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Contract questions

This is actually a question asked in the comment threads at The Whatever, John Scalzi's excellent, although very snarky, blog.

Isn't there a negotiation process with publishers? Big advance, less maneuvering room with rights and such? Royalty percentages? Accounting schedules? Other contract particulars? I truly think there's more to a publishing contract than the cash up front.

And what about a book with a "meh" advance that actually gets decent marketing? Building a career with legs? Looking long term instead of just gimme the money now!

Maybe I'm a naïve git, but it's not so simple. Is it?

For the purpose of this discussion -- or monologue, as the case may more accurately be -- I'm going to assume that First Time Novelist (hereafter referred to as FTN) has submitted a novel to Large Publisher, and after waiting what seems an interminable length of time for the submission to be processed, said Large Publisher (hereafter referred to as LP), or rather, its representative, Harried Editor (hereafter referred to as HE), has picked up the phone, and made The Call.

"We love your First Book, FTN," HE will say. "And we'd like to make an offer for it."

There is very little that's as much fun as being able to call a FTN and give them this news. The FTN has an excitement and a screaming enthusiasm (and a voice to match) that no other novelist will rival.

Now, much of what I've said in this Journal has involved either a publisher perspective or a bookstore perspective. I've done this because I think that the writer perspective is something we all develop; it's the other stuff that we have less access to. I remember once, at a convention, one of the Del Rey editors came to work at our table. And every single time someone picked up a book from the table, she'd ask them what had drawn them to that particular book. It was almost excruciating, but it was a clear lesson: they don't know. Yes, I'm digressing.

Let's go back to HE and the offer. At this stage, FTN can do one of two things. She can say yes, or she can say a qualified yes, as in "My agent will call you." In my example, there is no agent involved, because if there were, HE would lose the joy of talking to FTN, and call the agent instead.

At this point, let's assume that FTN has no agent, and isn't ready to find one. She's happy, and she says yes before the offer comes out. And yes and yes and yes. But the HE waits patiently, and after a while, when English once again becomes the dominant mode of speech, the HE will offer a couple of things. The first, the money. "We'll pay an advance of 5,000.00, for a paperback publication" HE says. "For World rights. We'll pay half on signing and half on acceptance, with royalties of 6% for the first 150K sold, and 8% thereafter." (A bastard HE would offer half on signing and half on publication.)

The author can either say yes or no at this point. Most FTNs are just so jittery about possibly jinxing the deal, they say yes. But again, let's pretend that you've done all your homework. On the phone, at this stage, it's fine to say, "If you want World rights, I want 10,000." This is not, btw, a figure that will fly. But the HE will then either hang up politely and say they have to think about it, or, prepared for this, will say, "What about 6,500?" Alternately, FTN can say, "5K for North American rights only." Almost all houses will say yes to this, because most houses don't cling to foreign sales. The foreign market, while lucrative, isn't always easy to crack. Some companies will move a little on royalty rates. Some won't budge at all, agent involvement notwithstanding. For the FTN, there's no movement. The HE has your number.

In the end, FTN and HE will agree on a sum for NA sales, of 5,500, at 6% royalties, as discussed. This is the royalty rate, because pretty much no one is going to crack that 150K barrier.

And then the contracts take three months (if FTN is lucky) in their slow march through contracts, and eventually they do get sent.

You will note that marketing budgets have not been discussed. For FTN, they're not on the table. Nor have covers. Or placement. I've yet to meet an editor who will discuss the latter without someone producing a drill press first.

Okay. Now FTN is looking at contracts. Is there room for negotiation there? Well, yes. In the case of an agent, the HE will send the agent the agent's niggled down boilerplate. In the case of FTN, the HE has sent the standard boilerplate. What does this mean? It means they've sent the contract as is, the very standard, unchanged contract, with the appropriate sums of money, how they'll be paid out, what the royalty rates are as discussed, and what rights have been bought.

Except wait… some of the rights, such as e-rights, weren't mentioned in the phone call. The indemnity clause (which you can't change, and which is strengthened by some LPs with an additional piece of paper you have to sign as well), which makes you responsible for the cost of any legal defense your book requires. The reversion of rights clause, if they publisher fails to keep the book in print. There are more.

One question: Most contracts are VERY VERY long. And boring. Let me stress that. Very boring. I am however, willing to go and dig up an old first book contract and type it all in, discussing those clauses, if everyone here thinks they can take the boredom of having to read it. Vote below.

I haven't answered the questions, directly, that started this particular ramble. Let me now do that.

First books do not get a big advance 99.9% of the time. If they do, it's noteworthy, and becomes a marketing tool, something to garner both interest and buzz. A sale of 125K isn't huge by commercial standards -- but for a first book, it's out of the ballpark. The context defines the buzz. Because I'm dealing with the 99.9% of the case FTN, there won't be that big advance. In the case of FTN, there will be a small advance, with very little wiggle room, as seen above, in what rights the advance covers.

There will be no point in saying, "I'll take a lower advance if you give me marketing guarantees" because, face it, there is no lower advance. Ditto cover approval. You've got a "meh" deal. There just isn't room to negotiate much in the confines of that deal. Marketing budgets can be very high, as they often involve placement dollars, and those dollars? They're not going to go to your book unless there are highly unusual circumstances, again, the .1% of published authors first books.

Am I saying this is a living wage? Hell no. I'm saying it is what it is.

You can negotiate things like reversion clauses. Some houses don't care much, and some cling desperately, and you'll need to figure out by tone which case is true for the house you're working with. Boilerplate reversion is usually 7 years, with a one year or 6 month window after the out of print period in which you can demand that the book be reprinted or reverted. You can, at many houses, cut that down to a year, which is much more reasonable, and you can also make sure that "out of print" means something. This is wiggle room that you will have.

But while it's worth doing -- look at Daniel Keyes Moran -- in case of future need, it's something that many agents don't consider significant because if the book is out of print in that short a time, it wasn't selling anyway.

Yes, there is more to the contract than cash up front. There are editorial clauses that some authors don't like (they usually give LP free reign in the boilerplate). You can get them to ship you more authors copies than the number they usually offer (frequently 10). But all of those don't really mean all that much in the grand scheme of things.

What about books that are given small advances and a big push? It does happen. It has happened. It just doesn't happen bloody often, and there's no way to negotiate this for FTN. If the book develops legs, as they're called, if it gets a lot of reorders in the first few weeks, then you have some room to talk -- but at that point FTN will have already sold a second novel, often at the same contract terms because there's no leverage to negotiate anything different.

Yes, you could wait. But why? It would mean a delay of at least a year in publication, which means you'd have a two year gap between books. And if, for some reason, your first book develop legs, that gap can cut the legs right out from beneath you.

Wanting as much money as the publisher is willing to pay up front for FTN is not a bad thing. Because the money is small. Building a career will not be hurt by the up front money; you won't get them to go from 5K to 50K.

When you've got some leverage, this is different. But at the point where you do, you'll probably want an agent who has seen so many of these contracts, he has a good idea of how much he can then get up front.

So, for FTN, the answer is sort of: Yes, it is that simple.

As for the shitty deals mentioned, the 0K-3K deals, I just want to say one thing; I've already mentioned it on The Whatever, but if for some reason you're not reading it -- and why not? -- I'll mention it again here.

Short story collections are often handled as well by small presses as they are by large ones. The numbers that you can get out, for a collection, will be much smaller than the ones you can get out for a novel. Most authors don't have a huge fan base that is willing to spend the money on hardcover or trade for short stories, and if you want a short story collection, the small presses are the best way to go. Small presses have much more of a cash flow issue, and they'll of necessity offer as little as possible, because they just don't expect to do huge numbers. 2K are good numbers.

My attitude toward short story collections is this: I've been paid for those already. Reprints often pay a penny a word for most of us, and at 100K words, that's 1,000. So if the small press is offering more than that, and you've already gotten your 6-8K for the original stories, it's found money, and you often get a very nice book in the process. In this case, I'd say go for it.


( 44 comments — Leave a comment )
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Sep. 15th, 2004 12:18 am (UTC)
vontract vote - yes please
Hi Michelle,

I've recently friended you and am learning a lot from reading your posts. Thanks for taking the time and effort to educate me. It can be hard to get good insider info when I live so far away from the publishing heart of our field.

I would love to see an old contract dissected, if the votes warrant it.

Melinda from Australia
Sep. 15th, 2004 02:45 pm (UTC)
Re: vontract vote - yes please
It can be hard to get good insider info when I live so far away from the publishing heart of our field.

I would love to see an old contract dissected, if the votes warrant it.

Melinda from Australia

This is interesting because many of the authors being published at the moment are Australian; Australia has -- to my mind -- an astonishingly healthy Fantasy genre of its own, considering the size of its population (Canada can't claim anything like the same, more's the pity) -- something I only really grew to understand when I was serving as a jurist for the World Fantasy Award. There were a lot of HarperCollins Australian publications (as in, only in Australia).

In fact, Australia is becoming a foreign market in its own right, as opposed to an adjunct UK market. Errr, at least from a North American perspective <wry g>. Were I currently writing in Australia, and writing Fantasy, I'd probably submit to Australian markets because at the moment, what's being published in the Australian market is being looked at carefully by the NA market.
(Deleted comment)
(Deleted comment)
(no subject) - msagara - Sep. 15th, 2004 07:51 pm (UTC) - Expand
(no subject) - msagara - Sep. 15th, 2004 02:46 pm (UTC) - Expand
Sep. 15th, 2004 03:40 am (UTC)
contract copy
Michelle, if you're going to be typing in a contract with commentary, we'd love to post a copy on the SLF site (www.speclit.org) in the writers' section, for general edification. Let me know if you're willing.

I find this sort of thing incredibly helpful -- at my Clarion, Nicola Griffith went through both a standard TOR contract, in detail, and an old P&L statement (Profit & Loss), to show us where the money went. So illuminating!

- Mary Anne (director@speclit.org)
Sep. 15th, 2004 05:16 am (UTC)
If you have the time it would be very interesting to see what contract looks like. Interesting article as always!
Sep. 15th, 2004 06:43 am (UTC)
Re: Contract
Ditto. I'd be very interested. Thanks!
Sep. 15th, 2004 05:35 am (UTC)
Contract commentary
Count me as another vote for seeing the contract with analysis & commentary. Thanks!
Sep. 15th, 2004 05:57 am (UTC)
I'm all for the contract thing as well, assuming you have the time to do it.

Thanks for all of this, again. I'm finding it really helpful.
Sep. 15th, 2004 06:01 am (UTC)
My advice to the FTN: if you get an offer, get an agent to negotiate the contract, unless you're a) comfortable with contract negotiation, and b) familiar with publishing contract terminology.

If you have a definite offer, it won't be hard to land a decent agent (though best to have done your research first, so you know who the reputable agents are...)
Sep. 15th, 2004 07:53 pm (UTC)
If you have a definite offer, it won't be hard to land a decent agent (though best to have done your research first, so you know who the reputable agents are...)

My old advice was always to sell a book first, and then find the agent -- because that way, you could almost be guaranteed to find the agent of your choice; very few agents will say "no" to a contract in hand.

But... if the work and the agent don't mesh, it's problematic from the start (unless you take off), so part of me is easing off of this; I'm more ambivalent.
(no subject) - alfreda89 - Sep. 16th, 2004 10:21 pm (UTC) - Expand
(no subject) - msagara - Sep. 16th, 2004 11:14 pm (UTC) - Expand
(no subject) - alfreda89 - Sep. 17th, 2004 07:33 am (UTC) - Expand
(no subject) - msagara - Sep. 17th, 2004 07:15 pm (UTC) - Expand
(no subject) - alfreda89 - Sep. 18th, 2004 07:10 am (UTC) - Expand
(Deleted comment)
Sep. 15th, 2004 07:58 pm (UTC)
I think this is incredibly useful stuff, and please do go on if you have time -- it's stuff I knew absolutely nothing about when I started and am still less informed about than I'd like. I was definitely your FTN saying yes to everything, I'd probably have thrown in zorinth if they'd asked. Patrick told me in that phone call "Get representation. Get an agent." And that's why I have an agent, so I have someone who understands all this contract stuff for me.

I laughed out loud at this -- really, Thomas came over to see what I thought was so funny -- particularly the zorinth comment <g>. And pnh was really honourable here. Not only that, but he did get to make the "I want this book" call for your first book, and then leave the horrible bits to whichever agent you wanted to call in after the fact <g>.

I kept British rights for Farthing, because I think it ought to sell in Britain. (None of my other books are published in Britain. I was pretty sure they wouldn't be. T&C is under negotiations with German and Chinese publishers, but not British. I just don't generally write to a British mass taste, and I knew this.) Anyway, in keeping British rights, I also got to keep rights to a hilarious selection of other countries, most of them tiny islands. If a St. Helena edition ever comes out, I'll let you know -- and as for Pitcairn Island, I think I could email it to everyone there in one cc...

That's funny; I would have said that your books would have done well in the UK, so it shows what I know. But yes, keeping World rights means that you do get a huge section of smaller markets -- apparently, the UK sale (for a North American book) seems to clinch the rest of the foreign markets; if it sells in the UK, it's much easier to sell elsewhere, and if it doesn't, it's more hit and miss. This from an agent, as I've no experience with any direct foreign sales at all.

Mine? They're almost all too long :/. John Jarrold loved OATH, but had a coronary when he saw how long DEATH was (1100 manuscript pages); it was the only time I really wished I'd broken that into two, or written it shorter, but it was a dense book as was.
Sep. 15th, 2004 07:02 am (UTC)
I also think the contract breakdown would be incredibly useful.

Laura Resnick did an article a while back on negotiating novel contracts that I sort of filed away for future use, despite all the disclaimers in it.
Sep. 15th, 2004 07:22 am (UTC)
What a great article! I'm linking it now on another board that's fighting against terrible contracts (including the dread Publish America.)
(no subject) - msagara - Sep. 15th, 2004 02:50 pm (UTC) - Expand
(no subject) - kate_nepveu - Sep. 15th, 2004 04:41 pm (UTC) - Expand
(no subject) - msagara - Sep. 15th, 2004 05:07 pm (UTC) - Expand
(no subject) - kate_nepveu - Sep. 15th, 2004 05:32 pm (UTC) - Expand
(no subject) - msagara - Sep. 15th, 2004 08:00 pm (UTC) - Expand
Sep. 15th, 2004 07:07 am (UTC)
All of this is stuff I'm reading avidly and filing away for future reference--but I find your take on collections exceptionally pragmatic (pragmatic to the point of brilliance).

Ok, brain is buzzing. Must do other things now.
Sep. 15th, 2004 07:37 am (UTC)
Kirsch already did a wonderful clause-by-clause dissection of a book contract (Kirsch's Guide to the Book Contract), and it's a reference I think every writer should have on their shelves. I have no doubt yours would be as interesting in a different way, but I'd encourage people to read the book and let you save your fingers for other things.

If you have personal stories about any of the stand-out clauses, I'd be curious to hear those, though. :)
Sep. 17th, 2004 07:22 pm (UTC)
Kirsch already did a wonderful clause-by-clause dissection of a book contract (Kirsch's Guide to the Book Contract), and it's a reference I think every writer should have on their shelves. I have no doubt yours would be as interesting in a different way, but I'd encourage people to read the book and let you save your fingers for other things.

If you have personal stories about any of the stand-out clauses, I'd be curious to hear those, though. :)

I think I read that one -- it was a great explanation of what most of the clauses in the contract meant, but again, I found the advice uneven because of what could reasonably be attained, as opposed to what should be attained, when it came to negotiations. He was very explicit about the pitfalls of many of these. I'll address (if I remember) some of this in the Post-Contract Round Up Post.
Sep. 15th, 2004 07:55 am (UTC)
I vote yes please on the contract. I promise I will read every boring word. :)
Sep. 15th, 2004 08:12 am (UTC)
Please do go on!!!
I find just about everything you talk about relating to the publishing industry both relevant and interesting. I would love to see you post an old contract and comment on it. I would be most appreciative if you had the time! =)
Sep. 15th, 2004 09:25 am (UTC)
Adding my voice. And adding my voice to letting Mary Anne put it up for SLF. Also, thanks for the book recommendation. Its now on my amazon wishlist

Sep. 15th, 2004 08:04 pm (UTC)
And adding my voice to letting Mary Anne put it up for SLF. Also, thanks for the book recommendation. Its now on my amazon wishlist

I did talk to Mary Anne (well, sent email); at this point, I'd prefer to just have her link here, because I think people expect less authority in some respects from a LiveJournal post than they do from a post on a more formal repository. And -- I've mentioned this, I know I have -- I'm lazy enough to want to be able to just meander and ramble discursively, and if it felt as if I had to in any way be definitive, it would be like work.

I like LJ because of it's informality; I don't mind people linking to anything I post here because obviously it's not locked in any way -- but again, I think being under the LiveJournal banner implies a certain lack of formality, or a certain "personal" element that makes it seem less definitive.

Willing to be talked out of this, though, if points are raised in refutation of these concerns.
(no subject) - zhaneel69 - Sep. 16th, 2004 09:10 am (UTC) - Expand
Sep. 15th, 2004 12:19 pm (UTC)
Don't need to see contract, you don't want to know how many of those I have sitting in the files. Would be interested to see commentary though it may need to be on many rocks.

On payout schedules: There is a movement (Tor really pushes for it) to pay a third on signing, a third on delivery, and a third on publication. This really sucks from the viewpoint of making a living in this biz (and low "Shut UP!" level is still not enough for that--you need a couple of those a year; if you're dreaming of writing a book a year or every other year and making a living at this, now is a good time to get real). FTN probably will not budge the publisher who is insisting on this.

Then there is the Harlequin model, which is really interesting: half on signing, a quarter on approval of proposal, a quarter on delivery. If you can do outlines/proposals/synopses, it's a plum deal. If you can't, it's anguish city. They have an odd system in general and some very difficult contract clauses; there are dealbreakers in there that are not in other contracts. They will fight like fury to keep world rights.
Sep. 15th, 2004 01:18 pm (UTC)
Expand? Does this include LUNA?

Could we maybe get MSW to do a comparison of the LUNA (general) contract and a FN contract?

(no subject) - msagara - Sep. 15th, 2004 01:56 pm (UTC) - Expand
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