Pub Rants

STATUS: Spent a lot of time on the phone talking with editors today. That’s always fun. In fact, chatted via email with fellow Blogger and Random House editor Jason Pinter.

What song is playing on the iPod right now? FUNKY COLD MEDINA by Tone-Loc

Finally, a controversial topic! Bonuses are controversial? How so you say.

Well, there are two schools of thought where bonuses are concerned and I have to say that I fall somewhere in the middle between the two points of view.

Side 1
This side perceives bonuses as ghost money. A carrot in front of the author for performance but the actual bonus clause isn’t tied to a result the author can control.

Therefore, it becomes unlikely for the author ever to reach said bonus stipulation and makes the money included in the bonus a moot point.

Side 2
This side perceives bonuses as a failsafe. In the event a novel (or project) does extremely well out of nowhere, excellent sales numbers (or whatever—depending on how the clause is structured) can trigger bonus clauses which would result in additional advance money for the author before a project has earned out.

As I mentioned, I walk the line. I do believe that bonus clauses are ghost money. I NEVER figure them as value when negotiating for the advance.

I include them only when it’s very clear to me that the deal points aren’t moving anywhere else and I might as well include a back-end fail safe in the event a book does well.

On the other hand, included bonus clauses can be a detriment in later rounds of negotiations for future projects. Publishers might want to play the game of weighting the advance monies toward these bonus clauses that may or may not ever be triggered.

As an agent, you really have to stand tough against that.

And, if the author has a strong opinion about whether to include them or not, I always acquiesce to the author’s wishes because I can see the value of both sides.

Bonus clauses can come in all sizes or shapes. Common ones include these:
Net copies sold
Copies shipped
Movie/TV
Bestseller list appearances
Hardcover bonus
Awards

And every bonus clause has different aspects to them such as what would be a reasonable amount for net copies sold in 12 months, or the amount of copies shipped, or a time frame for when the movie is in production, or what position on the NYT or USA Today bestseller list and which award. Does being a finalist count?

Oh yes, a loaded question those bonus clauses.

STATUS: Busy. Busy. And then I was busy. I’m trying to get submissions out and finalize everything for my trip to New York next week.

What song is playing on the iPod right now? TIME The Alan Parsons Project

I’m talking about royalties, right?

Okay. Dig right in. I’m not going to go into details on these but you will have royalty clauses in your contract for all kinds of specialty things—like on copies sold for export to third parties. Mail order and direct response. Special discount sales. Copies sold to book clubs. Remainder-in-Place.

And then there is a whole clause on when the Publisher won’t give you a royalty such as on damaged copies or for the blind or for promotional use.

Royalties based on Cover price will look like this:

From yesterday, Hardcover:
10% to 5000
12.5% 5001-10,000
15% thereafter

Unless you are Stephen, Nora, or John. Chances are good you’ll have some better royalty percentages.

Trade Paperback is usually 7.5% flat rate but if you can get an escalation to 10% after 25,000 or 30,000 copies, great!

Mass Market
8% to 150,000 copies
10% thereafter

There are still some houses trying to squeeze a 6% royalty (and I’ve even heard of lower) but that’s so not standard so don’t let them convince you otherwise.

Standard Subsidiary rights splits:
They are usually 50/50 with these exceptions:
90/10 first serial (and, for clarification, the first number before the slash is to the author)
80/20 UK
75/25 Translation
66 2/3 Canadian

But as I mentioned before, I’ve seen all kinds of other splits and usually with the small or independent houses.

As you can tell, in contract negotiation, there is a lot of attention to detail. Random House also just revised their boilerplate contract and want to stick in a bunch of new clauses that aren’t particularly favorable to authors.

That’s why my contracts manager can be so valuable.

STATUS: There’s only enough time to do Payout comments on the blog today because I’m off to a wedding in Vail, Colorado. You know you are getting old when you stop going to weddings of your friends and start attending weddings of your friends’ children. Yikes.

What song is playing on the iPod right now? DRIVER 8 by R.E.M

I normally don’t answer questions on this blog (as you well know) and I’m not actually answering questions today but a couple of commenters raised some good points in the comment section and I wanted to add some thoughts.

A Payout schedule (of either 1/2 or 1/3) should not change—even with a multi-book deal. So fight for a fair split.

For example, let’s say we have a two book deal and we are doing payments in thirds at 15,000 per book.

Payout would look like this:

10k on signing (allocated 5k to book 1 and 5k to book 2)
5k on delivery of book 1
5k on acceptance of book 1

5k on delivery of book 2
5k on acceptance of book 2

That’s 30k total and only 5 payments. So, fight if the publisher is trying to space out the money in tiny increments.

And if a publisher insists on a payment upon publication, I always minimize the amount of money for that final payment.

For example, in this above scenario, I would weight the money forward so only 1k would be on publication (if I can swing it).

It would look like this:

14k on signing (allocated 7k to book 1 and 7k to book 2)
7k on d&a of book 1
1k on publication of book 1

7k on d&a of book 2
1k on publication of book 2

And here’s another thing I forgot yesterday. When you have an “upon pub” payment, you need to specify a “no later than” clause.

In the contract, it will read something like this:
$1000.00 on Publisher’s initial publication of the work

And you need to add these very important words, “but no later than 12 months following the acceptance of the manuscript.”

That way there is no excessive waiting for your payment if publication is delayed (not to mention there should be a concrete specified time frame in the contract for the Publisher to publish your work (as in within 12, 18, or 24 months from signing) and if they don’t, it’s breach of contract.

Off to the wedding. Have a great weekend.

STATUS: It’s raining in Denver. This is actually good news. In fact, it’s been raining consistently in the afternoons for the past 5 days. We are in a terrible drought so this is fabulous.

Do you know what else is fabulous? My author Jennifer O’Connell popping into a Stop-n-Shop in Boston, Massachusetts and seeing a copy of PLAN B on their mini-bookstore display.

Go Stop-n-Shops. Is that a perfect venue for a teen book or what?

What song is playing on the iPod right now? CONSTANT CRAVING by k.d. lang

Last night I had to blog in a hurry so I didn’t sum up some of the drawbacks to the dirty and quick advance formula. I need to highlight that here before tackling payouts.

The Q&D is simply a semi-educated guess because most of it is determined by numbers that may or may not be accurate.

Is 30% the discount? What would you, as a debut author, actually sell-through? What is the print run going to be? An editor can estimate and have it change drastically before actual pub time. The editor might not be willing to share that info and then you have to work off of knowledge of general print run numbers for mass market or trade paperback or hardcover.

And 8% is not the only royalty percentage in the contract. In fact there are usually 2 pages of various royalty percentages depending on import, export, Book Club etc. Using only 8% is actually fudging the numbers quite a bit.

Lot of non-solid numbers figuring into that “formula.”

Not to mention, that info was more for debut authors with no track records whatsoever. If you have been previously published, that throws in a whole new monkey wrench. Suddenly your publishing history needs to be taken into account (although you’ll have a pretty good idea of your sell-through percentages!)

Just a word of caution.

But onwards.

PAYOUT
This is the schedule the pub house will offer for paying your advance (and needs to be specified in your deal negotiation before the contract is finalized). Most often, payout is done in thirds.

And unfortunately, pub houses seem to be implementing a nasty policy that one of those thirds has to be on publication (which makes me wonder why it is then called an advance!)

So a payout can look something like this:

1/3 on signing of the contract
1/3 on d&a (delivery and acceptance) of the manuscript
1/3 on publication

Can you tell that the ‘on pub’ third gets my goat? If you have no leverage (as in, no other house is bidding on your project), you might get stuck with an ‘on pub’ payment. Best you can do is to shift the money weight forward to the other pay dates and get the least amount of money possible for the “on pub.” That messes up the 1/3 exact ratio but that’s okay.

There are a variety of ways to schedule payouts (depending on the project etc.) but avoid drawn out payouts (as in 1/4 on this and 1/4 on that so you have more than three payout payments) and other schedules can look like this so you should at least try for them:

1/3 on signing
1/3 on delivery of the proposal and first three chapters
1/3 on delivery of the full manuscript

I’ve done:
1/3 on signing
1/3 on delivery of manuscript
1/3 on acceptance

I’ve done:
1/2 on signing
1/2 on d&a
(LOVE that schedule and I always go for it if possible)

And I imagine it’s possible to get the entire advance upon signing but I haven’t had the pleasure of that—yet.

I’ve done a variety of others but I’m too lazy to go through my contracts to see what was what.

Remember, I only allot myself 15 to 20 minutes to write these blog entries.

STATUS: Yuck. I hate when a Wednesday feels like a Monday. Always a pile of stuff to do when I’ve been frolicking for 4 days instead of working. Also, I have to be somewhere at 6 p.m. and I didn’t get a chance to proofread. Sorry for typos etc.

What song is playing on the iPod right now? IF I EVER LOSE MY FAITH by Sting

Talking about advances is a loaded topic. I know all of you out in blogworld are screaming, “show me the money” but honestly, advance monies really vary depending on the type of project, whether it’s fiction or nonfiction, whether it’s romance, SF &F, or literary.

There’s just no unifying number range that I can give to y’all and say, “expect that much for your advance.”

So much of what is offered depends on how hot the project is and how many publishers are interested.

I’ve sold a debut YA title for a solid six figures and I’ve sold debut YA titles for the more standard advance (which is more likely to be between 10-25k).

All were from great writers. What made one worth lots of zeros and what made the others worth regular zeros?

Yep. No easy way to answer that question. It all depends on how hot the project.

There’s no hard, fast rule on what to expect for your advance when a publisher offers and an agent isn’t involved.

I’m going to give you a quick and dirty trick that will at least give you a general idea of what the editor should offer. This isn’t gospel though. Don’t be quoting back to me 6 months from now saying, “you said if I followed the silly thingie formula, I should expect to get offered XYZ.”

Advance monies depend on a lot of factors.

And I would strongly recommend that you start hanging out at publishersmarketplace.com and reading the deals on a regular basis. The site doesn’t post actual advance totals but will give you a general idea of the advance range.

Also, RWA is amazing about educating its members. So does SFWA and Sisters in Crime and places like Lighthouse Writers—who devote themselves to educating writers. If your project fits, join.

But I promised you a quick and dirty method. Here goes.

After the editor calls and has emailed you the deal points, you might ask for a bit more information. Ask for the format (as in, will it be hardcover, original trade paperback, or original mass market). Ask for the price point and ask for the estimated initial print run.

The editor had to run a P&L (profit and loss) statement and if you haven’t checked out Anne, the editor at TOR’s blog, do so right now. She actually has two blog posts where she literally breaks down how an editor does the P&L and decides what to offer for the project.

But back to a quick and dirty method.

Let’s say the project sold is a romance novel (because publishers offer all the time to unagented romance authors). It will be an original mass market (which tends to be standard). The price point will be $6.99 with an initial print run of 30,000 copies.

Royalty percentage is usually 8%.

Quick and Dirty Method (and yes, you must do a little math to get this)

What we are approximating here is how many copies do you need to sell to earn out your advance? When you get that number, you’ll probably have a really good idea what the editor will offer when she calls.

So, $6.99 x 30,000 copies is $209,700.00. 8% of that is $16,776.00.

Wait. They aren’t going to offer that.

Why? Because booksellers have discounts—and those can be anywhere from 20% to 6)%. You might even ask the editor what the average discount is.

Also, chances are good that the publisher might initially print 30,000 copies but most debut authors, on average, will sell-through anywhere between 50 to 90% of those 30,000 copies.

I know I said this was the quick and dirty method but hang in there with me.

Let’s pick 30% as the average discount. Let’s assume you are going to sell-through well or the publisher is optimistic and use 70% sell-through.

More than likely, your book will have a cover price of $6.99 (and yes your royalties should be based off of the cover price but that’s for a future blog—I’m just trying to get you to see what might be offered as the advance and hence this silly formula thingie).

At a 30% discount (which publishers are going to figure in on their P&L statements in a much more complicated formula than this), the book will be selling at around $4.99 (just to round up a little). With a 70% sell-through of around 21,000 copies…

Now you have $4.99 x 21,000 copies is $104,790.00. 8% of that is $8383.20.

Aha. The offer should be between $8 and 16k/ per book. (But if the project is a super sexy paranormal vampire romance and that’s selling like hot cakes, well, you should push for more. Knowing the market is part of this game as well.)

Of course, without an agent, they’ll probably low-ball you at first. Not to mention, some NYC publishers won’t offer this kind of money regardless of what the quick and dirty formula says (and if you join RWA, the members will tell you which publishers won’t offer above 5k no matter what).

Value of those organizations.

Like I said. This is just an approximation game you can play. I repeat. This isn’t gospel. This isn’t the truth. It’s just to give a ball park idea.

STATUS: I have to admit. I’m pretty much taking the day off but I have managed to drag myself to the computer to do this blog.

What song is playing on the iPod right now? LADY by the Little River Band

I have to say that explaining elements of publishing is the least creative writing I can think of. Why? Because it’s really not ranting—polite or otherwise—but y’all seem pretty excited so I’ll see how creative I can get with my explanation but I tend to like bullet points. Quick, easy, and to the point.

Now remember, this is a broad overview and not to meant to cover EVERY aspect. It’s just enough to give you some light working knowledge.

Isn’t it Alexander Pope who says, “A little knowledge is a dangerous thing”?

Please keep that in mind. Here we go. The grant of rights has two parts: 1) territory for print rights granted, and 2) other mediums where print rights can be exploited—otherwise known as subsidiary rights.

Territory

When a publisher calls to offer, basically, they need to explain where they want the right to print your work. There are several possibilities.

1. World Rights

This means that they have the right in all English-speaking territories (US, Canada, UK etc.) and that they also have the right to sell the work in translation (which means to sell the work to foreign publishers to be translated into another language).

If you are working without an agent, more than likely, the publisher will ask for World rights. This is not a bad thing—after all, they do have subsidiary rights people who can sell the work on your behalf and then you split the monies (and splits can be as good as 75/25 [75% to author and 25% to publisher] or 80/20 for UK but some publishers do 50/50 and I have seen 60/40 splits for translation).

2. World English

Publisher has the right to publish the English version throughout the world (and the main markets are US, Canada, UK, Australia)

3. North American Only

Publisher has the right to publish an English version in the US and Canada (and territories) only.

4. U.S. Only

Publisher only has the right to publish the work in the US. Author reserves rights to Canada and may sell that separately.

Subsidiary Rights

Print rights are valuable. There are many other mediums in which to exploit them. These venues are called Subsidiary rights and they can include the following:

1. Motion Picture/TV
2. Dramatic (which is plays or theater but sometimes we say Dramatic to include Movies and TV just to lump it all together)
3. radio
4. Commerical Merchandising (that’s products—like a doll or a cup holder)
4. audio
5. video
6. Calendar
7. Electronic rights (e-book)
8. Multi-media and/or interactive electronic rights (not the same thing as an e-book—and are almost always sold in conjunction with Motion Picture/TV because studios are evil and want to rule the world. Interactive e-rights could be a game made for a gameboy from your print work.)
9. US-Only Spanish Language

That’s the general explanation. Now, what most authors don’t realize is that these elements are your bargaining chips. What you will and will not give to the publisher really depends on the money being offered.

Always note that the first offer a publisher gives is never the final offer that they are willing to do. Never.

If they want all these rights, they should pay for it and increase the advance offer or the royalty percentages or something.

Now, they aren’t always open to changing the advance monies but if they aren’t, then you need to restrict the territory grant of rights and then of course, no subsidiary rights. (Hint: this is where an agent, and our years of expertise, really helps. We know what a project is worth, what publishers will pay what for it, what to hold, what to allow, where we can push).

I prefer not to give World rights (because I have a terrific foreign rights co-agent and I think we can earn the author more money selling them individually) but if the money is right, everything is negotiable in terms of territory. And if you are without an agent and want those rights exploited (and you, personally, don’t have the means), then it’s better to let the Publisher handle it.

For subsidiary rights, as a general rule, for me personally (and remember, I don’t rep all agents in the universe here), I never grant dramatic rights, merchandising, multimedia, radio, or Calendar.

E-book and Audio is all I’ll ever play with and once again, it depends on the money being offered.

Why? Most publishing houses are not equipped to really sell dramatic rights (although lately, many partnerships are being created to make this more viable), Either way, I would rather control this on behalf of the author.

As an author going forward without an agent, my recommendation to you is to never grant dramatic rights. If Hollywood comes a-calling, it’s easy enough to get an entertainment lawyer on board to help you through it. You want control over this medium and if you grant to the publisher, you’ll have no say (and trust me, it’s not like you have a lot of say to begin).

See my previous rants on Hollywood and dramatic rights.

Well, this post was as exciting as a root canal. Big grin here. If I forgot something, I’ll address it later. Onwards to tomorrow.