ll give you $25,000 for that book right now. Or you can take your chances that it will garner more than that at the auction. Take the cash now or leave it.” The owner has to decide whether or not to take the money in hand or wait for more. (Sort of like the “Buy Now” option on e-bay, except in that case the seller is setting a guaranteed price.)

That is the power of the preempt. To “tempt” the author/agent to take the offer now or take their chances with the bidding process. It is a negotiating tool that can do two things for the publisher who wins: 1) guarantees they get the project, because in a bidding war, anything can happen 2) caps the advance dollars expended on the project. There is no danger of wanting a project so much that the publisher keeps upping the ante.

Publisher B, C, and D do not like preempts because they get locked out when the offer is accepted. However, they too have the preempt in their arsenal.

Publishing A-Z series:
A is for Agent
A is for Advance
A is for Auction
B is for Buy Back
C is for non-Compete
D is for Dispute Resolution
E is for Editor
F is for Foreign Rights
G is for Great
H is for Hybrid
I is for Indemnification
I is for ISBN
J is for Just-in-Time
L is for Libel
P is for Preemptive Offer

A is for Auction

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By Steve Laube

On September 8, 2014

When an agent has a client who is wanting to shop for the best deal available from publishers or if there is a particular project that is bound to garner significant interest from more than one publisher, the agent can hold what it called an auction. Or if a project …

I is for ISBN

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By Steve Laube

On April 7, 2014

by Steve Laube 978-0-310-32533-8 978-0-7814-1042-7 978-1-61626-639-4 No, these are not the plays being called by a quarterback during a football game. They are the ISBN numbers on the back of three different books by three different clients. Kudos to the first person to identify the three titles in the comments …

L is for Libel

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By Steve Laube

On February 3, 2014

by Steve Laube

To libel someone is to injure a person’s reputation via the written word (slander is for the spoken word). I wrote recently about Indemnification but only touched on this topic. Let’s try to unpack it a little further today.

First, be aware that the laws that define defamation vary from state to state, however there are some commonly accepted guidelines. Anyone can claim to have been “defamed,” but to prove it they usually have to show that the written statement is all four of the following: 1) published 2) false 3) injurious 4) unprivileged.

The first is obvious. Posting something on Twitter or Facebook is “published.” And yet two weeks ago a Federal judge ruled that a blogger has the same defamation protection as a journalist. (Read the article here.)

J is for Just-in-Time

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By Steve Laube

On November 4, 2013

by Steve Laube

The economics of bookselling are complex and ever changing. There is a method of inventory control called “Just-in-Time” (or JIT) that has revolutionized both the retail and manufacturing industries.

When I began as a bookseller there was no such thing as computerized inventory, at least not in the Christian bookstore business. We used a method call “Stack ‘em high and watch ‘em fly.” Because “If you stack ‘em low, they won’t go.” The idea was to merchandise large amounts of inventory because there was no quick way to replenish your stock if you ran out.

We had sheets of paper with a list of “Never Out” titles in books and music. Weekly we would physically count the remaining stock and if our inventory on a title fell below a particular level we would order more. This was our attempt to time our inventory to match the consumer demand. Titles not on the list would be reordered when that publisher’s sales rep came to visit. The rep would inventory the store and together we would determine what titles to replenish and which ones to let disappear.

Technology Caused Disruption
Computerization changed everything. Using an algorithm the computer determined the speed, or rate, of sale for each title and created order quantities to match the projected demand. This was called “Just-in-Time.” The inventory would arrive just in time to meet the customer wanting that book.

I is for Indemnification

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By Steve Laube

On October 21, 2013

by Steve Laube

Publishing is not without risks. Plagiarism, fraud, and libel by an author are real possibilities. Thus within a book contract is a legal clause called indemnification inserted to protect the publisher from your antics.

The indemnification clause, in essence, says that if someone sues your publisher because of your book, claiming something like libel (defamation) or plagiarism etc., your publisher can make you pay the fees to compensate for their losses. This is to “indemnify” which is defined as “to compensate (someone) for harm or loss.” Bottom line: The publisher has the right to hire its own attorneys (at the author’s expense) to defend against these claims.

Doesn’t sound like a happy clause does it? But you can understand why it is there. This clause and the Warranty clause are notoriously difficult to negotiate. (The Warranty clause is where the things the author guarantees or warrants are listed; i.e. the book is original, it is not libelous in content, etc. This clause will be more fully covered by me at another time) The language has been written by the publisher’s attorneys and are usually set in stone.

H is for Hybrid

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By Steve Laube

On August 12, 2013

by Steve Laube

To state the obvious, the publishing industry has changed rather dramatically in the last few years. The possibility for a writer to inexpensively produce their own books (in e-book form) has shifted the sands. In addition the economic challenges facing the brick-and-mortar bookstore has reduced the amount of shelf-space available to launch a new book via traditional methods. It appears to be an either or choice: go Indie or go Traditional. But there is a third way, the way of the “hybrid author.”

The hybrid author is one who chooses to follow both the Traditional and the Indie routes. Thus the hybrid moniker. They are neither one nor the other, they are both. And just like the hybrid car that is a mix of both gas and electric, the circumstances dictate which form of transportation their words use to reach the public.

Our agency has a number of hybrid authors. These authors continue to have flourishing relationships with their traditional publisher and are receiving new contracts all the time. But at the same time they have certain books that they publish on their own. They are very entrepreneurial and work tirelessly self-promoting their Indie books but also work tirelessly to promote their traditional ones. Some have extremely modest Indie sales and others are quite pleased with the revenue their Indie books produce. The range of sales is rather dramatic, everything from an author who has sold less than 60 of their Indie e-books to another who is in the five figures in Indie ebooks sold. However, each of these hybrid authors continues to maintain a presence in the traditional market as well.

G is for Great

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By Steve Laube

On July 29, 2013

by Steve Laube

“There are a lot of good manuscripts out there. What we want are those which are great.” I’ve said this may times but thought I should elaborate. Please note the following applies mostly to non-fiction projects.

When it comes to the non-fiction books that attract the major publishers I believe the author must have at least two of three “great” things:

Great Concept
Great Writing
Great Platform

Let’s look at the various combinations to see how this plays out.

F is for Foreign Rights

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By Steve Laube

On July 15, 2013

by Steve Laube

Publishing is a global concern. The new Penguin Random House (co-owned by Bertlesmann from Germany and Pearson from the UK) is the largest publisher in the world. The fourth largest publisher is based in the Netherlands. (See this link for a list of the top 50 largest publishers worldwide.) There are thousands of publishers outside the U.S. most of which publish in their native language. Therefore, in most contracts, the foreign rights or translation rights are negotiated.

Some publishers have a dedicated rights division which handles the licensing of your book into other languages. Your contract defines how any income is to be split between you and your publisher. (It is usually a 50/50 split.) Often we have negotiated with the publisher who is doing the English language edition to also manage foreign language licensed. However our agency has also handled the licensing for book published in Korean, Dutch, German, and Slovakian. It is quite fun to look on our shelves and find our client’s books also printed in Russian, Polish, Czechoslovakian, Indonesian, Spanish, Portuguese, and French.

E is for Editor

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By Steve Laube

On June 24, 2013

by Steve Laube

Your editor can be your best friend in the industry (besides your agent, of course). Or your editor can be your worst enemy.

Bad Side First

An editor who doesn’t reply to your email inquiries or return your phone calls is either ignoring you on purpose or is so busy with other pressing matters they can’t get to yours. If you have this problem make sure you didn’t create it in the first place by incessantly poking your editor with minor questions. It is likely many of your questions can be answered by your agent, unless they are related to the specific editing of your manuscript.

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