Pub Rants

Category: negotiation

If You Haven’t Got Anything Nice To Say…

STATUS: Springtime in the Rockies! It was 65 degrees and sunny today and I must admit, I left the office at 2:30 in order to take Chutney out for a run and enjoy the day. In exchange, I’m working all evening.

What’s playing on the iPod right now? TOMORROW PEOPLE by Ziggy Marley and The Melody Makers

Come sit next to me!

Last week, I pretty much spent every entry talking about contracts but today’s discussion tops the cake.

Just recently, a publisher made an offer for the next books from one of my clients. Excellent. But this publisher is also one of the big 6 that have announced that they are moving to the agency commission model for the sale of electronic books.

As ya’ll know based on my math lecture about net receipts last week, there are some key questions that really need to be answered about electronic books and exactly what 25% of net is going to mean.

So my contracts manager and I insisted on talking to contracts director before closing the deal.

The publisher’s response (and this is a paraphrase): they have no idea what the definition of net receipts will be and feel uncomfortable accepting the language we have put forth. Their suggestion? If the author would like to put the contract on hold until the company makes a corporate decision on this, then the author is free to do so. However, the publisher has no timeline for when this will be resolved.

Snort. That’s the solution?

Publishers. The world is changing. Quit dithering. We agents have to negotiate contracts now so maybe get on this. Telling us we can just put it on hold until you get your act together isn’t an alternative.

Rant over.

Agenting 101: When The No-Compete Clause Comes Into Play

STATUS: TGIF! Have a great weekend. I plan to.

What’s playing on the iPod right now? CAN’T GET YOU OUT OF MY HEAD by Kylie Minogue

Currently, Publishers consider non-multimedia electronic rights as part of the “standard” package of the grant of rights when buying a work from an author.

For years, I often held electronic rights (back when publishers weren’t paying attention to it) but now, publishers will walk away from deals unless eRights are granted. Very few authors, especially the new or the debut, are willing to walk away from an offer over a right that makes up such a small percentage of current overall sales—at least in today’s world. Who knows about 10 years from now.

But here’s another interesting tidbit. Let’s say you are successful in keeping electronic as a reserved right. Publishers are getting stricter in the language they are using in the no-compete clause of the contract and that language may make it impossible for you to exercise that reserved right.

I’ve talked about the no-compete clause here in my Agenting 101 series.

But just to jog your memory, here is a sample of language from a no-compete clause in a publishing contract (and since I lifted it from my previous entry, this language is easily several years old).

“During the term of this Agreement, the Author shall not, without written permission of the Publisher, publish or permit to be published any material based upon or incorporating material from the Work or which would compete with its sale or impair the rights granted hereunder.”

So what am I trying to say here? I’m telling you that even if you are able to reserve your electronic rights so as to as to set up your own deal with Kindle or Scribd (or whoever), your publisher could make an argument that sales of your reserved electronic right is materially damaging the sales of their licensed rights.

Ah, I see the light bulbs going off as you get what I’m saying here.

We’ve particularly seen this over the last two years when reserving comic book/graphic novels rights only to fight on the no-compete clause to make it even a possibility for the author to exercise those rights.

Unless you are embroiled in publishing contracts on a daily basis, very few authors make the connection of how these two very different clauses (grant of rights and the no-compete clause) clearly impact each other. Once again, I hope I’ve shed just a little light on it.

And on that lovely note, have a great weekend!

Agenting 101: Bring Back Term of License?

STATUS: Getting the blog done early so I can concentrate on a ton of reading today.

What’s playing on the iPod right now? NINE IN THE AFTERNOON by Panic! At The Disco

I’ve only been in publishing for close to going on 10 years. In light of some agents who have done this job since the early 70s, I’m a baby indeed.

But I have heard that back in the day, Publishers utilized a term of license rather than a term of copyright with an Out Of Print clause.

In fact, all foreign contracts use a term of license (5 years is common), with the exception of UK and ANZ (which stands for Australia/New Zealand) which often use an OOP instead.

What is a term of license? Simply put, a term of license is a clause in the publishing contract that states that the contract will expire 5 or 7 years from the date of the agreement and all rights revert back to the author.

In other words, no matter how well the book is doing, all rights revert on that date unless the publisher and author would like to renegotiate the terms and create a new contract with a new term of license.

Interesting, no?

In this rapidly changing digital age, a return to a term of license might be an attractive alternative. Whatever terms that are negotiated today will have to come up for renegotiating upon term expiration.

Some pros?
–There is a set reversion date no matter what.
–If the book does well, there is the possibility of renegotiation for better terms for the next agreement.

Some Cons?
–Most books, in general, go out of print in about 2 or 3 years via the OOP clause and rights revert. With a term of license, the out of print work could be tied up for 2 to 5 years longer than if there had been a sales threshold that triggered the reversion earlier.
–The next negotiation might be for lesser rates than what you locked in with your initial or previous contract.

Food for thought. Also, I don’t see publishers jumping on the “return to term of license” train anytime soon.

Payment Schedules

STATUS: All six contracts are almost complete. I’ll so drink to that!

What’s playing on the iPod right now? ELENORE by The Turtles

Over the weekend I realized my whole Friday entry was a bit cryptic if one didn’t know anything about payment schedules in publishing contracts. I’m pretty certain I’ve covered this in one of my prior entries (check out the Agenting 101 blogs) but what the heck, it doesn’t hurt to repeat it.

When a publisher buys a book, they don’t pay out the advance all at once (and probably none of you suffer from that assumption that they did, but I’ll state the basics just in case). No, when a publisher buys a book, they will stipulate a certain amount for the advance and then the payments are attached to what I call triggers—as in something contractually happens and a portion of the advance is paid.

Typical triggers can be these:

1. on signing of the contract

2. on d&a (delivery and acceptance) of a detailed outline
Side note: this happens often when a publisher is buying new books from one of their already established authors and they are buying on spec—as in nothing has been put on paper yet.

3. on d&a of the final manuscript

4. on publication of the work

5. on publication of a paperback edition

My favorite payouts are, of course, ½ on signing and ½ on d&a. Personally, when the monies are small, I really don’t see the sense in doing it otherwise. Now, I can understand when the advance pops into the six figures etc. but I don’t have to like it and I will certainly use all leverage possible to eliminate it. That’s my job after all—to get the best payout structure possible amongst other things.

Lately I’ve been seeing a lot of emphasis from Publishers to have payment in thirds rather than halves.

Of course I don’t lean that way either but I’m okay with it for the most part—if I can avoid the upon publ pym.

I’m sure y’all are sensing a mantra here. I’m not always successful and I imagine as Publishers dig in on this topic, it will be harder and harder to get.

Now as to Friday’s entry, what I meant by weighting forward is this.

What if the advance is 30k for one book. Payouts can look any number of ways.

If it’s in halves, that’s easy:
15k on signing
15k on d&a

If in thirds:
10k on signing
10k on d&a of outline
10k on d&a of full manuscript

Now let’s say you have to have the pym on publication and I can’t budge the Publisher on it. My job is to weight the payments forward.

Instead of equal thirds like this:
10k on signing
10k on d&a of full manuscript
10k on pub

I’ll try to weight monies forward:
12.5k on signing
12.5k on d&a full manuscript
5k on publication

And this can have a myriad of variations. I just did what was easy math.

Clear as mud?

Payments on Pub

STATUS: TGIF! I’m going to be so happy when all these contracts complete. That’s my new definition of happiness. That way I can get back to reading—which is the more fun part of the job.

What’s playing on the iPod right now? YOU LEARN by Alanis Morissette

I wish this issue would go the way of the dinosaur. I was talking with a few agent friends today and this topic came up—as it often does. Unfortunately, I’m convinced this one is stuck here for good so what to do about it.

Certain publishers are demanding payments on pub no matter what the advance is. (Cough—a publisher that begins with a “P” comes to mind). Other houses are more relaxed until the money gets into the six figures, then the upon pub payment rears its head.

Unless there is an auction going on. Then the agent can get the publisher off it because they want the book enough to be in an auction so will often be flexible where payout is concerned so as not to lose the auction.

If an author is big enough or established enough, well, anything is possible right? Not just no payments on pub.

But if you can’t get rid of it, what do you do? Well, we weight the money forward so as little money as possible will be paid on pub.

One agent did point out another factor I hadn’t really considered which is that an on pub payment allocates money in a different year as other monies in the contract (as publication more often than not happens in a year other than the contract). This can be better for authors in terms of paying taxes. This is true but it seems to me that taxes can be managed properly and most people would prefer the monies earlier.

I’m out.

Boilerplate Item Du Jour (take 2)

STATUS: TGIF! I have so much to do this weekend…

What’s playing on the iPod right now? CRASH INTO ME by Dave Matthews Band

The best defense is a strong offense.

What do I do about Publisher insistence on assuming that graphic novel rights is a boilerplate item? I immediately make it clear that it is not at the BEGINNING of each negotiation so there can be no misunderstanding early on.

That also establishes to the publishers that regardless of what they think, where my agency is concerned, graphic novel rights is not a boilerplate item.

I do the same thing at the beginning of a negotiation for a possible multi-book deal. Right when the editor calls, I announce that my agency does not do joint accounting so are we talking about one book or two?

And that takes it off the table right from the start. It won’t be a point of dissension for later.

Now graphic novel rights aren’t quite the same thing as joint accounting so I still expect a discussion or argument but my position is at least clear from minute one.

Have a great weekend.

Negotiation Day

STATUS: Today was basically a day of working on negotiations. Fun.

What’s playing on the iPod right now? PARADISE BY THE DASHBOARD LIGHT by Meatloaf

Whenever I have multiple negotiations going on, I take extensive notes on each offer. What has been covered, what’s resolved, what’s outstanding. It’s too easy to think an issue has been handled because you’re remembering the conversation you had with the editor who was on the phone 10 minutes ago and is not the editor for the deal you are currently discussing.

This is why I also like to confirm everything by email as well. Then there is a written record of everything discussed.

So some interesting stats on Negotiations

1. Agents rarely negotiate on the same day an offer is made (unless it’s a pre-empt).

2. Negotiations rarely conclude in one day. I would say the average length to negotiate a deal (as in the deal points—not the actual final contract) is 4 or 5 days—and that depends on if an auction is going to unfold or a pre-empt offered. Mostly is just takes that long to work out the language if there are special instances that need to be handled in the contract or just general questions that need to be answered before the real negotiation can even begin.

3. Negotiation can be involved but they are rarely contentious. Truly, it’s usually about two people discussing solutions on how both parties can get what they need. Usually that’s resolvable but not always. I’ve only ever had one editor yell at me during a negotiation and quite simply, I won’t deal with that person anymore.

4. The heart of the negotiation isn’t always about the advance. Trust me, it’s always about the money to some extent but there are certain contract elements that are more important to have (or not have) in the contract.

5. When to start a negotiation may actually be the most important factor to consider. Does one negotiate for a new project before the numbers are in for the current book or does one wait until those numbers are available?

And that’s a whole other discussion for another day.