Pub Rants

Category: Publishing Deals & Contracts

As featured in our April newsletter, an agent’s most important skill is the ability to negotiate well on behalf of the author client. Authors hire agents to protect their business interests in publishing. This is why a literary agent has a job.

Simply put, good agents do good deals on behalf of their authors.

So let’s discuss what I mean by “good” in terms of a deal and how that can be defined. Most writers might assume I’m talking about the level of the advance—as if how the negotiated amount is the only barometer of a decent deal. In reality I’m talking about every facet of the deal offer and the fairness and equability of the final contract the author signs.

Think of publishing as like a marriage or long-term relationship. It begins in love and happiness and for a lot of authors, the love affair lasts their whole career. But there is always the possibility of it ending in conflict and, in some cases, animosity. The point of the contract is to take the emotion out of the relationship and to clearly spell out the expectations of each party. This is why it’s imperative for an agent to negotiate a good deal and the best terms in a contract.

So just what are the negotiating tactics of good agents?

* Good Agents negotiate the advance.

A Publisher’s opening offer is not the highest advance the publisher is actually willing to give. Good agents know and understand this. It’s a bartering tool, the first give-and-take for what an agent is willing to grant and for what the publisher is willing to give in exchange. There are a ton of strategies involved here. This is just to spotlight one tactic.

* Good Agents only grant rights that are commensurate with the advance level being offered. 

If the advance is low, the agent will restrict the rights being offered to a publisher. A negotiation tool for getting a higher advance may be the willingness to offer World English or World rights in exchange for more monies up front.

Cliff notes for the types of publishing grants:

North American rights = publisher only has the grant of rights to sell the title in the US, Canada, and US territories such as the Philippines.

World English rights = publisher only has the grant of rights to sell the title in the English language around the world, including UK, Australia, New Zealand.

World rights = publisher has the grant of rights to sell the title in the English language around the world as well as to sell the licenses to have the title translated into other languages.

* Good Agents only sell World English or World rights if the subrights splits are standard. Otherwise, good agents restrict the deal to North American.

Standard splits, as defined by the Big 5 publishers, are 80% to author/20% to publisher for the UK and 75% to author/25% to publisher for translation. Some publishers (usually the smaller ones) only want to offer a 50/50 split, which is significantly less advantageous to the author than if his or her agent reserved World rights to license separately in each territory. (Remember: the author would then have to pay the agent commission on top of not receiving the standard 75% or 80% split. That’s definitely a reduction to the author’s bottom line.) I’ve also seen 60/40 (in author’s favor) offered.

* Good Agents don’t sell the publisher world translation rights or audio without reversion clauses.

If the publisher does not exploit or actively pursue the rights, the author is stuck and cannot earn money on the licensing of these potentially lucrative rights. Since part of an agent’s job is to help authors earn a living from writing, unexploited rights is untapped money potential. Publishers love “warehousing” rights just in case, but reversion clauses force publishers to actively try and license those rights or lose the ability to do so.

* Good Agents only sell rights or do deals with publishing houses that offer standard royalties or the equivalent (if royalties are based on net, which is the case for a lot of smaller publishers).

* Good Agents pre-negotiate “tricky” contract clauses in the deal memo stage so as to completely eliminate the issue at contract stage.

A favorite publishing house tactic, once the offer is accepted and contract generated, is to reply with “that should have been negotiated during the deal memo stage” as a way to say “no” to a requested change. To avoid this, actual clause language often has to be negotiated upfront with the editor during the deal negotiation. (“Tricky” clauses include the non-compete clause, the option on next book clause, the out-of-print clause, and many more).

It’s an icky strategy, as it’s not fair to the editor, who is often placed in an awkward situation. After all, they know deal points, not contract language. Sadly, this is becoming more and more standard.

* Good Agents have deal memo boilerplates that are unique to each house (and these deal memos are two, sometimes three pages long) 

Rather than use the publisher-generated deal points, which usually only cover the basics in an eight-point list and nothing else. Agency-generated deal memos cover all the tricky bits for that specific publisher, since contracts vary greatly from house to house.

* Good Agents have the editor confirm deal points memo via email before officially closing the deal.

This just came up for me recently where a deal was closed and went to contract stage, but the contracts department didn’t input the royalty escalator agreed upon during the deal negotiation. Because I had the final deal memo along with the editor’s confirmation email, it ended up being a simple non-issue, and the contract was changed. Without that confirmation, the author might have been stuck with lesser royalty structure.

Good agents could write a book on how to actively negotiate a publishing deal and contract. There are so many facets this series of articles can only touch on the highlights.

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The genesis: In January 2015, Backspace co-founder Karen Dionne and I had a conversation in which she mentioned that writers sometimes want representation so badly they are willing to sign with an average or even a below-average agent. Trust me, not all agents are equal. I replied, “Well, writers don’t know what they don’t know.”

In that moment, a lightbulb went on for both of us. Writers don’t know what a good agent does. How could you if (1) you’ve never experienced it and (2) you’ve only ever had one agent and no way to assess just how strong he or she might be at the job?

Thus, this series of articles was born.

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Archive:

February 2015 Newsletter – Article #1: Agent As Savvy Business Manager

March 2015 Newsletter – Article #2: Commanding Authority: An Agent’s Negotiation Edge.

April 2015 Newsletter – Article #3: Fearless Negotiation: An Agent’s Most Important Role for an Author

In a perfect world, every literary agent would be a fearless negotiator, working tirelessly to get the best possible book deals for his or her clients. But the world isn’t perfect. And sometimes an author’s career goes off the rails because their agent doesn’t have the knowledge, skills, or tenacity necessary to negotiate well on the author’s behalf.

Author #1 had a six-figure offer from a major publisher for the first three books of his self-published middle-grade series. He also had no agent. The publisher recommended several, and the author signed with one. Sadly, the agent did not negotiate better contract terms. This meant the author now had to give the agent 15% of the exact same six-figure deal he’d set up himself.

The author hoped the agent would earn his commission going forward by advocating for the book during the publishing process. But in time, the author realized his agent wasn’t doing anything he wasn’t already doing himself. He terminated the relationship and negotiated the next three-book deal without an agent.

As the time neared for the next contract, this author still felt he could get a better deal if a savvy agent negotiated on his behalf. He interviewed carefully and signed with an agent with an excellent reputation who was also a fan of the author’s work. The agent soon learned what the publisher hadn’t yet told the author: sales were soft, and there wasn’t going to be a third offer.

The agent pitched a new series, but the publisher wasn’t interested. Neither were the other publishers the agent submitted to because of the author’s declining sales record. He and the agent parted ways, and the author’s dream of supporting his family with his writing was over.

This author is convinced the outcome would have been different if his first agent had been a tougher negotiator—not only in regard to the size of the advance, but also in the thousand-and-one ways his agent could have run interference with the publisher to ensure that the author’s books got the in-house attention they needed and deserved. This agent may have been afraid to rock the boat, but it was the author’s ship that sank.

Author #2 was with an agent who always sold world and film rights to the publisher. Every client, every deal, without exception. Not every agency has its own foreign-rights department, nor does every agency partner with a foreign-rights co-agent in order to fully serve their clients.

In time, the author realized they had a problem. This author’s books were doing very well in the territories where they were available, but the publisher’s foreign-rights department had only sold them into a handful, and nothing was happening with film. When the author discussed the situation with their editor, the editor recommended the author get another agent—even though this meant the editor would have to work with an agent who was a tougher negotiator.

Not only did the new agent sell the film option for the author’s latest book, but the agent also made sure it was a “complete” offer, meaning that a producer, director, and screenwriter were committed to the project before recommending the deal. Previous film offers that didn’t have all these components in place were rejected because this agent was a tough negotiator who wasn’t afraid to hold the line.

Author #3’s agent got him a two-book deal with a well-known mass-market-paperback publisher. The contract included joint accounting. If you’ve been reading Kristin’s “Think Like an Agent” article series, you know that joint accounting can have negative consequences, as this author was about to find out.

When his first book published, it sold reasonably well. Meanwhile, the author was busy writing the second. To his surprise, the publisher rejected the book. The author wrote another, which the publisher also rejected. The author wrote a third book, which the publisher rejected when the book was half finished.

Are you keeping count? Two-and-a-half books written over who knows how many years in a valiant effort to deliver the second book of his contract. Meanwhile, because these two contracted-for books were irrevocably linked due to joint accounting, even though the first book was selling well, during all that time, the author didn’t see another dime.

If you’re wondering where the author’s agent was through all of this, so was I. Why didn’t the agent run interference with the publisher? Why was this author forced to spend years writing multiple books without getting paid for them? Surely there was something a savvy agent could have done.

The author wrote a fourth book, which the publisher finally accepted, only to drop the book after Borders went bankrupt. Eventually the author got the rights back to his books and self-published these novels along with the ones his publisher had rejected. All of his books have been very well received by readers, and the author is now with a small publisher with an excellent reputation. Most important, the author feels that his career is finally on track.

Admittedly, much of what determines the success or failure of an author’s career is beyond the author’s and the agent’s control. But holding out for an agent who is a fearless negotiator can be the author’s best defense in a challenging, uncertain business.

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Karen Dionne is an internationally published thriller author, co-founder of the online writers discussion forum Backspace, and organizer of the Salt Cay Writers Retreat and the Neverending Online Backspace Writers ConferenceShe is represented by Jeff Kleinman of Folio Literary Management. This panel discussion along with the full Backspace Writers Conference video archives are available exclusively to Backspace subscribers and online conference registrants. 

Get ready! A real rant I’ve been wanting to do for awhile.

First off, I want to make it clear that this is in no way a commentary or a critique of Michael Cader and his amazing Publishers Marketplace. I firmly believe that Cader, by launching the Deal Lunch feature of PM, has brought a ton of transparency to an industry that had very little before the site was launched in 2001. He deserves a big round of applause.

But I don’t think the general public realizes that deal announcements on Deal Lunch are based on the honor system. Agents report the information to PM and it’s not Cader’s job to fact check or police the deal announcements posted there.

And I know for a fact that some agents exaggerate or misrepresent the deals they post there. How do I know this? From conversations I’ve had over the years with editors about deals I was skeptical went for the money range represented in the deal.

Sometimes authors talk to one another (as well) and we agents get the real details about what happened behind the scenes of a deal. I saw a deal announcement recently that made me shake my head as I was privy to the deal details. The reality of it was definitely not reflected in how it was announced.

By the way, everyone in the industry knows this. I’m not blogging about a topic that will be a shock to any industry folks. Most of us just shrug and say “it is what it is.” But I think it does a disservice to aspiring writers who might rely on the Deal Lunch for an accurate picture of agents and the deals they do.

And the word that is most misused on Deal Lunch? The word “pre-empt.”

For the record:

* it is not a pre-empt if a project is only shopped or seen by one editor.

* it is not a pre-empt if the project is the contractual option material that the editor then offered for.

* it is not a pre-empt if there are no other offers made on the project. If there is only one actual offer, then it’s simply a regular deal.

Quite simply put, a pre-empt is an offer an agent accepts to keep a book from going to auction because there are multiple publishers interested in the work and there are multiple pending offers or multiple offers already on the table.

Any other use of the term is a misrepresentation of the deal.

So if you are an aspiring writer and you are using deal lunch as research, just remember to weigh all the information gathered there with a grain (or a big pinch) of salt.

 

 

 

 

Last month I gave a webinar on how Digital is rapidly transforming publishing.

I love giving this workshop at conferences every chance I get because most writers are completely confused by the stories that are making today’s headlines and how that impacts writers. It’s my chance to really explain all that is going on.

Attendees always walk away telling me that my workshop alone was worth their conference registration cost. (Of course they could just be humoring me…) LOL

Still, it makes me happy. I always want aspiring writers to be informed as much as possible.

We are doing something unique this month and making the recording available for streaming.

I know for a fact that some of my clients don’t actually read the final contract they sign. I also freely admit that this makes me nervous. No person should ever be so trusting, even though I know I do a heck of a job on every contract negotiation. I actually prefer that all my clients read their 25+ page contract from first page to last. In fact, I even welcome questions or any concerns a particular clause might raise.

Why? Because I’ve looked at that publisher’s contract a million times, and my familiarity with it might actually be a liability rather than an asset. It never hurts to have a fresh pair of eyes on a contract I’ve read three times before I send on to the client for signing.

Fresh eyes might be a fresh perspective, and a client’s questions based on his or her interpretation of the contract language might actually make me evaluate familiar clauses in a whole new way.

Not to mention, Publishers Weekly just ran a story called For Major Publishers, Will Print No Longer Be the Norm? In it, PW highlights that agents are concerned about publishers who no longer guarantee a publication format in their contracts. In short, publishers are becoming more hesitant to commit to printing a physical edition of your book–just in case they want to do eBook first or eBook only.

Well, a big reason a lot of writers are interested in partnering with publishers is because publishers offer the advantage of producing both print and electronic formats. And if a print edition is not guaranteed…well, that might change the author’s desire to sign a contract.

Luckily, we here at NLA have made it a standard to specify the production of a print edition in our authors’ contracts. It’s always a tough discussion, but we are sure to get publishers to guarantee that they will produce a print edition in the deal-points stage, before contracts are even drawn up. That way, the expectation is clear early on so the author can decide whether or not to accept the publisher’s offer. This has been our standard for years now, but I’m guessing that getting publishers to agree to it is only going to get tougher.

Thinking like an agent ensures that you read your entire contract. Word for word. And that you start thinking like a negotiator. What have you read about in the news lately that might need to be covered in a publishing contract? Maybe you’ve read about “subscription services,” which is quickly becoming a hot-button issue. If you see that, or anything else, in your contract that you don’t understand, have a conversation with your agent. It’s probably rare you’ll think of something that your agent hasn’t, but, honestly, you never know.

Fresh eyes can be a powerful tool.

Publishing contracts may not be my favorite part of the job, but I have to admit, they are never boring. Case in point, this past month I’ve been working on an Australian contract for one of my clients. All the requested changes had been handled; we were simply awaiting the final clean contract in PDF.

When a contract arrives, I always compare the signature copy to our master redline. Just in case. When a contract goes through five or more drafts, it’s likely something was accidentally added or omitted.

In reviewing this particular contract, I noticed one very small change in the Out of Print clause that hadn’t been present in any of the previous drafts. “The Work” had been changed to “The Works.” To make a long story short, and to diminish the narrative tension here, it was simply a drafting error on the publisher’s part. The final contract was corrected quickly but I highlight this error because the addition of an “s” radically changes the Out of Print clause.

Let me explain why. In OOP clauses, we include sales thresholds as one of the determiners of whether a title is out of print. For example, a contract may include a line that reads that if “The work” is has sold fewer than 250 copies in two accounting periods, then it is considered out of print.

This is a simplification of the whole clause, but it will give you the general gist of where I’m going.

If this contract happens to be for multiple books, then the addition of an “s” can have major consequences. If the line is changed to “The Works,” suddenly it’s not just one title that needs to sell fewer than 250 copies in two accounting periods, it’s ALL the works in the contract together that need to fall below the sales threshold.

As you can imagine, if the sales of more than one book are being counted in the total for the sales threshold, that will make it that much more difficult for the author to ever get his or her rights back. The definition for Out of Print has changed substantially.

To think like an agent, know that it’s not necessary for there to be a major word change in any given clause to radically change the contract. In this instance, one little “s” can change everything.

In today’s global digital publishing environment, negotiating a UK contract has now become equally as important as the home-court US contract. So if you want to think like an agent, spend as much time reviewing your UK contract as you do your US one.

Now that used to be easy. UK contracts traditionally have topped out at twelve or thirteen pages. A veritable reading breeze in comparison to the 25+ page marathons you get from US Publishers.

Not so any longer, from what I can tell. I’ve negotiated several UK contracts that are giving the US a run for its money in terms of length.

In fact, one UK contract’s out-of-print clause (a.k.a. the OOP) recently made me burst out laughing. The clause stated that a book would not be deemed out of print until earnings for that title, in all formats, added up to less than 75 pounds in two accounting periods.

Seventy-five pounds during a one-year period.

That is laughable, but I don’t think this publisher’s intent was to be funny.

Depending on the price point of the title (and let’s just say the average price in the UK is ten pounds), that would be the equivalent of selling something like eight copies, in any format (which would include high discount, special sales, premiums, book club, audio etc.) in one year.

Sheesh. I think a publisher would really be messing something up if they can’t sell eight copies of a particular book in a twelve-month period. Typical UK contracts set an out-of-print threshold of several hundred copies, so if you were going to do an earnings equivalent instead, it would need to be around fifteen-hundred pounds to be reasonable.

Definitely not a number you want to overlook!

In October, NLA implemented a new feature–a special News Alert eMail blast for subscribers of our newsletter. Today, a blast went out informing readers of how Harpercollins subscription service with Scribd will work and how authors will get paid.

Because my time is so limited these days (sadly!), regular or daily blog posts that alert readers about changes to publishing contracts and how that impacts authors just isn’t possible for me. But I am still doing great posts 2 or 3 times a months. Those columns can be found in NLA’s Monthly newsletter for our subscribers.

If you’ve been suffering from Pub Rants withdrawal, that would be the place to go to get your fix. Our eNewsletter is free. Just click on the Newsletter button at the bottom of our web page to sign up.

And for those of you who weren’t subscribers yet and missed that blast,  here’s the link to where you can see the news.

By the way, this is exactly the type of content I plan to tackle in tonight’s webinar:

Wednesday, November 13, 2013 at 6:00 p.m. Mountain Time.

THE NITTY GRITTY – HOW DIGITAL IS TRANSFORMING THE PUBLISHING LANDSCAPE.

There’s still time to register.

The auction has concluded. Wowza. I’m completely humbled. And trust me, I’m going to spend hours on this critique! The winner deserves that and more.

I don’t think Dave and company are going to believe me when I tell them how much money we raised on their behalf.

THANK YOU! I’ve said it before but y’all are awesome. If you still want to make a donation, feel free to. I haven’t closed that portal yet.

http://www.gofundme.com/3sgzis

First off, let me just say how AWESOME every single one of my blog readers is. You guys have just blown me away.

Right now my 50 page Manuscript critique with 30 minute follow up Skype session is at $2500. That’s crazy! And just FYI that the auction closes today (August 7) at 5 pm Mountain Time. As soon as it ends and there is a winner, I’ll be sending out an email to set up the date and time.

And for folks not bidding but just wanting to make a donation, we’ve raised $3240.00!

That’s $5740.00 total!!!

Dave, Jen, Jason, Rebecca & Timothy are just going to be stunned.

Big Hugs. People in publishing are the best.