Pub Rants

The Importance of Leverage

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This is definitely a rant-worthy topic.

Publishing houses have implemented new corporate policies to pay advances in thirds—a portion of which must now be on publication.

The Penguin Group implemented this last year and a recent Random House negotiation showed me that it’s new policy over there as well. It’s lousy news for the authors and, as much as we would like, agents can’t just wave a magic wand and make such an unfair payment structure disappear.

I’ve talked to a number of agent friends—from independents to those at the bigger outfits—and the general consensus is that we get stuck with it unless we’ve got some leverage—leverage such as multi-interest, a pre-empt, or an auction situation going down.

Then we can eliminate that pesky condition.

Drives me nuts. It’s taking the “advance” out of the advance if you know what I mean. In a 2-book deal, the author might have to wait up to two years to see that final payment. It’s royally unfair.

But we aren’t miracle workers. Sometimes the best that can be done is to weight the majority of the advance to the earlier payments and get something minimal on publication because it’s pretty darn rare for an author to say NO to a deal on the table from the only publishing house that has offered.

11 Responses

  1. Anonymous said:

    Payment upon publication is nothing new in the freelance journalism world, and it sucks equally there, as does its cousin, also known as “the kill fee.” It all points to one thing, which you blogged about last week. DO NOT QUIT YOUR DAY JOB. Not unless you get enough up front on the book to invest and live off the interest for the rest of your life. There is no pot of gold at the end of this rainbow… sad, but true.

  2. Anonymous said:

    I got a $20,000 advance on a non-fiction book. Great for a first-timer, right? But as you note, it is from one of the Big publishers that now pays in thirds. After agency commissions, I got less than $6,000 up front for a book that took me a full year to research and write. If I hadn’t had other sources of income, I couldn’t realistically have written it at all.

    Two other, smaller publishers offered me a $10,000 advance, and I rejected it. Now I realize I’d have had the same kind of money up front either way. (If the book doesn’t sell, of course, I’d have a lower total amount, so it’s a bigger risk overall. )Maybe smaller houses will be more competitive if they pay upfront.

  3. bruno (btilgner) said:

    Hhmmm. Are we talking equal thirds? Front loaded? Back loaded? Seems to me what you could do as agents is agree across the board to push for a front loaded advance (at minimum), or make the argument to the publishers that due to the delay, they’ll have to pony up more per payment to cover the added expenses to the agencies (that’s assuming that if the authors are getting paid their advance in three lump sums the agents would also have to wait for their cut.)

    Both authors and agencies have overhead costs: research, staff, internet connections etc. Thus, you should feasibly be entitled to demand greater payments per advance based on the added hardship that such a standpoint by the publishers would entail.

    You might also be able to negotiate back to the original practice by using an (MFN) Most Favoured Nation approach as is used in international trade deals. (It’s amazing what you learn working in Foreign Affairs.)
    For example, you could state that if they choose payment in three parts each payment would need to be larger. If they choose the single payment route, your asking price could stay status quo. Advertize this. Approach those publishers who have maintained single payment status first with your best projects and make it well know to those publishers who have switched. Remember, if they’re not getting the books, they’re not publishing anything and, thus, bleeding overhead capital. You may not be as defenseless in this as you think. Anyyway, Hope you find this advice useful. Have fun reading my query. Trust me, I don’t lecture nearly so much in that…well, ok, maybe just a little.


  4. Faith said:

    The writers and agents are who keep the money flowing for publishers, but it seems like publishers just don’t stop to think about that.

  5. Anonymous said:

    Some MBA somewhere seems to have decided that the publishing business can adapt the JIT (Just In Time) manufacturing model to paying advances. Writers, after all, are just cogs in the machine that is the publishing industry. It’s the publisher who’s taking all the risk, right? Why should they front money to some creative type? The ROI is all backwards.

    It’s like the recording industry. The major labels (and some of the larger indies) are now writing into the contract a clause that requires that you give up a percentage of your merchandising (t-shirts, etc.) to the record company.

    Both models mean that every release has to be a hit, and you can’t afford to take time nourishing talent and growing new voices. Feh! That’s what I say, Feh!!

  6. River Falls said:

    You mean paying it in thirds isn’t the norm? I’ve been doing that for eight books now — 1/3 on signing, 1/3 on delivery and acceptance of the ms, and 1/3 on hardcover publication. I had no idea that wasn’t how everyone did it.

  7. Anonymous said:

    Not new to me either–certainly, some houses in RH have been doing it for ages, because when I left them for my current job, I was shocked to discover that my new company _didn’t_ require the payout in thirds.

  8. Jpatrick said:

    This is a sign of the times. If the market were different, those advances would be real advances. Authors MIGHT look at like this. The publisher can use the additional capital for promotion. Well-used, this could work well for all parties.