by Steve Laube
During the last six months we have run into some landmines buried within some small press contracts. In each case it was the author’s relationship with the publisher that helped land the offer, and so we proceeded to review the paperwork in order to protect the author’s interests.
In one case the small publisher was very grateful for our negotiations and contract changes. They plan to change their contract for all authors in the future. We were glad to help our client form that new partnership.
In two cases the publisher said they could not afford to hire a lawyer to review our requested changes to the contract and thus were unwilling to negotiate. We recommended the author walk away both times.
In yet another case the publisher wouldn’t negotiate and said, in essence, “take it or leave it.” We walked away. Our client terminated their relationship with us and signed the deal on their own.
A Couple Landmines (just a couple for the purpose of this discussion):
Royalties based on Net Profit not Net Receipts. This means the royalty the author receives is based on the Publisher’s revenue AFTER expenses. In the movie business this is called “Hollywood Accounting.” Read the linked article see how it is a clause that can be easily abused.
I laughingly told one publisher “You could go on vacation to Bermuda, call it a ‘research trip’ and charge it as an expense against my client’s book!”
The publisher did not laugh and said, “We would never do that.”
“Of course not,” I replied, “but how do I know that?”
“Plus,” I continued, “if your company is sold to someone else, the terms of this agreement will go to the next owner who may not have the same moral compass you have.” The Publisher was unwilling to change this clause in this case, although another publisher agreed to change their contract to “net receipts” after hearing our arguments on this point.
Bankruptcy Clause
This was missing in one of the contracts. It means there is no mechanism for the reversion of rights if the publisher declares bankruptcy. We have heard too many author stories about books they can’t get back because of bankruptcy proceedings with their publisher. While I’d rather not assume a publisher will go bankrupt, the principle of “Expect the best, but prepare for the worst” is something to consider on this issue.
Such are the weekly frustrations of an agent. While these were small publishers we have to watch every contract even if we have negotiated with that same publisher before.
By the way, if you got to the end of this article, “Congratulations!” Most have their eyes glaze over when they see legal stuff in these posts, despite the importance of such dry information.
And that’s why we hire an agent!!
Thank you Steve for diligently watching over the aspects of publishing that CAUSE authors’ eyes to glaze over.
If I were negotiating for myself, I would never have thought to look for a bankruptcy clause! I can’t help but wonder if even a contract attorney would catch issues like that. It seems like those are industry-specific issues where we benefit from the agent’s experience in publishing.
It is hard to find a clause that is missing when the eyes are looking at what is actually on the page.
Glaze over? On the contrary! This kind of thing is exactly why I read you regularly and when my novel was ready for an agent, I sent it to you first. I didn’t even consider trying to navigate these waters myself. This kind of caution couldn’t be better timed. Thanks.
Thank you for your diligence. As they always say, “the devil is in the details.” I hope I never have to negotiate my own contract. Your post showed me why I’m ill-equipped for the task.
Steve, Thanks for this post. I’ll be interested to hear the eventual end of the story of the author who ended their relationship with your agency and signed a contract about which you warned them. I appreciate your pointing out these land-mines.
I’d love to hear the end of that story too!
This is very helpful. I wish you’d been able to include more “clauses” in this article.
Thomas,
I have been intentionally circumspect in this post. The purpose here is more of a cautionary tale to help teach writers to be careful.
A good resource, albeit a bit out of date now, is KIRSCH’S GUIDE TO THE BOOK CONTRACT. Or look at Mark Levin’s NEGOTIATING A BOOK CONTRACT. Both discuss a number of these kind of issues.
Steve
Thank you and all your staff for taking care of us. I appreciate your careful consideration of each contract even though it may be the second and seventeenth with that publisher. I could never understand all that legalese in a contract. Like Richard, I’ll be interested to find out the client who ended the contract with you fared with the publisher even after your warning.
Fine print saves. Or kills.
Thanks for this, Steve.
Thanks for this post, Steve. I agree with Thomas–it’s helpful stuff. Give us more anytime, because what you’re doing is helping us be good stewards of the gifts God has given us.
I think the only people whose eyes glazed over reading this are the ones who think they don’t need an agent for such things and/or a publisher for that matter.
Keep feeding us this info Steve. We need it more than ever these days.
Thanks, Steve! What a timely post. Today I’m pushing “Send” on submissions to three small publishers. Part B, C…of your tips would be greatly appreciated.
Interesting read. I must admit that we are the publisher that walked away from the negotiations. I once heard the definition of “negotiations” as being where “everyone walks away from the table feeling equally ‘taken advantage of'” (I changed the last word)
I also have to admit that I walked away from the negotiation because I felt that the nature of the communication was aggressive and it made me uncomfortable. Just as I felt when I saw this post this morning… sort of like I did when being bullied in school. I am NOT saying anyone is a bully, I am saying that it feels that way.
I have come to the conclusion that this kind of ‘negotiation’ is a yellow flag that only leads to ‘red flags’ down the road. So I pulled the plug, I admit it.
I will make one comment about “risk” in publishing.
Unless one is willing to “self-publish” and pay all the costs, thus assuming all the risk, then the risk is loaded onto the publisher. Look at the wake of closed publishers in the history of our industry and you will understand why Steve thinks it is important that a bankruptcy clause is so important to have in a contract.
Steve failed to mention that most of the small publishing contracts that are out there these days are offering 50% of costs instead of the 25% of the retail price that larger publishers are offering. If the negotiation would have continued I would have offered 25% of the retail as an option.
However I don’t think an author would make as much on that contract.
Our lawyers agreed.
So does my CPA.
There is risk involved in royalty publishing. There is risk involved for an author who publishes with one. That is why the reward is higher.
We were also offering 50% of the cost involved with print books, which is something we are launching next month. All of our books are going to print…
I don’t want to get into a debate (which is why I pulled the plug on the “negotiations” in the first place.) I will say that we were also offering to market the author through our platform at no cost to them…
Also if anyone wants to hear the rest of the story about the author who decided to change agencies to work with us? Email me and I will be happy to fill you in later this year. The first book comes out next month.
Fred,
Thank you for your comment.
First, let me publicly apologize to you for making you feel like I was “aggressive” in our conversation or that today you feel like I’m a bully. Of course I cannot change those feelings but I can apologize for being the author of them.
From my perspective the negotiation/conversation were normal. Having negotiated over 500 contracts in the past 10 years as an agent and at least 200 while an editor for Bethany House (many negotiated with agents) I have a different definition of “aggressive.” But that in no way absolves me of my transgression. Fred, I am sorry you felt uncomfortable and bullied.
Fred’s Book Club Network (http://www.bookfun.org/profile/FredStLaurent) has a great online magazine called “Book Fun.” Read the February issue here:
http://www.bookfunmagazine.com/i/252706
Steve
Steve, Thank you for your generosity and apology. I must also admit that I was speaking for the author who was described here as leaving your representation as well as the additional comments made about her future. This author does now have a new agent, because we set a standard that we, with few exceptions, want authors who are represented.
I forgive you as I am sure the author mentioned does.
That being said I read your blog because I think your are a true professional and indeed looking out for the best interest of the writers you represent.
By the way I honestly believe that agents also protect publishers. Especially authors who, these days, work with multiple publishing houses.
I intentionally did not name names in this blog and intentionally disguised the details so that no one could know of whom I was referring. The point of this post is to educate writers of the need to be careful when it comes to the contracts they sign. Our job is to serve our clients to the best of our ability.
There are times when two parties simply cannot come to an agreement. In legalese conversations each party is incumbent to present their case with utmost confidence. I remember one negotiation, years ago, where the legal counsel for the publisher and I circled each other for an hour poking at each other’s legal terminology. In the end we “shook hands” and that man later asked me to co-teach a class on publishing law issues at a conference.
Steve
Thank you for sharing valuable information from your vast experience. No eyes glazing over here.
Thanks for sharing.
I’m an agent-less author with a small press. I appreciate your knowledge that you share each week with us all.
Off to double-check my contract.
Thank you for a clear eyed view of the process. Everyone wants what is best and sometimes the obvious is just not the obvious. I am richer for following these blogs. Thank you.
Thanks, Steve. Your valuable information is one reason I subscribe to this blog. No glazed-over eyes here. There is so much more we need to know about contracts and pitfalls therein.
Very helpful info. Thank you!