Negotiating With a Book Publisher: 7 Deal Points to Confirm Before You Sign On The Dotted Line. (Guest Post by Jody Rein)

October 19, 2014

http://www.dreamstime.com/royalty-free-stock-photo-legal-contract-pen-image41000025Today, I am running a guest post by Jody Rein, a book publishing consultant, literary agent and former executive editor with Big 10, Big 6, Big 5 publishers in New York.  She shares some helpful advice on understanding and negotiating publishing contracts.

A traditional book publisher has offered you a contract—hallelujah! But…now what?

I always negotiate book publishing contracts in (at least) two stages. I recommend you do this as well.

Stage one: Agree upon the key deal points.

Stage two: Review and negotiate the actual contract.

Why Negotiate Before the Book Contract Arrives?

Every writer is tempted to scream “yes, send me the contract!” when a publisher comes calling. If possible…wait. Clear up the fundamental terms first.

  • You’re in your strongest bargaining position now–the “Deal or No Deal” part of the negotiation. The publisher is uncertain: will you walk if you don’t get what you want?
  • Book contracts are often more than 30 pages long and full of negotiable points large and small. Get the big stuff off the table so it’s not part of the give and take.
  • Time solidifies terms. The longer you let the offer sit, the more fixed it can get.
  • Better to learn early on if you can’t get what you want.
  • Contracts sometimes take time to be delivered. Agree on the main points and ask for an emailed deal memo from the publisher—no more “is this real?” anxiety while waiting.

 What if I Have an Agent?

Your agent will handle these negotiations, but you’re still the one signing the contract. Confirm each point with your agent when she presents the deal to you. A reputable agent will see reviewing these standard concerns with you as an important part of her job.

Seven Key Book Deal Points

 1.) Advance, both amount and “payout.”

Most traditional publishers will offer you a dollar amount to publish your book. Of course you’ll need to know how much—but you’ll also need to know when. Publishers don’t pay everything upfront—they hold on to the money as long as possible, often dividing the payment into 3rds or 4ths and paying out over years. Payout can be negotiable, but harder to change after set in writing on the contract.

2.) Who holds what rights?

Agreeing to “be published” basically means you license, to the publisher, the right to reprint your words in specific formats and places, and sometimes to license such rights to other companies (called “subsidiary rights”). This issue can get pretty complex and you don’t need to worry about nailing down every possibility upfront. But do know:

  • Is your publisher asking for the right to publish your book in every country (and language) in the world, or only in North America?
  • Is your publisher asking for the right to publish your book in digital/electronic form (ebooks) and audio form?
  • Is your publisher asking for the right to license your book to other commercial enterprises, such as to the movies, to tv and/or for products like toys and games?

 3.) What’s your share if you grant the publisher the rights above?

If you grant your publisher the subsidiary rights to your work how much will you be paid? What percentage goes to you and what percentage to the publisher?

You don’t need to get every possible scenario straight, just the biggies:

  • Percentage of ebook licenses
  • Percentage of translation licenses
  • Percentage of licenses to other English-language publishers
  • Percentage of audio/film/tv/merchandising licenses

4.) Royalty Shenanigans

Royalties are the monies you get as a percentage of the sale of each book, in any format. So you might be owed, for example, 10% of the cover price of every mass market paperback book sold. (You get this money only after the publisher has earned back the advance it paid you.) So a key part of the offer made to you will include royalties on:

  • Hardcover books
  • Paperback books (trade and mass)
  • Ebooks

A no-brainer,right? Here’s the problem—publishers put computations into their contracts that modify the royalties they offer. Most are not deal-breakers. But—one is.

What if there’s a stipulation that cuts every royalty payment in half? Sadly, several houses now pay royalties on “net” earnings.

“Net” means, they pay you net of key discounts. So if they sell your $10 book to a bookstore for $5, you will get your royalty on the $5 taken in by the publisher, not on the $10 cover price of the book.

Such payment plans may or may not be unfair; the bottom line of the industry has changed so drastically with the loss of bookstores and “gain” of Amazon it’s hard to know. But you must know the real basis on which you will be paid before you agree to the contract.

5.) What will your publisher publish?

Huh? Yep. You publisher may have the right to publish in any format. Once it was easy to compel a publisher to publish in hardcover first, today many authors have to live with uncertainty, not knowing if their book will even appear in print, or if it will be “published” only in ebook form. Now is the time to find out: can you obligate your publisher to publish in print? If not, can you live with not knowing?

6.) Consultations & Approvals

Important and often overlooked: If you ask for approval* early on– for example, of your final book title or cover design—you stand a much better chance of getting it into the contract. If this is important to you, cover it now; don’t wait.

*“Approval” means the publisher has to get your approval before publishing.“Consultation,” the fallback from approval, means they have to make an effort to get your input. Much better to have “consultation” than nothing if it matters to you!

7.) Any Obligations to the Author?

Over the past decade, “hybrid” publishers have sprung up—publishers who take on some but not all of the financial risk of publishing, promoting and distributing your work. For example, some ebook publishers will deduct the cost of converting the book from your initial royalty earnings. Other publishers may require you commit to purchasing some number of your own books. These are not necessarily unethical ways of doing business—but you must know upfront if these demands exist so that you can determine whether or not you find them acceptable.

Bonus question: What About the Option?

Many people will tell you to beware of the option clause—the one that says you have to show your publisher your next book. That clause can be full of onerous requirements (“wait 6 months after publishing to show us your next book;” “give us the chance to match any offer even if we say no”). I haven’t had problems getting rid of the bad stuff during the second stage of negotiation, so I don’t call it a deal breaker. But if it worries you, ask the publisher to chop it out up front.

Jody Rein is a book publishing consultant, literary agent and former executive editor with Big 10, Big 6, Big 5 publishers in New York.

She blogs occasionally at www.authorplanet.org/blog

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8 responses to “Negotiating With a Book Publisher: 7 Deal Points to Confirm Before You Sign On The Dotted Line. (Guest Post by Jody Rein)”

  1. Rose says:

    I appreciate all the info. trying to get a book deal. One publisher is interested but I was ask to come up with a $4000.00 publicist fee.Can’t I get an advance in this industry anymore. Please help

    • Rose, This does not sound legit. Are they requiring you to pay the $4000 in order to publish your book? If so, then I would not work with them. Something does not smell right.
      If they are a small press, and they cannot afford a large (or small) marketing budget, they should tell you that up front so it will be part of your decision whether to work with them. In that case, you might want to hire a publicist on your own, but it should be your choice and not part of the publishing contract.

  2. louis Schmidt says:

    I have been waiting for a first royalty payment promised four months ago. That in itself sucks but when I politely inquire the publisher is rude, tells me of yet another personal problem he’s having and this is why he can’t pay me and informs me that I am not a priority. (No kidding. Another way to put me in my place). So, now I am ready to report him. We have a contract and he has already broken it in so many ways. But, he is overseas and supposes this will stop me from taking action. Even if I can’t take legal action, I can certainly report him so that other hopeful writers won’t fall into this trap.

    • Louis, Sadly, there are many small publishers who have the best intentions, but have trouble running a business. If your publisher can’t pay you as and when promised, then perhaps it’s time to discuss severing the relationship. Less stress and frustration for both of you.

  3. Sydney says:

    Hello Helen,

    I’m an artist that hasn’t been shopping a book deal and a publisher approached me about authoring a book. After speaking to me they emailed me with more specifics of the book including a deadline for the work and offered a “flat rate” along with free books once published. There is no mention of royalties. Is it normal for a publisher to offer a flat rate and not mention royalties? Is it also normal for some book deals to not include royalties?

  4. joseph says:

    Hi

    My book is in evaluation, so I was asking that a book can be rejected while is in evaluation, or those are the chances that it might be published?

    • Joseph, Congratulations on getting your manuscript under evaluation by an agent or publisher (you didn’t say which). The majority of writers don’t get that far. Your chances of getting published are hard to predict. Getting published is always a long shot, but so worth the effort. I’ll keep my fingers crossed for you.

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