Contract questions
Sep. 15th, 2004 12:24 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
msagaraThis is actually a question asked in the comment threads at The Whatever, John Scalzi's excellent, although very snarky, blog.
Isn't there a negotiation process with publishers? Big advance, less maneuvering room with rights and such? Royalty percentages? Accounting schedules? Other contract particulars? I truly think there's more to a publishing contract than the cash up front.
And what about a book with a "meh" advance that actually gets decent marketing? Building a career with legs? Looking long term instead of just gimme the money now!
Maybe I'm a naïve git, but it's not so simple. Is it?
For the purpose of this discussion -- or monologue, as the case may more accurately be -- I'm going to assume that First Time Novelist (hereafter referred to as FTN) has submitted a novel to Large Publisher, and after waiting what seems an interminable length of time for the submission to be processed, said Large Publisher (hereafter referred to as LP), or rather, its representative, Harried Editor (hereafter referred to as HE), has picked up the phone, and made The Call.
"We love your First Book, FTN," HE will say. "And we'd like to make an offer for it."
There is very little that's as much fun as being able to call a FTN and give them this news. The FTN has an excitement and a screaming enthusiasm (and a voice to match) that no other novelist will rival.
Now, much of what I've said in this Journal has involved either a publisher perspective or a bookstore perspective. I've done this because I think that the writer perspective is something we all develop; it's the other stuff that we have less access to. I remember once, at a convention, one of the Del Rey editors came to work at our table. And every single time someone picked up a book from the table, she'd ask them what had drawn them to that particular book. It was almost excruciating, but it was a clear lesson: they don't know. Yes, I'm digressing.
Let's go back to HE and the offer. At this stage, FTN can do one of two things. She can say yes, or she can say a qualified yes, as in "My agent will call you." In my example, there is no agent involved, because if there were, HE would lose the joy of talking to FTN, and call the agent instead.
At this point, let's assume that FTN has no agent, and isn't ready to find one. She's happy, and she says yes before the offer comes out. And yes and yes and yes. But the HE waits patiently, and after a while, when English once again becomes the dominant mode of speech, the HE will offer a couple of things. The first, the money. "We'll pay an advance of 5,000.00, for a paperback publication" HE says. "For World rights. We'll pay half on signing and half on acceptance, with royalties of 6% for the first 150K sold, and 8% thereafter." (A bastard HE would offer half on signing and half on publication.)
The author can either say yes or no at this point. Most FTNs are just so jittery about possibly jinxing the deal, they say yes. But again, let's pretend that you've done all your homework. On the phone, at this stage, it's fine to say, "If you want World rights, I want 10,000." This is not, btw, a figure that will fly. But the HE will then either hang up politely and say they have to think about it, or, prepared for this, will say, "What about 6,500?" Alternately, FTN can say, "5K for North American rights only." Almost all houses will say yes to this, because most houses don't cling to foreign sales. The foreign market, while lucrative, isn't always easy to crack. Some companies will move a little on royalty rates. Some won't budge at all, agent involvement notwithstanding. For the FTN, there's no movement. The HE has your number.
In the end, FTN and HE will agree on a sum for NA sales, of 5,500, at 6% royalties, as discussed. This is the royalty rate, because pretty much no one is going to crack that 150K barrier.
And then the contracts take three months (if FTN is lucky) in their slow march through contracts, and eventually they do get sent.
You will note that marketing budgets have not been discussed. For FTN, they're not on the table. Nor have covers. Or placement. I've yet to meet an editor who will discuss the latter without someone producing a drill press first.
Okay. Now FTN is looking at contracts. Is there room for negotiation there? Well, yes. In the case of an agent, the HE will send the agent the agent's niggled down boilerplate. In the case of FTN, the HE has sent the standard boilerplate. What does this mean? It means they've sent the contract as is, the very standard, unchanged contract, with the appropriate sums of money, how they'll be paid out, what the royalty rates are as discussed, and what rights have been bought.
Except wait… some of the rights, such as e-rights, weren't mentioned in the phone call. The indemnity clause (which you can't change, and which is strengthened by some LPs with an additional piece of paper you have to sign as well), which makes you responsible for the cost of any legal defense your book requires. The reversion of rights clause, if they publisher fails to keep the book in print. There are more.
One question: Most contracts are VERY VERY long. And boring. Let me stress that. Very boring. I am however, willing to go and dig up an old first book contract and type it all in, discussing those clauses, if everyone here thinks they can take the boredom of having to read it. Vote below.
I haven't answered the questions, directly, that started this particular ramble. Let me now do that.
First books do not get a big advance 99.9% of the time. If they do, it's noteworthy, and becomes a marketing tool, something to garner both interest and buzz. A sale of 125K isn't huge by commercial standards -- but for a first book, it's out of the ballpark. The context defines the buzz. Because I'm dealing with the 99.9% of the case FTN, there won't be that big advance. In the case of FTN, there will be a small advance, with very little wiggle room, as seen above, in what rights the advance covers.
There will be no point in saying, "I'll take a lower advance if you give me marketing guarantees" because, face it, there is no lower advance. Ditto cover approval. You've got a "meh" deal. There just isn't room to negotiate much in the confines of that deal. Marketing budgets can be very high, as they often involve placement dollars, and those dollars? They're not going to go to your book unless there are highly unusual circumstances, again, the .1% of published authors first books.
Am I saying this is a living wage? Hell no. I'm saying it is what it is.
You can negotiate things like reversion clauses. Some houses don't care much, and some cling desperately, and you'll need to figure out by tone which case is true for the house you're working with. Boilerplate reversion is usually 7 years, with a one year or 6 month window after the out of print period in which you can demand that the book be reprinted or reverted. You can, at many houses, cut that down to a year, which is much more reasonable, and you can also make sure that "out of print" means something. This is wiggle room that you will have.
But while it's worth doing -- look at Daniel Keyes Moran -- in case of future need, it's something that many agents don't consider significant because if the book is out of print in that short a time, it wasn't selling anyway.
Yes, there is more to the contract than cash up front. There are editorial clauses that some authors don't like (they usually give LP free reign in the boilerplate). You can get them to ship you more authors copies than the number they usually offer (frequently 10). But all of those don't really mean all that much in the grand scheme of things.
What about books that are given small advances and a big push? It does happen. It has happened. It just doesn't happen bloody often, and there's no way to negotiate this for FTN. If the book develops legs, as they're called, if it gets a lot of reorders in the first few weeks, then you have some room to talk -- but at that point FTN will have already sold a second novel, often at the same contract terms because there's no leverage to negotiate anything different.
Yes, you could wait. But why? It would mean a delay of at least a year in publication, which means you'd have a two year gap between books. And if, for some reason, your first book develop legs, that gap can cut the legs right out from beneath you.
Wanting as much money as the publisher is willing to pay up front for FTN is not a bad thing. Because the money is small. Building a career will not be hurt by the up front money; you won't get them to go from 5K to 50K.
When you've got some leverage, this is different. But at the point where you do, you'll probably want an agent who has seen so many of these contracts, he has a good idea of how much he can then get up front.
So, for FTN, the answer is sort of: Yes, it is that simple.
As for the shitty deals mentioned, the 0K-3K deals, I just want to say one thing; I've already mentioned it on The Whatever, but if for some reason you're not reading it -- and why not? -- I'll mention it again here.
Short story collections are often handled as well by small presses as they are by large ones. The numbers that you can get out, for a collection, will be much smaller than the ones you can get out for a novel. Most authors don't have a huge fan base that is willing to spend the money on hardcover or trade for short stories, and if you want a short story collection, the small presses are the best way to go. Small presses have much more of a cash flow issue, and they'll of necessity offer as little as possible, because they just don't expect to do huge numbers. 2K are good numbers.
My attitude toward short story collections is this: I've been paid for those already. Reprints often pay a penny a word for most of us, and at 100K words, that's 1,000. So if the small press is offering more than that, and you've already gotten your 6-8K for the original stories, it's found money, and you often get a very nice book in the process. In this case, I'd say go for it.
Isn't there a negotiation process with publishers? Big advance, less maneuvering room with rights and such? Royalty percentages? Accounting schedules? Other contract particulars? I truly think there's more to a publishing contract than the cash up front.
And what about a book with a "meh" advance that actually gets decent marketing? Building a career with legs? Looking long term instead of just gimme the money now!
Maybe I'm a naïve git, but it's not so simple. Is it?
For the purpose of this discussion -- or monologue, as the case may more accurately be -- I'm going to assume that First Time Novelist (hereafter referred to as FTN) has submitted a novel to Large Publisher, and after waiting what seems an interminable length of time for the submission to be processed, said Large Publisher (hereafter referred to as LP), or rather, its representative, Harried Editor (hereafter referred to as HE), has picked up the phone, and made The Call.
"We love your First Book, FTN," HE will say. "And we'd like to make an offer for it."
There is very little that's as much fun as being able to call a FTN and give them this news. The FTN has an excitement and a screaming enthusiasm (and a voice to match) that no other novelist will rival.
Now, much of what I've said in this Journal has involved either a publisher perspective or a bookstore perspective. I've done this because I think that the writer perspective is something we all develop; it's the other stuff that we have less access to. I remember once, at a convention, one of the Del Rey editors came to work at our table. And every single time someone picked up a book from the table, she'd ask them what had drawn them to that particular book. It was almost excruciating, but it was a clear lesson: they don't know. Yes, I'm digressing.
Let's go back to HE and the offer. At this stage, FTN can do one of two things. She can say yes, or she can say a qualified yes, as in "My agent will call you." In my example, there is no agent involved, because if there were, HE would lose the joy of talking to FTN, and call the agent instead.
At this point, let's assume that FTN has no agent, and isn't ready to find one. She's happy, and she says yes before the offer comes out. And yes and yes and yes. But the HE waits patiently, and after a while, when English once again becomes the dominant mode of speech, the HE will offer a couple of things. The first, the money. "We'll pay an advance of 5,000.00, for a paperback publication" HE says. "For World rights. We'll pay half on signing and half on acceptance, with royalties of 6% for the first 150K sold, and 8% thereafter." (A bastard HE would offer half on signing and half on publication.)
The author can either say yes or no at this point. Most FTNs are just so jittery about possibly jinxing the deal, they say yes. But again, let's pretend that you've done all your homework. On the phone, at this stage, it's fine to say, "If you want World rights, I want 10,000." This is not, btw, a figure that will fly. But the HE will then either hang up politely and say they have to think about it, or, prepared for this, will say, "What about 6,500?" Alternately, FTN can say, "5K for North American rights only." Almost all houses will say yes to this, because most houses don't cling to foreign sales. The foreign market, while lucrative, isn't always easy to crack. Some companies will move a little on royalty rates. Some won't budge at all, agent involvement notwithstanding. For the FTN, there's no movement. The HE has your number.
In the end, FTN and HE will agree on a sum for NA sales, of 5,500, at 6% royalties, as discussed. This is the royalty rate, because pretty much no one is going to crack that 150K barrier.
And then the contracts take three months (if FTN is lucky) in their slow march through contracts, and eventually they do get sent.
You will note that marketing budgets have not been discussed. For FTN, they're not on the table. Nor have covers. Or placement. I've yet to meet an editor who will discuss the latter without someone producing a drill press first.
Okay. Now FTN is looking at contracts. Is there room for negotiation there? Well, yes. In the case of an agent, the HE will send the agent the agent's niggled down boilerplate. In the case of FTN, the HE has sent the standard boilerplate. What does this mean? It means they've sent the contract as is, the very standard, unchanged contract, with the appropriate sums of money, how they'll be paid out, what the royalty rates are as discussed, and what rights have been bought.
Except wait… some of the rights, such as e-rights, weren't mentioned in the phone call. The indemnity clause (which you can't change, and which is strengthened by some LPs with an additional piece of paper you have to sign as well), which makes you responsible for the cost of any legal defense your book requires. The reversion of rights clause, if they publisher fails to keep the book in print. There are more.
One question: Most contracts are VERY VERY long. And boring. Let me stress that. Very boring. I am however, willing to go and dig up an old first book contract and type it all in, discussing those clauses, if everyone here thinks they can take the boredom of having to read it. Vote below.
I haven't answered the questions, directly, that started this particular ramble. Let me now do that.
First books do not get a big advance 99.9% of the time. If they do, it's noteworthy, and becomes a marketing tool, something to garner both interest and buzz. A sale of 125K isn't huge by commercial standards -- but for a first book, it's out of the ballpark. The context defines the buzz. Because I'm dealing with the 99.9% of the case FTN, there won't be that big advance. In the case of FTN, there will be a small advance, with very little wiggle room, as seen above, in what rights the advance covers.
There will be no point in saying, "I'll take a lower advance if you give me marketing guarantees" because, face it, there is no lower advance. Ditto cover approval. You've got a "meh" deal. There just isn't room to negotiate much in the confines of that deal. Marketing budgets can be very high, as they often involve placement dollars, and those dollars? They're not going to go to your book unless there are highly unusual circumstances, again, the .1% of published authors first books.
Am I saying this is a living wage? Hell no. I'm saying it is what it is.
You can negotiate things like reversion clauses. Some houses don't care much, and some cling desperately, and you'll need to figure out by tone which case is true for the house you're working with. Boilerplate reversion is usually 7 years, with a one year or 6 month window after the out of print period in which you can demand that the book be reprinted or reverted. You can, at many houses, cut that down to a year, which is much more reasonable, and you can also make sure that "out of print" means something. This is wiggle room that you will have.
But while it's worth doing -- look at Daniel Keyes Moran -- in case of future need, it's something that many agents don't consider significant because if the book is out of print in that short a time, it wasn't selling anyway.
Yes, there is more to the contract than cash up front. There are editorial clauses that some authors don't like (they usually give LP free reign in the boilerplate). You can get them to ship you more authors copies than the number they usually offer (frequently 10). But all of those don't really mean all that much in the grand scheme of things.
What about books that are given small advances and a big push? It does happen. It has happened. It just doesn't happen bloody often, and there's no way to negotiate this for FTN. If the book develops legs, as they're called, if it gets a lot of reorders in the first few weeks, then you have some room to talk -- but at that point FTN will have already sold a second novel, often at the same contract terms because there's no leverage to negotiate anything different.
Yes, you could wait. But why? It would mean a delay of at least a year in publication, which means you'd have a two year gap between books. And if, for some reason, your first book develop legs, that gap can cut the legs right out from beneath you.
Wanting as much money as the publisher is willing to pay up front for FTN is not a bad thing. Because the money is small. Building a career will not be hurt by the up front money; you won't get them to go from 5K to 50K.
When you've got some leverage, this is different. But at the point where you do, you'll probably want an agent who has seen so many of these contracts, he has a good idea of how much he can then get up front.
So, for FTN, the answer is sort of: Yes, it is that simple.
As for the shitty deals mentioned, the 0K-3K deals, I just want to say one thing; I've already mentioned it on The Whatever, but if for some reason you're not reading it -- and why not? -- I'll mention it again here.
Short story collections are often handled as well by small presses as they are by large ones. The numbers that you can get out, for a collection, will be much smaller than the ones you can get out for a novel. Most authors don't have a huge fan base that is willing to spend the money on hardcover or trade for short stories, and if you want a short story collection, the small presses are the best way to go. Small presses have much more of a cash flow issue, and they'll of necessity offer as little as possible, because they just don't expect to do huge numbers. 2K are good numbers.
My attitude toward short story collections is this: I've been paid for those already. Reprints often pay a penny a word for most of us, and at 100K words, that's 1,000. So if the small press is offering more than that, and you've already gotten your 6-8K for the original stories, it's found money, and you often get a very nice book in the process. In this case, I'd say go for it.
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Re: meh deals and rights negotiations
Date: 2004-09-16 08:41 pm (UTC)It's Bantam, a fantasy mystery, 8% start for MM, 10/12.5/15 for HC.
This is interesting to me -- when I sold my first novel, my then-agent was surprised that the royalty rate I was offered didn't budge, but he dealt a lot with Bantam at that time (and I believe editorial, etc., is still separate, although they're owned by the same people).
But I got no paperback royalty movement there, so good for you!
The book, as far as I can tell, is a mass market novel. So it won't be out in Hardcover, (unless the book club picks it up).
The bonuses are based on sales. Once I break $25k, I get a 50% addition to my advance for the following books (it's a 3 book contract) cumulative. So, if - by some miracle - both 1 and 2 earn $25, I get a $25k bonus. It's a bonus on my advance, but still a pretty cool thing. I believe my agent referred to it as "cascading" but the contract negotiation was over a year ago. A lot has happened since then and my memory isn't perfect. Separate listings in the contract (also cumulative, I believe) for HC and paperback.
25K in terms of royalty income? This means a net sale of just under 45,000 copies. In this market, that's a lot -- but if they're already talking about a second printing, before the first printing, that's a decent sign. They'll probably have to ship out about 80,000 copies in order to achieve that number.
For some reason I don't understand, all of the contracts I've seen have breakdowns for mass market, trade paperback and hardcover, even when neither a trade or a hardcover is planned.
Anyway, your book will be a mass market original.
Yep. Cover consult is in the contract. Met with my editor to discuss ideas, had some back and forth. They hired Les Edwards for the art and although I was thinking something more "bluish" it's gorgeous.
This is wonderful. I have some say in covers now, but it's all good will; it's not contractual. Cover consult isn't quite the same as cover approval -- but it's still nice to have.
The best part - to me - was that so many of the rights, especially electronic, other media, merchandising and performance are 100% mine. My literary agent has a remarkable history of co-agenting to film and he immediately found additional representation with APA. We officially hit Hollywood this fall, after reviews come in.
This would be exciting! It seems to me, though, that you've sold World rights to the book? You've kept the rights for non-print media of any sort (except e-book, as you mentioned in the previous email), but you mentioned that your editor was talking about pre-sales from Britain (and a second printing??); if they're doing that, they have British rights? Or non-exclusive British rights?
I have looked all through my contract for marketing specifics - most seem to have to do with me and how I'm supposed to be available, yadda, yadda, yadda - but I can't find much else concrete. I do know tho that I've had several back-and-forths with the marketing department, the book is the feature selection for November, they sent out thousands of bookmarks to sales reps a few months ago, I have national print advertising, and my editor just talked to me yesterday about the second printing and pre-sales from Britain.
Okay. This is the bookstore person in me -- not the writer, not even the published writer. "feature selection" is sort of nebulous.
Usually, feature selection is either a book-club term, or perhaps a B&N term? It's not a sales term. Lead would be a sales term, or SF lead, or Mystery lead. There's usually a LEAD, and that would lead the catalogue, and then each category has a lead title within its own genre.
I know it's not a perfect contract, but for a new writer who has never published a single thing before, I think it's pretty cool. They got print, I kept everything else, and it suits me just fine.
Good for you! You kept what's important to you, and you're happy with the deal. I kept half of the print rights, giving them NA, and kept almost everything else of value.