by Joseph Perry
You finally received the call from your agent that you’re going to be a published author.
All the hard work and months (or years) of attending workshops, writers’ groups, and revising and revising again have paid off. As excited as you may be, the next step, negotiating the publishing agreement, may give you nightmares. You’d rather sign and be done with it, but I’d think again.
The contract is written in the publisher’s favor, and if you’re not careful, it could lead to headaches down the road that can be avoided before signing.
Out of all the provisions in a publishing agreement, I’m routinely asked about the grant of rights, advances, royalties, and option clause. Below is a summary of those important provisions in your book.
Please note that the information below is not intended to be legal advice and should not be taken as such. If you have any questions, contact a publishing attorney near you.
Grant of Rights
The grant of rights is the provision in your agreement that acts as a map to the rest of the contract. As the author of your book, you are given a set of exclusive rights per Section 106 of the US Copyright Act, such as having the exclusive power to:
- reproduce (that is, make copies) your book;
- create derivative works based on your book;
- distribute your book;
- publicly display your book; and
- perform your book publicly (think adapting your book for the stage).
As the copyright owner, you have the power to determine who you want to transfer these rights to. To publish a book (unless you are a self-published author), you have to transfer the reproduction right above. That can happen in two ways: granting the publisher a license or assigning the publisher the reproduction right.
Licenses are rights that are granted to a third party. There are three parts to a license that you need to consider:
- Exclusive licenses vs. non-exclusive licenses.
An exclusive license means that the party you are granting a right to is the only one who can execute that right. Non-exclusive licenses mean just the opposite, where you can transfer a right to multiple parties at the same time.
However, most publishers won’t accept a non-exclusive license.
Can you blame them? Why would Simon and Schuster accept a non-exclusive license, when you can turn around and go to their competitor HarperCollins and sign another license to publish your book? There would be two competing books, and no publisher wants that. Thus, most licenses you will deal with in publishing will be exclusive.
Next you’ll need to determine the territory that is best to execute those rights. In the US there are three basic types of exclusive deals:
- US or North America (exclusive English language control in the US or North America)
- World English
- World All Languages.
Most publishers will ask for world rights in all languages. But your agent (or lawyer) will determine what is best for your book. Perhaps your agent thinks your book may be a hit in the UK, and he or she only wants to grant the US publisher rights domestically, so he or she can negotiate a contract in the UK. Context matters.
Finally, you’ll see that the term of the license is likely for the life of the copyright in your book, which is for your entire lifetime + 70 years according to the US Copyright Act. Before you start freaking out that you’ll be under contract with the publisher until your grandkids are your age, don’t worry. There are other mechanisms, such as reversion of rights and out-of-print clauses, that can help you retain your copyright.
Assigning your rights means that you give everything away to a third party with regard to that particular right, and that you are no longer in control of what happens to your work. Most publishers will have in their standard boilerplates that you assign to them your right to publish the book.
However, you can negotiate this down to a license.
Once again, context matters. Academic publishers, for example, have assignments in their contracts per industry standard. That is because most authors are professors publishing their books to obtain tenure and may not exactly care about what happens to their work after publication. This is usually not the case with trade publishers. Nevertheless, talk to your attorney and agent to determine what course is best for you.
You may ask if you can terminate the assignment. You can via certain provisions in the US Copyright Act, but that is a blog for another day.
Regardless if you license or assign your publication right, ask your agent or lawyer to reserve any rights you don’t grant, so that they belong to you.
What do most people care about in contracts? You guessed it: money. How are they going to get paid? When are they going to get paid?
Advances are payments made to you before your book is published. That is, the publisher literally “advances” you money against future book royalties. This started because authors needed to earn money in between signing their book contracts and their publication dates.
Most publishers pay their advances to authors in 1/3’s or 1/2’s.
Below is a typical payment schedule:
- Upon signing the publishing contract.
- After delivery and acceptance of your manuscript that is satisfactory to the publisher.
- On the publication date.
Some publishers will pay your advance via the first two events. The first and third events are easy enough. Sign the contract, and publish the book, and you get paid.
The second event, however, is more perilous.
“Acceptance” of a manuscript means that the publisher has indeed read your manuscript and, in its sole discretion, deems it publishable.
An example best illustrates this concept. If you sign a publishing contract for a 100k-word fantasy novel and send the publisher ten pages you wrote over the previous nine months, your manuscript won’t be accepted. Nor should it.
The main obligation under your contract is to write the book, and you didn’t uphold your end of the bargain. However, if you send a 110k- or even 90k-word novel, as long as it resembles what you promised, that should be okay (editors can always ask to add or subtract words).
Again, context matters. The main takeaway is that you won’t get paid until the publisher “accepts” your manuscript, so do what you’re obligated to do, without violating the rights of others (think defamation, copyright infringement, etc.), and you should generally be fine.
Royalties and Subsidiary Rights.
The big question on everyone’s mind besides the advance: when do I get my royalties? What percentage are they? Are the numbers good?
I’m not going to go into a deep dive here, but there are a few things you need to know:
- “List” royalties vs. “net” royalties. List royalties are easy to calculate in that they are based on the book’s retail price (for example, a 10% royalty on a $10.00 book is $1). However, it gets complicated when you have “net” royalties because these royalties take all of the publishers’ expenses off the top before arriving at your royalty payment. You should ask your agent or lawyer to see if they can narrow down some expenses (for example, photocopying). However, it may be difficult to do such a thing since definitions in the contract are set in stone. Instead, ask your agent to see if your net royalty percentages can be increased (an equivalent net royalty is usually twice that of the list price)
- Approximate royalty and subsidiary right percentages:
- Hardcover – 10% – 15%
- Paperback – 6-8%
- E-book – 25%
In addition to these royalties are “subsidiary rights,” which are “subsidiary” to the “primary” right of publishing your book. Some examples (and the royalty share between the author and publisher) are:
- Translation – 75%/25%
- Audio – 25%
- Book club – 90%/10%
- Performance (book-to-film) – 80%/20%
- Dramatic (book-to-stage) – 80%/20%
Before giving up these rights, see if your agent (or attorney) can separately negotiate these rights for you (for example, book-to-film adaptations). This means more money and revenue streams for you.
Most publishers will request that they get the first crack at your next book.
If you don’t like that, you can always ask to strike the provision. But more likely, you can ask them to narrow down the parameters of this provision (for example, if you’re a nonfiction writer or novelist who writes several genres, you may want to request that the option is only for a certain subject or certain genre).
Moreover, publishers will want to have an incredibly long time to determine if they want your second book (sometimes up to a year after publication of your first book). Ask your agent or lawyer to narrow this time period. There is no reason why you should have to wait up to an entire year just for a publisher to reject your second book.
I hope that the summary above helps in negotiating your contract.
by Joseph Perry (@PerryLiterary), January 24th, 2021
Trad-pubbed authors: Did you know all this before you signed your first contract? (I sure didn’t) I know many of our readers are self-publishers, but many self-publishers also publish some of their books with traditional publishers. Did you know all this stuff about publishing contracts? Authors who are planning to go the traditional publishing route, do you have any questions for Mr. Perry?