One thing Passive Guy enjoys about Dean Wesley Smith is you always know where he stands:
Since I started yesterday with asking why anyone would let their agent be their publisher, I figured I might as well talk about the money for a moment. Because it is tight times in the agent business that is causing this shift to what I call “the publishing scam.”
Writers, as I said yesterday, as a class are the dumbest business people on the planet. With no group a close second. Even kids doing pretend businesses in middle grades are smarter. Not kidding.
1) Writers get excited about “getting an agent.” This “agent” is a total stranger who printed up a business card, said they were an agent, and that was it. Nothing more. Not one ounce of training needed, not one test to take, and no idea of agency law.
2) Do writers do any background checks at all on this stranger with a business card? Nope? No criminal history, no financial report, nothing. The writers hire this employee without even asking for the agent’s Social Security Number. You can’t get a job at McDonald’s without filling out forms and going through a background check.
3) Writers give this perfect stranger with no training the right to get all their money from major publishing contracts, the right to get all the paperwork on that money as well before the writer sees anything. This money often totals into the hundreds of thousands per year. Often a lot more.
Yup, without a doubt, writers are the dumbest business people ever to come down the pike.
So, with no background checks, giving all your money to a stranger, giving that stranger all the paperwork that tracks that money, wouldn’t you just EXPECT that stranger to keep some of your money that should go to you???
Let me think… that wouldn’t even make a good plot on a bad sitcom.
Have your ever read a mystery novel???
Or read the financial page of a newspaper??
The answer is “Of course!!!”
. . . .
1) Writers never check royalty statements and agents know this. And if you get a big pile of statements from your agent with just one check, it’s easy for the agent to just accidentally keep some. Only about one in a hundred writers will check the statements and plug them into an adding machine. Kris and I do, but most never do. For a few years early on we found problems in royalty statements not matching payments, then never again because the agents knew we checked. And which way did the problem always go? I’ll give you one guess.
2) Overseas sales. Getting a royalty statement from an overseas publisher through the overseas agent your agent uses (a person you don’t even know their name) and your agent is mostly impossible. Knowing there is money even due you is even more impossible in many cases. Only way is to be talking with your overseas publishers and have them send you direct statements when any money is due. Otherwise you will never know and the agents know this and can just keep your money. (Yes, early on Kris and I got ripped off by this one. And stopped another one from one of our old agents overseas agent just last year. Honest.)
Often a writer will be off-the-charts stupid and give their agent (the stranger) power of attorney over contracts for overseas publishers. Meaning the agent (stranger) can sign the contracts and you wouldn’t even know you had sold something. If you have been that stupid, just walk away from your computer. You are in the running for the dumbest writer alive and should go work in McDonald’s to learn business. And yes, there are bestsellers who have done this. Their agents are very rich for some reason.
. . . .
But now to my biggest worry at the moment. “The Agent Ponzi play.”
Remember, agents have no training and do not know agency law which requires by law for all clients money to be held by itself in secure accounts until paid to the client. Instead, book agents just mingle YOUR money in with all the other clients.
And out of that fund they take their payments, including their rent and employee and grocery money.