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

Be Sociable, Share!
Tags:
  • Ilya Kralinsky

    >How many fellow writers — show of hands here — felt on-rushing queasiness by the second stipulation? Ah-ha-ha … semantically gifted syllable slaves, and contract law gets you green around the gills — you should be able to negotiate these things and understand their complete meanings as you play with words all day (hopefully), my friends. I like this article. It allows the artistic grazers to know there's a business out there (prepare to mollify that hard-earned writing style to fourth grade on the Flesch-Kincaid Richter scale)ready to smack them in their studious, down-turned noggins and knock their eyeglasses across the room. AH-HA-HA-a-a-a. This pleases the Mighty Ilya. Continue.

  • Anne Gallagher

    >Thanks Rachel. This is important information.

    Question — So there are different royalty rates on the different type of books… IF I read that correctly. It's not all just 7-8% cut and dried.

    Hardcover = 8%
    Trade paper = 7%
    Mass Market = 6%
    Book club = 5%

    Do you mean to say it would look like this?

  • Em-Musing

    >Is is OK if I print this blog post so I can use it for later reference? I just know when the time comes when I need this info, I won't find this post again.

  • Author Jennifer Hudson Taylor

    >I've only sold to one publisher. Abingdon still pays in halves, so this news is good to know. I had no idea publishers were switching to paying advances in thirds and fourths.

    Part of me was still hoping I'd one day be able to quit my full-time job. Now the reality is hitting me that that may never happen. Increasingly, I'm now hoping to at least be able to go part-time one day, but the distant future seems to be getting further and further into the distance.

  • Lance Albury

    >Rachelle,

    Not necessarily a question you could construct an entire blog post on, but how many free copies do publishers typically give to an author? What's the average author discount?

  • Ann Nichols

    >Dear Rachelle,
    This is why I need an agent!
    I thought I had read the fine print well on a contract I signed several years earlier for a three book deal only to find out later – and to admit this makes me feel quite stupid – that I forever signed away the rights of the books. The contract had changed from the previous ones I had signed with the same company and I just didn't read it carefully enough…
    Honestly, I believe the writing of books needs agent, editor, publisher and oh yes, the author! It is a business, and like all businesses needs all departments to run smoothly and to everyone's satisfaction.
    Thanks for this information!
    You are a gem to take the time to get it "out there" in this way.
    Have a nice day!
    Ann

  • BK

    >At some point, could you go into more detail on performance rights, ie. what is standard (as much as there can be a standard), what the options are, and why an author should/should not choose certain things pertaining to performance rights?

  • Britt Mitchell

    >A good post.

    I, too, as a previous commenter mentioned, was wondering how many free books a writer typically gets. I'm sure this varies a great deal from publisher-to-publisher.

    Also, as Jennifer Hudson Taylor mentioned, I once dreamed of a writing career as a sole career. But I think dreaming of part-time work is more realistic.

  • Anonymous

    >As always, thank you for the helpful information. I am curious, how do you negotiate when rights are returned to the author? I am especially interested in how you handle ebooks–is it possible for the author not to sell those rights at all, and how do you negotiate when (and if) those rights revert?

  • Rachelle

    >Regarding free author copies: Keeping in mind it varies as I said, publishers may offer 10 to 20; we may negotiate up to 50 or 100 depending on various factors, including whether the author truly has means to use them effectively for promotion.

    Regarding e-book rights (in answer to Anon 6:34): There is no way on God's green earth that a publisher would give up e-rights today. That's a dealbreaker.

  • Erin MacPherson

    >This is really interesting. I'm wondering how often your negotiations are successful? Like are you often able to negotiate better contracts for your authors or are publishers pretty set in stone and you're lucky to get one or two of these things changed?

  • Susan Bourgeois

    >My concern or interest would be in the area of performance rights.

    I would like to know more about this area. How much future interest does an author have to relinquish in the negotiating process?

  • Lance Albury

    >One possibility for a future blog post: How an author can most effectively use their free copies.

  • Mary

    >Hello Rachel – as an unpublished author (although I now have an agent) I had no idea of these different contract clauses. I have read that publishers may eliminate advances as the new world of publishing unfolds. Do you have a perspective on this matter? I suppose it's important to understand that publishers need to make money in order to survive and of course will want to make a profit on as many books as possible. So they are not really in the court of an author, they are protecting their own turf and their rights. Can you also comment on how contracts are changing in recognition of a global world where ebooks can, at least technically, be downloaded from anywhere?
    Many thanks,

  • Anonymous

    >Wonderful post Rachelle. Thank you! I've recently been approached by a packager and I'm curious how those contracts differ. (I'm currently unagented and want to make sure I make a good business decision.) Thank you for sharing!

  • Catherine West

    >OMG. All I have to say is thank GOD I have you…that's a LOT of information to absorb.
    What happened to the olden days when everything was done on a handshake because the publisher knew your daddy? Ha. Thanks for laying it all out there. Going to find the Tylenol now.

  • Anita Mae Draper

    >I would think it'd be like at an auction where the seller knows the value but starts low so as not to scare anyone away. And the buyer tries to get it for the lowest price knowing it will go higher. They are willing to play with the numbers provided they stay within their limits. If the price is too high (or too low for seller) they pass.

    I appreciate the post, Rachelle. Thank you.

    Anita Mae.

  • Heather

    >Thanks for telling us all this, Rachelle! I've always wondered what clauses agents would try to negotiate.

    Here's a question I'd like you to address:

    What ways can authors sell copies of their books without competing with the retailers? I know that speaking events and book signings are good, but can we offer autographed books from our website? Can we ask small, independent bookstores around town to carry our books?

  • Kirsten Lamb

    >Thanks for this post!

    My question probably doesn't appeal to the majority of your blog readers, but I'll give it a shot, since you've ghostwritten books: Have you included royalties in your ghostwriting contracts? Should that only be done if the author has an agent/publisher lined up?

  • Jill Kemerer

    >Wow, those are a lot of things to keep straight in an ever-changing market. My question is more personal.

    On average, how long does it take you to read the fine print of a contract? Do you routinely find surprises in contracts?

    It seems like it would be really time consuming and stressful.

  • Margo Kelly

    >Very helpful. Thank you. :)

  • Rachelle

    >Kirsten Lamb: Yes, some collaborators get a percentage of royalties, but it's not the norm and it is negotiated on a case-by-case basis.

    Jill Kemerer: Contracts are the number one priority of any given day, so if there are contracts on my desk, that's what I'm working on. It may take thirty minutes or it may take an hour or more to go through a contract, depending on the length and mostly, how many contracts I've already done with that publisher. The contracts that take the longest are things we don't do everyday like motion picture options, or as happens frequently, when a publisher comes out with an all new totally revamped contract template. In any case, the amount of time it takes to go through a contract isn't the important thing – it's how long it takes for the back and forth between me and the publisher, which could take a couple of days or a month or more.

    Catherine West: It might seem like a lot of information to absorb… but keep in mind this blog post contains just a tiny snippet of what's in a contract!

  • Sue Harrison

    >I've found myself in a frustrating situation with a publisher regarding the definition of "out-of-print", which would allow a subsequent reversion of rights to two of my novels. These novels have earned back their advances but are no longer available to the public. I'm guessing this situation has come about because I signed these contracts before ebook rights were contracted.

    Now that ebook rights are contracted, do authors still have so much difficulty obtaining a reversion of rights when their books are no longer in print?

  • Carol J. Garvin

    >This is such helpful information, Rachelle. Thank you! I've bookmarked this page but it reinforces my belief that a good agent is imperative.

  • Beth

    >Is it easier to retain subsidiary rights for authors who are first time authors? Is it better to do this?

  • Rachelle

    >Sue Harrison: The clause on reversion of rights is another one that we pay very careful attention to, and make sure the wording is VERY clear and doesn't unnecessarily hold rights for too long. Many authors who still have contracts in play that were signed before ebooks were in existence are finding themselves in difficult circumstances, which vary from author to author and publisher to publisher.

  • Rachelle

    >Beth 10:46 am: No, it's not easier to negotiate anything for first time authors because there's not a lot of negotiating leverage.

  • Denise Grover Swank

    >What should an author do if they are offered a contract from a small publisher but don't have an agent? I would love to have an agent and I am working on it, but have a small publisher reviewing my manuscript.If offered a contract, should I seek an attorney to review instead?

  • Anonymous

    >Fantastic post, Rachelle. I normally comment here in my real name, as a writer, but I'm a publishing attorney in my "day job" and since I wanted to post on that basis, I'm holding back my name on this comment. (Chinese walls and all that.)

    This is one of the best brief explanations of salient publishing contract points I've seen in a long time. It's hugely valuable, and hopefully all your readers will recognize that.

    One thing I'd add is the idea of derivative works, which is not always the same thing as the option clause. Contracts normally define a "derivative work" as anything which derives or originates from a creative work. That could include sequels, but could also include spinoffs, films and TV productions, merchandising and a variety of other things. When I draft publishing contracts for my clients (who are mostly small to mid-sized publishers but some authors too), I try to make sure the contract includes some mention of derivative works, even if only as a sentence in the option clause specifying which types of derivative works are included (or not included) in the contract. Silence usually means non-inclusion, but as your post points out, it's much better to have an answer in the contract than to have to argue about it after the fact.

    Thanks for a great post and for your willingness to share your knowledge with the rest of us.

  • Jillian

    >As always, great information. Thanks for being so generous and sharing this information with us. I always learn something when I visit this blog.

  • Jill Kemerer

    >Thanks for answering my question, Rachelle. I appreciate the inside look at what goes on with contracts.

  • Roxanne

    >Very insightful post. Thank you very much for taking the time to do this and inform all of us!

  • T. Anne

    >As much as it is all difficult to understand I love this aspect of publishing. For certain I need the guidance of an agent to wade these waters, but I look forward to navigate them.

    Rachelle, does Word Serve handle all foreign rights/ film rights themselves? Are all of the publishers marketing strategies addressed in the contract? I understand zero of this. I'm just glad to know there are free books involved even if the books in question are my own. ;)

  • Kissed by the Creator

    >Thanks so much. I am just finishing my book proposal and have been trying to decide if I should try to get an agent or go it alone. This makes me think that at least for my FIRST book I should probably go with an agent. You have helped make a decision that I have been wrestling with for awhile.

  • Sara Flower

    >Thanks for posting! It was informative to know about the ins and outs of publisher/agent negotiations. I can't wait until my book is at that point. :)

  • Anonymous

    >This probably paints me as a complete rookie, but I'll ask anyway. Are advances lower for first-time-published authors? Are royalty rates? If the advance was lower it wouldn't bother me (much), but it seems like the royalty rate shouldn't change.

  • Anonymous

    >A few things I'm interested in learning about:

    1) what tends to be the difference between a single book deal and a mult-book deal besides the number of books the contract is for?

    2) for electronics rights, what tends to be the period of time before those rights revert back to the author?

    3) what new trends are you seeing in contracts since we went into a recession in 2008?

  • Richard Levangie

    >I remember when I used to contribute to Endless Vacation; it's the world's largest travel magazine, and every essay or feature that I was assigned came with a 20- or 25-page contract that seemed to include a bevy of ridiculous stipulations. This seemed the silliest: the right to use a large cardboard cutout of me to help sell the magazine at resorts or on cruise ships. I was writing for a few good magazines at the time, but I was mostly anonymous.

    A few issues later, it clicked, when my feature on Nova Scotia was followed by a shorter feature by Corbin Bernsen, who played Arnie Becker on LA Law. A life-sized card board cutout of Bernsen might have sold a few copies.

    Given all that, I'm actually surprised that publishers can get it all done in 8-16 pages. Maybe they don't bother with life-sized cardboard cutouts?

  • Dianne E. Butts

    >If a novelist is also an aspiring screenwriter, can they negotiate to write the screenplay for their own novel? Do you see that happen very often?

  • Rachelle

    >Anon 5:09 pm: Yes, advances and royalties are sometimes lower for unproven authors. But of course, that all goes down the drain for really "hot" projects that go to auction.

    Anon 6:02 pm: The differences between single and multi-book deals? Not much, really. Everything is spelled out in both cases; for a multi-book contract, there are more due dates and a more complicated payout schedule, but nothing is materially different.

    On your electronic rights question: there are provisions in the contract that define when the rights revert back to the author. They're not based on a period of time but on the success of the book, i.e. if the publisher is generating less than "x" amount of royalties for the author in a given year, the author can terminate the contract and get the rights back. At least that's how we try to structure it.

    Diane: No, you can't have anything about a screenplay in your book publishing contract. And if your book does get picked up for a movie option with a big company, there's very little chance they'd let you write the screenplay if you don't already have successful screenplays under your belt.

  • R. D. Allen

    >Hey, I've had this question for a while… I've heard that you should only talk about a single work in a query letter, but then I hear about people getting a three book contract. Is it normal to get a contract for more than one book, or is it rare? It is something they just do when they feel really good about a writer?

  • Judith

    >I signed my first contract early this year. I didn't have an agent, so I went to an attorney. There was nothing egregious in the contract, so I signed it and we are set for publication in a few months.

    However, I learned that I will never – NEVER – sign another contract without an agent. My current non-fiction is under query right now. Too bad it's not in your list of wants, or you'd have it post-haste.

    Thanks for your generous information and great good will.

  • Abby Minard

    >More great reasons to get an agent! I get so many friends who don't understand the business ask if I'm going to self-publish or epublish or go straight to a publisher myself. I always tell them, if I can't get an agent, I'm not publishing a book. I won't do it any other way. It's not about how much money I make, or how much goes to the agent, it's about getting my books out there so readers can enjoy them. And about not getting screwed because I didn't understand the contract or something. Thank goodness for agents!

  • Dianne E. Butts

    >Thanks for the answer and info regarding writing screenplays from novels, Rachelle.

  • Rhyanna

    >Hi Rachelle
    Thanks for posting this, it helps a lot. I do have a question, What if an Author wants to donate to military-those stuck on ships, subs, etc. Would the Publisher be willing to negoiate on this charitable contribution?
    I often see requests for books, audiobooks, etc.

  • Kevin Dillon

    >Great article/piece for aspiring authors like me who are constantly wondering if i should self pub or go traditional. Anyhow, sorry for such a capitalist/greedy question, but what is the traditional/usual price for the advance for first time author?

  • Rachelle

    >Susan Bourgeois: I don't know what you mean by your question: "How much future interest does an author have to relinquish in the negotiating process?" What do you mean by "future interest"?

  • Pingback: Snappoint

  • Pingback: Why I Turned Down a Book Deal (And the Lessons I Learned), Part 3

  • http://goodfinance-blog.com RatliffYolanda27

    Don’t you recognize that it’s high time to receive the loans, which will help you.

  • Pingback: Publishing Industry Terms and Contracts: Some Resources, and Some Advice

  • http://www.listamartie2.com Tyson F. Gautreaux

    I just want to tell you that I am newbie to weblog and really liked this web site. More than likely I’m likely to bookmark your blog post . You certainly come with tremendous stories. Bless you for sharing with us your web site.

  • Pingback: Guest Blog Post: Mustering the Courage to Turn Down a Publishing Contract

  • http://www.snoca.cn/snoca/forum/viewmember?member=LuzobvkCo http://www.snoca.cn/

    Very good info. Lucky me I came across your site by chance (stumbleupon).
    I’ve saved it for later!

  • Pingback: Subsidiary rights ~ what’s an author to keep? | Y.A. Scribbles and Scoops

line
Site by Author Media © Rachelle Gardner.