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

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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35 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.

  5. Ariel says:

    Hi Helen, I’m hoping you can help. I’ve been offered a contract for my first book — on a topic of regional interest. They’re offering 8 percent net royalties only. This seems so little. I want to do the book, but I also want to get paid what my work is worth. What do you think — as a first time author, should I accept?
    P.S. The initial run is 1,000 copies.

    • It sounds low to me. What’s more important, however, is what do they want for such a low royalty. If they are asking for worldwide rights in all formats for the life of the copyright, then that’s a terrible deal. If they are offering a narrow license, let’s say a certain region and niche, and limit the rights to books and ebooks, and limit the term to let’s say 3 to 5 years, then the low royalty isn’t so bad.

  6. FM says:

    Hi Helen. I’ve been offered a contract with a small publisher that includes 12% royalties but no advance. A writer friend says her contract was similar. Is this a growing trend? Should it bother me? I like the higher % and can understand a small company not offering an advance in today’s tough market. But am I missing something?

    • FM, Yes, this is a growing trend among small publishers. If they are not offering an advance, then make sure the rights granted are limited to print and maybe ebooks. And if they don’t release a professionally edited and produced book within a stated time frame, such as one year, you may terminate the contract. Same if sales are below a stated threshold. Since the publisher is not making a financial commitment up front, you want to be able to get out of the deal if they can’t make it worth your while.

  7. Reverend says:

    Hello Helen, I received an offer from a christian publishing company for a children’s book that i submitted to them the other day. I had tried Harpers in the past and they never made me an offer, I knew that it was a long shot but I tried. I had consider self publishing for years but just did not think it was the best way to go. This publisher wants $1,XXX upfront and $2XX a month for so many months. I retain all rights and they only receive 5%. It seems to me that there are different tiers in the publishing industry. High end publishers that pay highly productive authors to write books, low end publishers that charge normal people to get their books published and promoted, and self publishing companies who will publish for very discounted prices but still charge for publication and promoting. This companies offer is 5 pages and seems very straight forward and includes distribution through secular and christian outlets as well as B&N, Amazon and more. I cannot afford to pay for my book to be published at the moment, but I am tired of waiting. I am tired of being a writer and not a published author. I would appreciate any advice.

    • Reverend, Any company that charges you upfront IS NOT a traditional publisher but is a vanity press or self-publishing company. Some of them call themselves “Christian” for marketing purposes only. I am not sure their business values are terribly Christian at all. So review their offer as if they were any other self-publishing provider. My guess is you could get the same services and distribution at a much lower price after you do some research.

  8. jim koris says:

    Hi,
    I recently sent to a large publishing co. 3 stories (novels) and they liked them. They asked me to prepay $3.300 to edit it one and other expenses. I can’t and don’t want to prepay any money upfront, are there companies that will do it for free, and then they can get that money from the sales?
    Thank you

    • Jim, You are correct that a traditional publishing company does not ask the author for money upfront.
      Any publisher who asks the writer to pay anything up front is not a traditional publishing company, but a vanity press pretending to be a traditional publishing company. If they are being underhanded about this, then I would not work with them.

  9. Zan Hollister says:

    Hi Helen, thank you for your time and service. I have been researching for quite some time, trying to decide if I should move forward with POD with Amazon Creative or… with traditional publishing. My question is… if I am qualified and willing to cover much of what a traditional Publishing Company offer’s in publishing a novel… except for the main one, the Big D. Distribution on the Big 5 major TP-ing companies level.

    Have avenues opened up for accomplishing Distribution on their level or… do they still hold that last edge over the market? If I chose to go with Amazon creative p o d but then later wanted to switch to traditional publishing, is that ever done or are you black listed with the big 5?

    One last question if you don’t mine. Where do TP-ing companies stand on making demands on changing content on your work and demands on production of future novels? Thank you again for your time.

    • Zan, Distribution (meaning printing and delivery of your book) is not difficult. CreateSpace and IngramSpark take care of that. It’s marketing that’s a never-ending challenge. Even if you get picked up by a major traditional publisher, they will expect you to do most of the marketing. It’s a rare author who gets the full marketing push. But being published by a traditional publisher could give your book a lot more credibility in the marketplace. That helps.
      Yes, self-published books are picked up by traditional publishers if they sell well. You would not be blacklisted.
      Regarding changes to your work, most publishers give the author the final say on content, but not on the title or cover art. And some will want options on future work, or may want a contract for a series. It’s negotiated on a case-by-case basis. It would be very exciting to be offered a multi-book contract. Go for it!

  10. An invaluable advice. Thank you, Helen.

  11. Jim Ellis says:

    Hi,

    Great post.

    A perhaps naiive question, but if I have multiple offers, should my agent tell each publisher who has made the offers? I’m sure an offer from Penguin carries more weight than a small indie…? Or is it a blind auction?

    Thanks,
    Jim

    • Jim, You should consult strategy with your agent. Legally, you are not committed to anyone until you sign a contract. But your agent’s and your reputation will be affected by how you handle this. Make sure you participate and discuss all this with your agent.

  12. Eva Monuer says:

    Hi Helen,

    I recently got a cookbook offer from a publishing company. They emailed me a deal memo and stated that my manuscript was due in April since publication is for December 2019. However, they are currently testing my recipes and have run into somw problems with a couple (doesn’t mean that they are bad as they worked for me and some
    Others to tried them). They basically said I cannot start working on the manuscript until they are done testimg and it’s makimg me worried. Is there a chance that the publishers and rescind their offer?

    • Eve, it depends on your contract with the publisher. Typically, if there is a deadline, the publisher has to provide notice of its intention to terminate if you don’t complete the manuscript within a stated period, often six months. And if they see that you are working on improving the book with them, they are likely to give you more time. But it’s best to read over your contract and discuss your concerns with the publisher.

  13. Erikka says:

    Excellent advice!

    I would appreciate your help. It appears a foreign publisher took our book out of print (they say the book is in print, but no one can find it and they didn’t send royalty reports showing sales). The rights expired last year but now they claim the right to sell their inventory.

    The remainders clause had no grace period, so wouldn’t sales have to be within the duration of the agreement (when the publisher did nothing)?

    There’s also a clause stating any rights not herein assigned now and in the future are granted to the Proprietor. Can I tell them the books have to be destroyed because they don’t have rights to sell them? Would they have the right to donate them or is that a form of selling at a loss?

    Thank you 🙂

    • Erikka, it would depend on the language of your contract. If it’s silent, then they have a reasonable time to sell off their inventory, which would be 6 months to a year. But you could take a more aggressive position and push them to have them send the copies to you or destroy them. It sounds like they have their head in the sand and are not dealing with this. Time to be pushy.

  14. Destiny says:

    I have a call scheduled this Monday with a book company (Koehler Books) that has read my transcript and has complimented my work greatly. This is my 2nd book, and my 1st book was supported self-publishing with iUniverse. I most definitely desire a traditional publishing contract. Koehler Books has a division called Battle Flag books specifically for military stories. My book is a military story written as a historical narrative…an untold story. How much upfront and percentage of royalties would be a decent amount?

  15. Kate Buffington says:

    I submitted a children’s book to a small publisher who denied it due to only having a limited amount of publishing for the year and encouraged me to submit it to someone else in the meantime. There was a reply button included in the email. Is it expected to reply as you would if this was a job interview with something like “thanks for your time”? Also, do publishers prefer using their own “in house” illustrators over illustrations provided by the author?

  16. Kate Buffington says:

    Thank you so much for taking time to answer these questions!

  17. Roxie says:

    I was recently offered a contract by a small, but highly reputable, publisher of children’s books. I immediately did a happy dance and took up residence on cloud nine. Now, two weeks later, I’m wondering if it’s too late to request a deal memo while I await a contract (per Jody’s advice). The editor told me up front that it would probably be several weeks before the contracts person sent me paperwork, but now that I’m thinking straight again, I’d really like to know what the publisher is thinking deal-wise, so I can prepare to negotiate. Thanks.

  18. Thanks for the tip on how much you need to pay and when if you work with a publisher. I really want to publish this action-adventure story that I wrote. I’ll look for a publisher that will take it and be upfront about their prices.

  19. Grateful82 says:

    This post and the comments section is just a treasure trove of information. Thank you, Jodi and Helen. This is a real lifesaver!

  20. Randy says:

    Hello,
    It seems like some people are getting the opportunity to author a book and not receive royalties yet will receive a flat rate; I have been approached by one company. I know you responded to this question in 2018 yet it is now 2021. I am hoping to negotiate a higher flat rate. Thoughts about this concept now?
    Thanks,
    Randy

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