Publishing Contracts
I’ve been negotiating quite a few contracts lately, and you’d be surprised how this aspect of an agent’s job stays constantly interesting. Publishers are always changing their contracts in small and large ways, needing more and more to protect their interests in this difficult economy, so agents have to stay diligent in making sure their authors’ interests are protected as well.
The contract is one of the biggest reasons many authors choose to have an agent. It’s typically 8 to 16 pages long (or so) and is incredibly detailed. Some of the clauses are more negotiable than others, as you might expect. So today I wanted to give an overview of a few of the provisions we are likely to negotiate:
Advance: This one’s fairly obvious—but note, it’s not the only or sometimes, even the most important thing we try to improve in a contract.
Advance payout schedule: It used to be that most publishers paid the advance in halves: half on contract signing, and half on acceptance of the manuscript. (Acceptance is typically when the MS is ready for copyediting and the editor declares it officially “acceptable” for publication.) These days many publishers are paying in thirds, with the third installment due on publication of the book. A couple of publishers (including Random House) are paying in fourths, with that last installment typically coming 12 months after publication. Sometimes the payout schedule is negotiable, and we try to get as few payments as possible.
Royalty rates: The royalty rate for every format imaginable is set in the contract: hardcover, trade paper, mass market paper, audio editions, electronic editions, all special editions such as book club, bulk sales and even Braille editions. Depending on the author and the publisher, we may be able to negotiate better royalty rates on hardcover and trade paper; less commonly on mass market or any of the other formats. For e-books, most publishers have settled on a 25% royalty rate (thanks to previous agent negotiations) and we can’t do much to change it right now.
Unit breaks: Sometimes royalty rates are set in a schedule that increases as the number of copies sold increases. The agent may try to negotiate the schedule so that the royalty rate increases faster, i.e. at a lower number of copies sold.
Subsidiary rights: The contract specifies what rights the publisher will have (versus which ones the author will reserve) and what the royalty-sharing percentage will be. Rights commonly negotiated are foreign rights, audio rights, and performance (TV & motion picture), although there are numerous other sub rights covered in the contract.
Number of free books for author: It’s always specified in the contract, and varies widely. I try to get the author a reasonable number of free copies, and I encourage using them for promotion.
Author buy-back rates: Beyond those free copies, how much does it cost for you to buy your own book? This is typically in a sliding scale depending on how many copies you’re buying at one time. Higher discounts apply the more copies you buy at a time. You typically buy in case-lots, and the size and weight of your book will determine how many are in a case. The author discount schedule is an important point of negotiation for clients who will buy large numbers of their books to sell at their speaking engagements. (Keep in mind you can’t sell your own book in a way that competes with the retailers your publisher is selling to.)
Additional books or option clause: The contract specifies exactly which books are included, and whether the publisher has an option on future books. Option language is important and we’re careful not to lock the author into something that may not be advantageous for them.
There are many other clauses in a publishing contract, and we pay attention to every single word. These are the main ones authors are usually concerned about.
P.S. I have not given examples of dollar amounts for advances or royalty rates, because they vary so much depending on type of publisher, type of book, the author’s history, and other factors. In another post I can go into detail on this.
Q4U: Do you have specific questions about contracts that I can address in a future post?
© 2010 Rachelle Gardner, Literary Agent
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