Michelle (msagara) wrote,

Contract clauses 9 and 10

Now we get to clause 9 & 10. These are probably the clauses that everyone is curious about. Well, okay, more curious about.

So… in order to keep you all in suspense, I'm going to go on a bit about why I'm actually doing this. One: Because I want to. Two: Because contracts are something we all talk around as if they were somehow vaguely unseemly -- we can use innuendo, but not hard fact. I understand this. I even understand why, to a certain extent, this is true. It's very, very hard for FTN not to compare him or herself to other FTNs. If things are vague, and numbers aren't mentioned, than some useful information can be exchanged, but no one is crabbing. But the usefulness of that information?

Take the SFWA model contract. It's a lovely model contract. I really like it. Is it useful for FTN? Not really, imho. People like Ray Feist, who taught us all a lot when GEnie was still active, was also making way into the 6 figures when he was teaching us what we should all be fighting for, and what he could easily achieve, we could only achieve if we had the editor's photos. As in blackmail photos. And maybe not even then.

Plus, I can refer to things. Rather than trying to explain them. Because they're laid out in clear English. Yes, I said that with a straight face. Why do you ask?

I think that what I'm slowly putting up is indicative of an average first contract for Science Fiction and Fantasy genre novels with a regular publisher. I cannot stress this enough. I was shocked when I found out that publishers regularly start romance writers at 4% royalties, given their numbers in comparison, for instance, but I can't speak for Romance contracts because I've never signed one. Or YA contracts. Or, in fact, any contracts but my own and the ones I've seen from other houses by authors who are also -- not surprisingly -- writing in my field. There will be marked similarities between these and many other first book contracts in other genres -- but there will be different types of wiggle room, I think, in each line.

Are these the same as the contracts I'm signing now? No. But what I'm trying to do is offer information to people who are putting their toes into the water for the first time. And if I'm trying to do that, I might as well be complete.

I do get the distinct impression, though, that some people find this almost shocking. Why is that?

Anyway, onward.

Advance Payments

9. Publisher will pay to Author as an advance against and on account of all sums accruing to the Author hereunder the sum of $7,500.00, as follows: $3,750.00 on signing hereof; and $3,750.00 on acceptance of the complete and satisfactory manuscript of the Work in accordance with Paragraph 1. Author shall not be required to repay such advance except as specifically required by the provisions of this agreement or if Author is in default of the obligations hereof.

This is straightforward, and it's standard. Half on signing. Half on delivery (of an acceptable manuscript). As I said elsewhere, you can be offered the sum in any number of ways, but you should be able to get them to pay you a two-split for advances at this level. For 80K or 100K? Not so simple. But this is small money in comparison.

And you'll note that a living wage, it's not.

Royalty Payments

10. a. The Publisher agrees to pay the Author a royalty on the retail price *or, for any hardcover copies, on the invoice price (see Paragraph 28)* of each copy of the Work sold by Publisher, less returns (subject, however, to the provisions and exceptions in this agreement set forth below:

I had a little fit when I first saw the additional text -- but I was reminded that "invoice price" and "net" were not the same. The invoice price is a funny thing, and I haven't seen it done at all in recent years -- but a number of years ago, for reasons I'm not clear on, the actual cover price was about 50 cents higher than the retail price on the invoice. The invoice price referred to would be the 29.45, rather than the 29.95 that was printed on the dustjacket of the book. I'm sorry I can't tell you why -- for some reason, I didn't think to ask a rep, and it didn't last all that long, at least in Canada.

i. With respect to copies sold by Publisher in a mass market softcover edition six percent (6%) up to and including 150,000 copies; and eight percent (8%) for copies sold in excess of 150,000.

Below, in the question I grabbed from Scalzi's blog, the author in question said they'd managed to get 8% for their royalty rate (from Bantam). My agent at the time thought it wouldn't be difficult to get 8%, but the publisher in this case would not budge. Oddly enough, the publisher the author below is dealing with is the publisher my agent at the time most frequently dealt with. He didn't have a lot of clients at Del Rey then. You can negotiate different splits -- I think you could probably, in this day and age, argue it down to 100K, and have even seen that. In either case, it's generally theoretical; these numbers are after returns.

So, practically speaking, my royalty rate for this sale was 6%.

Of the things in the contract that I'd really want to push for, 8% royalties is probably the biggest.

ii. With respect to copies sold by Publisher in a trade softcover edition seven percent (7%).

This is boilerplate. The boilerplate here differs from house to house; I've seen as low as 6% to 25,000 copies, going up to 7.5 after; I've seen 7.5 going to 8.5 after 50,000 copies. I don't think we even tried to change this, because we couldn't see it happening, and it wasn't worth niggling about. You could probably -- and should, depending on who you're publishing with -- move this up some, but you won't have a lot of leverage. It's an argument worth having if you think there's a likely chance these terms will actually apply to you. Trade paperbacks always have low royalty rates compared to hardcovers.

iii. With respect to hardcover copies sold by Publisher ten percent (10%).

This is sub-average. Because there was no way this was going to be published in hardcover, it also wasn't worth arguing about. Otoh, had we wanted to argue about it, it would have been fairly easy to change it, imho. But, choose your irritants (I would say battles, but this just doesn't qualify).

The standard boilerplate clause I've seen otherwise breaks down like this: 10% for the first 5,000 copies; 12.5% for the next 5,000 copies and 15% for all copies thereafter. Of the retail price (or in the case of this contract, the "invoice" price). If for some reason, you feel you're going to be published in hardcover, than it would be good to revert to the standard boilerplate, rather than the substandard one I got.

b. If the Work is published in more than one of the formats described in paragraph 10(a) above, the applicable royalty set forth in this agreement shall apply separately to each such publication and in determining increases in royalty rates based upon whether particular sales levels have been reached, only sales in such format of such publication for which a royalty is payable under the provisions of said paragraph 10 (a) shall be included.

c. One-half (1/2) of the prevailing royalty rate with respect to hardcover copies and with respect to softcover copies of the amount received by Publisher for copies sold directly to the consumer through the medium of mail order, coupon, radio, television, or space advertising, or through Publisher's own book clubs.

d. One-half (1/2) of the prevailing royalty rate with respect to hardcover copies and with respect to softcover copies of the amount received by Publisher for copies sold by Publisher (i) as premiums to commercial purchasers for use in connection with other goods or services, (ii) to governmental agencies, (iii) to book clubs, (iv) outside usual wholesale and retail trade channels, or for more than manufacturing cost but at less than the regular wholesale price, or at a discount of more than 60% from the United States invoice price (see Paragraph 28) and (v) for use of plates or film by a governmental agency. All sales subject to this sub-paragraph 10(d) are herein referred to as "special sales".

e. One-half (1/2) of the prevailing royalty rate with respect to hardcover copies *of the invoice price (see Paragraph 28)* and with respect to softcover copies of the retail price for copies sold by Publisher for export outside the United States, its territories and possessions.

f. No royalties shall be payable for any copies sold at or below the cost of manufacture. The royalty payable on "remainders" sold by Publisher shall be 5% of the amount received by Publisher, except that no royalty is payable as to any such remainders sold at or below the cost of manufacture.

These last clauses are pretty self-explanatory. I'm not in love with e), and if I were going to do it again, I might try to change that. Maybe. I've never seen a lot of special sales on my royalty statements, though -- so it's not something that I'd personally be getting an ulcer about.

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