Tag s | Publishing A-Z

P is for Preemptive Offer

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

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A is for Auction

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 …

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I is for ISBN

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 …

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L is for Libel

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.)

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J is for Just-in-Time

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.

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C is for non-Compete

by Steve Laube

Both Tamela and Karen wanted “C” to stand for coffee or chocolate since both seen to be must-haves for any writer. Instead I’m going to fudge a little (pun intended) and write about the “non-Compete” clause in your contract. This clause has become the latest playground for negotiations.

Here is a simple version of a non-compete clause:

The Author will not publish or authorize the publication of any other work which would adversely affect the sale of the Work without the Publisher’s prior written consent.

Seems fairly innocuous, and it is. This publisher is basically saying “don’t write another book similar to this one.”

Take a look at this language from another publisher’s contract:

Author will neither publish nor authorize the publication anywhere of any Competing Work, including any Competing Work co-written by Author, in any form equivalent to a Physical Version, Digital Version, or in any form hereafter devised. A “Competing Work” shall be any work on the same or similar topic contained in the Work, treated in the same manner and depth, and directed to the same audience.

Imagine you have written a book about anger in the workplace and then later want to write about anger as a parent for a different publisher. Are those “competing” works? Would the second adversely affect the sale of the first?

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B is for Buy Back

by Steve Laube

Many authors are also speakers and as such usually have a book table in the back of the room where the audience can purchase a copy of their book during an event. This can be a very valuable source of income for the author if they have negotiated a “buy back” price (also known as the author’s discount) at the time of signing their book contract.

Check Your Contract Restrictions
It is crucial that you read your contract if you plan on selling copies of your book. No publisher will allow you to resell your books to a commercial account. In other words don’t try to buy thousands of books at your author discount and then re-sell them to Wal-Mart at a special price. That is a no-no. And is a logical restriction.

Also, there are a couple publishers that do not allow you, by contract, to sell your books in any public venue. If you scoff at this after signing the contract and are caught, you are in breach of contract and could face the consequences.

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A is for Advance

by Steve Laube

Whenever I lecture about money the room becomes unusually quiet. Instead of a common restlessness from listeners there is a thrumming impatience to reveal the punch line. The punch line that declares every writer will be rich.

Now that I have our attention let’s turn to the topic of the day. The Advance. This is defined as the money a publisher pays to the author in “advance” of the publication of the finished book. We read about the seven-figure advances in the news because they are unusual and quite substantial. The amount given to everyone else can be rather different. (Read the article where Rachelle Gardner answers the question “What is the Typical Advance.”)

Payout Schedule

The money is not given all at once. There is usually an amount given for signing the book contract and the balance comes at various stages of the writing process. Some pay half on signing, half on acceptance of an acceptable manuscript. Some pay one-third on signing, one-third on acceptance, and one-third on publication. There can be other triggers to create payments like an acceptable proposal for subsequent books in a multi-book deal. We even had one highly unusual situation where the total amount of the advance was divided up over the course of 15 months and the publisher paid the author monthly.

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Happy Birthday Winnie-the-Pooh!

by Steve Laube

On this day in 1926 the book Winnie the Pooh by A.A. Milne was published by Methuen in London. Our household has celebrated this day each year with my wife baking Winnie the Pooh shaped cookies. (Yes, it is a scary thing to be a man in a house of Winnie the Pooh celebrations…)

Some say the real birthday is the day Christopher Robin Milne was given his stuffed bear (August 21, 1921). But since I’m in the publishing business I prefer to mark the date with the publication of the book that started it all. And if you collect rare books I found this listing where Ernest Shepherd’s own copy (he was the illustrator) can be purchased for only $95,000.

So, “Happy 86th birthday!” to Winnie the Pooh.  (Go bake some Winnie the Pooh cookies and celebrate.)

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Inside a Publishing Company

by Steve Laube

I just returned from three days at the Write! Canada writers conference outside Toronto. During my time there I presented a six session lecture series on the Complete Publishing Process: From Idea to Print.

When the entire process is compressed into a short series like that it becomes evident how many people are involved in the publishing of a book at any given publishing company.

Recently Random House did a 10 minute video interviewing a number of key people in-house who are involved in the acquisition, editing, design, marketing, and sales of a book. Having worked for a publisher (Bethany House Publishers) this video made me smile as I remembered many of the great people I was privileged to work with (many of whom are still working there!).

What thoughts does this video invoke for you?

If you are self-publishing, how much of this are you doing yourself?

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