Contracts

Know Your Rights

23 April 2016

From Kristine Kathryn Rusch:

I recently got an email that sent a chill through me. It was a newsletter from a traditional publishing organization. This organization is geared toward publishers and editors, not toward writers.

The newsletter was essentially an ad for an upcoming seminar that will teach publishers to understand intellectual property and expand their rights business.

Why did this send a chill through me? Because the one thing that has protected writers who signed bad contracts is the fact that their traditional publishers have no idea how to exploit the rights they licensed.

. . . .

[I]n short, most publishers ask for more than they have ever used in the past. Publishers have been very short sighted in how they published books.

. . . .

Ten years ago, it was relatively easy to get the rights reverted on a book like that. Essentially both parties agreed that the terms of the contract had been met, that the parties no longer had need of the relationship, and so they severed their business relationship.

It wasn’t easy-peasy, but it wasn’t hard either. It usually took a letter or two.

By 2005, however, most agents refused to write that letter which severed the contract. The reason was simple from the agent’s perspective. Many, many, many agents used a combination of their agency agreement and a clause in the writer’s book contract to define their relationship with the writer, and determine who controlled the marketing and finances of that book.

It wasn’t in the agent’s best interest to cancel the contract. In fact, the longer the contract existed, the better it was for the agent.

Writers with agents would have to write those letters themselves—and then, publishers would often contact the agent to find out why the agent was “letting” the writer do this.

. . . .

In the last year or so, I’ve been hearing from writers who say it’s almost impossible to get their rights reverted. The publishers want to hold onto those rights as long as possible.

The main reason for this has nothing to do with reprinting the book or keeping the book in the marketplace. It has to do with the changes in accounting that have occurred in the big traditional publishing companies.

The Big 5 (4? 3? Whatever. Jeez.) are now part of international conglomerates. Those conglomerates understand that intellectual property has as much value or more value than the buildings and land that the conglomerates use to house their businesses.

Those conglomerates put all of the intellectual property on their account books as an asset. So your novel—even if it’s more or less out of print (or has a $19.99 ebook like my novel Fantasy Life)—has a value assigned to it that reflects not only its earnings right now, but its potential earnings in the future.

The command came down from on high that publishers should retain the assets as best as possible. (I’m pretty sure some of these publishing companies were purchased for their intellectual property assets, not because of their bottom lines. I have no interest in proving that, though.)

So, publishers have kept the assets, doing the minimum to retain the rights to them. But they really haven’t maximized their profits.

. . . .

In practice, publishers have started to claim rights they never had. They’re interpreting the contract terms for something negotiated in 1997 by 2016 standards, and finding ways not to pay for those uses.

Big corporations are all about profit for the corporation. The best way to maximize profit is to lower expenses.

That’s why, after these big companies merge, you see layoffs a year or so later. That gives the new company time to define itself, find employees with overlapping duties, and streamline production.

Once the layoffs are over, once the agreements with the subcontractors (like printers and distributors) end or get renegotiated, the corporations look around for other ways to cut expenses.

The easiest way is to cut the payments to the suppliers—the writers.

. . . .

Just be aware that publishers often cut payments, and they use the contract as their guide. Not necessarily the contract negotiated in good faith with a corporate entity long merged into five other corporate entities, but the corporate entity that exists now.

Link to the rest at Kristine Kathryn Rusch and thanks to Bruce for the tip.

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

As usual, Kris does an excellent job of talking about the business/legal aspects of being a successful professional writer.

PG would like to talk a bit about authors making a decision to sign a publishing contract with a particular publisher or editor.

Isn’t that a huge reason why most authors sign a publishing contract? RomancesRUs is the hottest publisher around and some of their authors are New York Times Bestsellers. And Leticia is the best romance editor who ever walked the earth plus she is so nice on the phone. (ditto for SciFiRUs, etc.)

The idea that no one will remember RomancesRUs in ten years and Leticia will be fired in six months doesn’t enter most authors’ calculations.

It is the nature of declining businesses to attempt to consolidate their way to survival. That’s what’s been happening in big and small publishing for awhile and what will continue to happen.

Many authors sign with a publisher because of that publisher’s reputation for quality books and successful authors. Some authors will sign because they’ll be working with an editor with a great reputation for excellence and success, the kind of editor that bestselling writers mention in interviews.

Similar thinking goes into an author’s decision to sign with a star agent, one with many happy authors who say nice things about the agent’s work.

These would be good business reasons to sign a contract that lasted for five years.

However, current reputations and past successes are a terrible reason to sign a contract that will tie up rights to an author’s books for the full term of the copyright. As a reminder, in the US, copyrights last for as long as the author lives plus 70 years.

In a successful business, management can last for a long time and often the original management hires new managers with similar business acumen and passes down the business principles that lead to that success through the hierarchy. Such businesses can work their way into long-term success.

When a business is declining, especially when it is part of a declining industry, management turnover and ownership changes become near-constants. Yesterday’s management practices are no longer today’s management practices. Some investors make a lot of money by acquiring problem businesses, cutting costs to the bone, then harvesting profits (pulling cash out the business) or finding someone else to buy the business because its financial statements now look better.

Traditional publishing is in decline. How long the decline might last is speculative. However, the words of Ernest Hemingway are instructive. “How did you go bankrupt? Two ways. Gradually, then suddenly.”

The Securities and Exchange Commission requires mutual funds to warn their investors that “Past performance is not a predictor of future results.”

Of course, an investor who bought into a mutual fund can sell his/her shares and have nothing further to do with that fund and its managers. A hedge fund that purchased a publisher can sell the publisher and be done with it. Since no US state permits life-time employment contracts, a publishing executive or editor can either quit immediately or wait a couple of years, then bail out on a failing publisher.

Only the authors who signed contracts that last for the full term of the copyright are tied to whatever corporate entity once called itself a publisher, but now is a hedge fund asset, for the rest of their lives plus 70 years.

(PG will note that a provision in US Copyright Law permits the creator of a copyrighted work or his/her heirs to terminate a contract 35 years after publication or 40 years after the contract was signed, but it doesn’t happen automatically and 35/40 years is also way too long. PG won’t get into the technicalities of this part of the law.)

“But it’s a contract for only one book,” an author might say. PG won’t take more space to discuss unfair non-compete clauses, option clauses, etc., can undercut the excuse that it’s only one book. Such clauses can affect a whole bunch of books.

Under current contract practices, the author is the only person who has to think in the long term while everyone else in the publishing business is focused on the short term.

Publishing contracts need to include provisions that end the contracts after a few years so the author can have the same flexibility as everyone else involved with the author’s books.

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SFWA Contracts Committee Alert

22 April 2016

From The Science Fiction and Fantasy Writers Association:

The SFWA Contracts Committee believes there are serious problems for writers with the non-compete and option clauses in many science fiction and fantasy publishers’ contracts. The non-compete language in these contracts often overreaches and limits authors’ career options in unacceptable ways. Writers may choose to bring out a range of books from different publishers — science fiction from one publisher and fantasy from another publisher, for example — and may have to do so in order to earn anything like a living wage.  The problem becomes even worse for hybrid authors who self-publish works in parallel with their traditional publications. Several contracts that we have seen include overlapping restrictions that could keep the author from publishing another book for more than a year.

Authors also retain audio, foreign language, and other rights with the intention of licensing them elsewhere. Language we have seen in these clauses attempts to make authors responsible for how these other rights are used, something that clearly places an unreasonable burden on them.

Authors should think carefully about signing any contract with these restrictive clauses and should negotiate any limitations in the clauses that would interfere with their writing agendas.  There are, in fact, times when it would be best to walk away from contracts with these bad clauses.

. . . .

Any limitation on the author’s ability to write new works at any time is unacceptable and should be deleted.

“Competing work” should be defined in the contract as clearly and narrowly as possible, and preferably limited to a work in the same series (whether one is planned or not). The burden should be on the publisher to prove that another work published elsewhere by the author would reduce their sales.

Any non-compete limitation that is tied to publication of the work covered by the contract should end on a specific date.

Any reference to the author diminishing the value of rights granted to the publisher by selling rights that the author retains should be eliminated as it is vague, unenforceable, and unacceptable.

Option clauses should be crossed out or defined as narrowly as possible. If the option clause can not be struck out entirely, the committee recommends that the author amend the clause so that they only need to submit a proposal or synopsis of a work and not the completed work to satisfy the publisher’s option. In addition, we recommend that the deadline for acceptance or rejection of the work should be no longer than 30 days, starting when the proposal is submitted. Rejection or failure to respond within the time specified should end the option obligation.

Link to the rest at SWFA and thanks to Deb for the tip.

PG says this is a good beginning to removing terrible clauses from publishing contracts. There are, however, many more “standard” provisions that also need to disappear or be substantially limited.

Top 10 Things To Consider When Choosing A Publisher With The Same Care As A Jane Austen Heroine Chose A Husband

18 April 2016

From author Katherine Grubb via 10 Minute Novelists:

It is a truth universally acknowledged that a writer in possession of a good story must be in want of a publisher.

It’s the age old story. You have so many hopes and dreams. You have all these wonderful stories to tell. You know that it will take an attachment, a proposal and perhaps a big commitment to make you moderately rich and a teensy bit famous. So you, the perfect Lizzie Bennet, who will only writes for love, not necessarily £10,000 a year, will be happy just to attach yourself with a publisher who respects you.

. . . .

1. You’ll attract folks like you. If you want the best, then be the best. Before you start looking for a publisher, make your story the best it can be. I know, you’ve been working on it for a long time and it really is good. It’s not silly like Lydia or Kitty’s, and it’s not quite as good as Jane’s (but she’s being courted by the Big Six.) Your first responsibility as a writer is to write well. Take your time. Learn from the greats. If you are going to take your writing seriously and you want to attract publishers who take writing seriously, then push yourself to the most excellent level. If you want to make a fast buck, then you’ll attract publishers who want to do the same.

. . . .

3. You understand your own goals for publication. Some writers have Rosings Park ambitions. Some will be content with Longbourne. (Forget Purvis Lodge. The attics there are dreadful!) If you don’t know what you want, then it will make choosing a publisher all the more difficult. This is what I did: I tried to find books, both fiction and non-fiction, that were similar to mine in content. I looked at who published them and who represented them. I asked myself if I wanted my books to be lumped together with these kinds of books. If I did, then it was from this list of publishers and agents that I would do research. If I didn’t, then I kept looking until I found books that were a better match.

. . . .

4. You have a full understanding that an entire industry has been created to take advantage of desperate authors. And along comes your first contact with a publisher. He is tall, dark, handsome (okay maybe not in reality, but go with me, this is fun!) He is a mercenary. He may not be interested in art. He may not be interested in your long term goals. He may just want to cash in from your hard work. Legitimate publishers, who have good reputations, are, in this current economic climate, not likely to initiate relationships with writers. They don’t have to. They’re turning manuscripts away constantly. It’s the less than trustworthy who are Googling authors and trying to sign anyone. Anyone. What to do? Go to Preditors and Editors and look for the names of reputable and notorious publishers, agents and editors. This is like Consumer Reports for writers. You’ll be really glad this site warned you about that Wickham!

Link to the rest at 10 Minute Novelists

Here’s a link to Katherine Grubb’s books. If you like an author’s post, you can show your appreciation by checking out their books.

During the course of watching various adaptations of Jane Austen’s novels, Mrs. PG and PG have observed that, despite providing a wonderful setting for the romantic quandaries Austen so brilliantly depicts, both of us are happy that we didn’t actually live during the Regency. But it is a delightful place to visit via the BBC.

Fair, Compromise, Clout, and Balls

15 April 2016

From Kristine Kathryn Rusch:

Right now, traditional publishers are just beginning to realize that they can (and often do) control everything about a work of art. This should frighten you traditionally published writers, because publishers are going to exploit your works as never before. We’ll deal with that a bit next week, in a blog on copyright and permissions.

. . . .

We all know that you can’t control everything in life. That rule also applies to contracts. Some large entities do not allow negotiation on their contracts.

. . . .

Whenever you deal with contracts, you don’t negotiate the contract for the nice reasonable person sitting across from you. You negotiate the contract with the idea that the nice reasonable person will be fired and replaced with a demon from hell who will enforce every part of that contract to his own benefit.

. . . .

The best contracts are fair to both sides—at the time the contract is negotiated. However, contracts that were negotiated in 1980 are still being interpreted today, and the world had definitely changed. What might have seemed “fair” then isn’t necessarily “fair” now.

. . . .

So…you don’t have clout to negotiate a contract. You’re not James Patterson or Nora Roberts. You aren’t already a multimillionaire. You aren’t a successful businessperson. So, most people think you should slink into the background and wait for the success pixie to sprinkle you with magic dust. Once that occurs, thenand only then can you negotiate a contract.

Seriously? Please excuse me while I sigh and shake my head.

How do you think people become successful? They become successful by controlling their own interests and standing up for themselves. They become successful by learning their business. They become successful by taking risks.

One of the major risks you take in any business is that you will hear the word “no.” A lot.

What’s the worst thing that could happen in a negotiation when you ask for something you want (but may fear you don’t deserve yet)? Well, the person on the other side could say “no.”

Oh, waaaaah.…

But that person could say yes. Or they could say, I can’t do what you ask, but I can do something else that might benefit us both.

You don’t know until you ask.

And here’s the thing, people. Anyone who knows contracts, who knows business, expects you to ask. So ask.

What’s important to you might not be important to them at all, and so a yes on your most important thing might be easy to them.

It’s not all up to them, by the way. Because it’s a negotiation, which is a dialogue.

You might say, I want X.

And they might respond, I can’t do X. Sorry, no.

Then you might say, I see you want Q. But I can’t do Q if I don’t receive X.

If Q is important to them, they might cave on X. And so on.

You don’t know if you don’t try.

. . . .

[I]n traditional publishing, representatives negotiate with representatives, and the principals do not talk to each other.

What do I mean? I mean that agents negotiate with editors. Agents theoretically represent the writer and editors represent the publishing company.

Even then, the negotiation is uneven. In theory, the agent has no power to make or sign an agreement. In reality, the agent shouldn’t even be negotiating a legal document. Savvy writers use attorneys to negotiate a contract. We’ll get to all of this down the road.

Here’s the upshot: the writer’s representative should not be able to sign the documentation to make the deal. The writer’s representative is not (or was not) a principal. (Many agents are in the process of subverting this these days, which gives me the willies.)

Editors also cannot sign an agreement, and have only limited power to act within certain parameters, as the company’s representative. The editor has an offer and some wiggle room, but must get approval for almost everything.

Writers who drop their agents or handle things with their lawyers in the background often forget that the editor can be a representative. Suddenly, the writer is taking terms on the phone with an editor, and it might be a binding negotiation, not a casual discussion.

. . . .

Use a representative when you’re not certain you’ll be making a final deal or you need someone to be tougher than you can be. Let the representative put distance between you and that nice person you like a lot on the other side of the table.

. . . .

I do not let a publisher grab everything. If that’s a deal breaker for the publisher, then it’s also a deal breaker for me. I don’t want to work with someone who wants to own my intellectual property outright. I really don’t want to work with someone who wants to own my intellectual property and who tries to gain that property through subterfuge, as many new traditional publishing contracts do.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

PG says that in a typical first-offer business contract, there are almost always quite a number of terms that can change.

In some cases, when PG drafts such a contract, he’ll put in a few things that will be like bait for opposing counsel to change. That way, opposing counsel and the other side feel like they got some mileage out of their negotiating work and brought PG’s client around to their way of thinking.

In some cases, when the other side asks for a change in an important clause and a change in a bait clause, PG can move the deal forward by saying (always reluctantly) that the best he can do is split the difference and give in on the bait clause on the condition that the other side concedes on the important clause.

By his nature, PG is the kind of person who prefers to get down to business and get a deal done (or not) in a very efficient way. However, in the world of lawyers and clients, there are people who think they won’t get a good deal unless they go through an intense negotiation.

If you give them a contract with only important clauses, your best offer, they’ll assume that you’re willing to negotiate some of those away. So, in the interest of getting to a deal on terms that will be beneficial for your client, you set up the contract so you can do the negotiation the way the other side wants to negotiate and concede a few items.

Contract Basics (Contracts/Dealbreakers)

8 April 2016

From Kristine Kathryn Rusch:

I need to discuss the importance of contracts.

I know to some of you that sounds silly. Traditionally published writers expect to get a contract from their publisher. Hybrid writers expect the same thing, when they have a publisher other than themselves.

Indie writers often have no idea what contracts are or why they’re necessary.

In fact, all three groups rarely think about contracts at all.

. . . .

Over the years, I have become fascinated with writers’ attitudes towards contracts. Writers are so very cavalier about them. More than fifteen years ago, a former editor of mine (for a major traditional publishing house that has since vanished) told me that most writers she worked with looked at their 25-page traditional publishing contract like this:

The writer closely examined the lines covering the advance, and the advance’s payout schedule. The writer eyeballed the royalty rates, and the writer glanced at the deadlines.

That was it. Out of 25 pages, the writer looked at very little else.

I did not believe my editor. I really believed most writers were not that stupid.

I’m here to tell you now: she was right. Most writers are that stupid. Most writers pay no attention to their publishing contracts at all until some term bites them in the ass. Then the writer tries to figure out how to get out of it, not realizing that they got themselves into it by signing the contract without examining it.

. . . .

Writers in general—traditional, hybrid, and indie—do not respect their contracts. Writers don’t understand contracts, and rather than learning what a contract is and why it exists, writers let “their people” handle the contracts.

For generations now, “their people” are usually their agent and the employees of their agent, which, as you will see in future posts, is a truly terrible idea.

. . . .

Most writers expect someone else to generate a contract. Most writers want their traditional publisher or their agent or their service provider or their mortgage broker or whomever they’re in business with to provide them with a contract. Most writers have no clue that they can generate their own contracts.

Yes, you, traditional writers! You can go to your publisher with your own contract in hand. I personally know several writers who do this. That puts the contract negotiation phase on equal footing. The writer has their 10-page contract; the publisher has their 25-page contract.

The document the two end up with is neither of those contracts. It’s something unique to that particular negotiation, and probably won’t be replicated in the writer’s next negotiation with a different publisher.

There, traditional writers, did I just blow your minds? Because it certainly blew mine when I started editing over 25 years ago and some writers provided me with their standard contracts for short fiction. I didn’t know that was possible, because, at the time, I did not understand contracts or contract law.

. . . .

Contracts are extremely important. They define the relationship between the parties. Written contracts are the best, because each party can examine the terms, think them over, and decide whether or not those terms are acceptable.

You and I might discuss a proposed business plan over the phone. I might think we decided to have you do all the publishing work, from designing the covers of a book to writing cover copy, and you might think we decided that you would write the book and I would publish it. A simple misunderstanding that could happen in conversation would be solved if we had a written agreement.

With a written document, you can examine the terms and see if they’re feasible. But you must examine those terms before you accept the offer. Once you’ve accepted, the contract becomes binding.

It’s easier to take legal action over a broken contract if that contract is in writing. Taking legal action does not mean you have to go to court. You can have an attorney contact the other party, and let them know they are in breach of the contract. That’s very easy to do when the terms are spelled out.

I can’t tell you how many times I’ve taken part of a publishing contract and used that section to show the publisher that they were in breach of the contract.

Once someone is in breach, by the way, they usually have the right to cure. Meaning, if they do something wrong, they have the right to fix that problem within a reasonable amount of time.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

Dealbreakers/Contracts

1 April 2016

From Kristine Kathryn Rusch:

In 2012 and 2013, I published a series of blogs on contract deal breakers for traditionally published writers. I’ve been promising to update it for years now, but I’ll be honest: The very topic discourages me.

. . . .

I mentioned above that the topic of contracts discourages me. That’s one reason I’ve put the revision of deal breakers off for so very long.

I had hoped that contracts would improve. They haven’t. They’ve gotten worse. What has happened is that predictions long-time writers, like my husband Dean Wesley Smith, made have come true: Writers are starting to split into camps. Dean predicted two camps—those who published their books traditionally, and those who published indie.

Unfortunately, we’ve divided into three camps: those who publish traditionally, those who publish indie, and those who publish through their agents.

That last clause “through their agents” is so wrong, I have trouble typing it. The agents who still represent the writer as an agent are breaking the law when they publish a writer’s books. The agents are then becoming publishers, which makes them violate all kinds of agency law. Not literary agency law, which, anyone will tell you, does not exist in most states. Agency law, which governs anyone who calls themselves an agent—from real estate agents to insurance agents to literary agents.

. . . .

Most literary agents have no idea agency law even exists—at least, I hope they have no idea, because if they do, then they are flagrantly violating the law, instead of ignorantly violating the law. Me, I prefer the ignorant to the flagrant.

. . . .

Since huge conglomerates have taken over the big traditional publishers, no one even pretends at gentility any more. Smaller publishers which were often a dice-roll (some were great for writers; some were horrible for writers) are now as bad, or worse, than the Big Five. Much of this is economic—the economics of traditional publishing, done the old-fashioned way, isn’t working as well as it once did, so traditional publishers (large and small alike) are squeezing their writers like never before.

Most writers who publish traditionally can no longer make a living at writing. If those writers only write one novel per year, they definitely can no longer make a living at writing.

Most midlist writers are lucky to get an advance of $5000. Those advances are paid in three installments—signing, acceptance, and publication. Even being charitable and assuming that the advance is paid in the traditional two installments ($2500 each) or let’s be even more charitable, all at once, a writer can’t live on that kind of money.

The writer has to be able to write something else.

But most traditional publishing contracts —negotiated by agents —have some version of this clause:

The Work [the novel] shall be the Author’s next book-length work. The Author represents that there is no outstanding commitment for publication for the first time of another book-length work written or co-written by the Author to a third party and the Author will not offer rights to another book-length work written or co-written by the Author, or accept an offer for such a work, until acceptance of the Work by the Publishers and until the Author has complied with the option in Clause 3(a)

The option clause in most contracts is another problem, which options the author’s next work, and allows the publisher to take their own sweet time in deciding if they’ll buy the next work.

But note how pernicious this clause is. I took it from an existing contract that a writer sent me over a year ago. The only thing I changed was adding [the novel] for the sake of clarity. The rest is from the contract verbatim.

The contract is for a novel, yet this clause restricts book-length works. That includes nonfiction, short story collections, novellas, anything at book-length, which is not defined at all in the contract. So that means book-length could be anything the publishing company deems it to be.

. . . .

Usually, though, there is another clause, buried in the warranty, that says the author warrants he will not publish any other book-length work that will compete with this book. And who determines that competition? The publisher, of course. Certainly not the author.

So…for a measly $5000 (minus agent fees, which actually will make this $4250), the author signed away his right to make a living. In the early 1990s, I sold eight novels before my first one was published. I also sold an anthology that I edited, and I was editing a series of hardcover anthologies that we chose to call magazines.

If my first novel contract had had that clause, I could not have done any of those things. So, instead of earning tens of thousands of dollars in those early years, I would have been left with a check for $2125—and some crappy day job.

. . . .

For years now, Publishers Marketplace has tracked publishing deals on its website. Agents, in particular, love to report their really big coups to Publishers Marketplace. Publishers Marketplace divides the deals it reports into five categories, all by the amount of the advance.

PM defines “major deal” category—the largest advance category—as $500,000 and up. In the not-so-distant past, the major deal category was often for one book. If the agent secured a three-book deal that was $500,000 per book, the agent didn’t call that a major deal, because that wasn’t impressive. Someone might misinterpret and believe the agent got “only” $500,000 for all three books.

Instead, the agents would report a 3-book deal for $500,000 per book as a 1.5 million dollar deal.

I searched major deals this afternoon, and found quite a few. But when I looked at them, they were all for mid-six figures for a lot of books—usually a three-book deal, although I did see quite a few for five books, and one “major deal” for 11 books.

Believe me, if that 11-book deal had gone to seven figures, the agent on the deal would have said “In a deal worth one million dollars…” Didn’t happen.

In the past year, searching for fiction only, I found three deals listed as million-dollar deals. They include John Scalzi’s 10-year, 13-book, $3.4 million dollar deal (which comes to roughly $225,000 per book when you subtract agent fees). Only one of the three deals was for a single book, which sold for 1.25 million. The remaining deal was for over a million per book, and that was a $7 million 5-book deal (which comes to $1.4 million per book before agent) for a self-published writer whose books sold 1.2 million all on their own.

Three million-dollar fiction deals in 2015. Only three. And none yet in 2016. There were nine in 2014, and at least one per month in 2013. In 2012, there were at least two per month.

Why is this important? Because that home-run is less possible for everyone in traditional publishing, and they’re looking for other ways to make money. One of the ways they make money is squeezing writers. Another way is to own the copyright—or at least, control the copyright.

. . . .

And here’s the really scary part: Old contract terms, some written in the 20th century before ebooks existed, are being redefined and employed as a justification for publisher behavior. These traditional publishers—particularly those that have been subsumed into a major conglomerate—are not asking permission to change the definition of the terms. They’re just doing it.

Things that were pretty innocuous in 1985 are now weapons that are being used against authors.

You’d think that agents, who are supposed to work for the writers who hire them, would prevent this whole-sale change of meaning of old contracts. But a handful of agents are complicit in this, preferring to maintain their working relationship with a big publisher than rocking the boat for a small client.

Even more agents are just plain ignorant of what the changes in the clauses mean.

Those who run the agencies, though, do understand that their income is going down, so literary agencies have become pretty draconian in their own contracts. Those agencies make agreements with their authors, usually requiring the author to give them 15% of the earnings of a particular book if the agent sold the book. That’s bad enough, especially if the agent has been fired—as two of mine have (the two who still are entitled to 15% of certain projects).

But the agency agreements are moving into a whole new, and even uglier, place in relation to their writers. Agents are demanding a piece of their writers’ copyrights as well. Some agents are blatant about it, stating in the agency agreement that they make writers sign before the writer becomes a client, that the agent will own 15% of the copyright of any book the agent sells for the writer—or in the case of one agency, 15% of the copyright of any book the agent markets for the writer.

Other agency agreements are less blatant. You have to read them in conjunction with the contracts the agent has negotiated for the writer, to see that the agent has actually slipped his hand into the writer’s pocket and legally stolen copyright. Most writers trust their agents blindly, and never believe it would happen to them—until it happens to them.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

The problems Kris mentions are, unfortunately, not new and will be familiar to longtime visitors to TPV.

Some authors (or their lawyers) have had those clauses removed or defanged, but authors still sign “standard contracts” in the naive belief that if a contract is “standard” most other authors must have signed the same thing. Unfortunately, they can find the writing career they envisioned substantially constrained.

PG says if you want to be a professional author, act like a professional and make certain you understand the contracts you sign.

Harvard Sues Elmore, Gets Injunction Stopping Sales of

29 March 2016

From the Maine Antique Digest:

A lawsuit filed in federal court in New Mexico in June 2015 pits Harvard University, which has about a $37 billion endowment, against Steve Elmore, an antiques dealer who patched together $36,000 to self-publish a book. The suit may hinge on the definition of the word “manuscript.”

. . . .

In 2015 Elmore of Santa Fe, New Mexico, self-published a 217-page book, In Search of Nampeyo: The Early Years, 1875-1892. It was the culmination of decades of work and research. His publication was also the result of Elmore’s being rejected by the Peabody Museum Press, the publishing arm of the Peabody Museum of Archaeology and Ethnology at Harvard University.

In its suit, Harvard claims Elmore used photos he took in the Peabody Museum after signing an agreement that specified how he would use the photos and restricted their use. Elmore counters that Harvard released all its rights to the manuscript and wants to publish his decades of research without crediting him.

According to court documents, in August 2010 Elmore signed a contract with the Peabody Museum Press to write a manuscript on Nampeyo. The contract noted that the manuscript was subject to peer review and promised “potential publication,” and Elmore was paid $1500 to conduct research at the museum.

. . . .

“The first version of my manuscript was sent out for peer review, with two out of three reviewers recommending publication with revisions. The editor asked me to revise the book for the more scholarly ‘Peabody Museum Papers’ series. She asked me to explain my methodology and to link my work to art history, which I did. The new version of my manuscript, complete with my photos, took me another year and added 100 pages to my manuscript. In November 2013 I submitted this final version…and it was rejected with little comment in January 2014 by the Peabody Museum Press board of directors,” said Elmore.

The rejection letter’s language is the subject of dispute.

In a letter dated January 21, 2014, Joan Kathryn O’Donnell, director of the Peabody Museum Press, rejected Elmore’s manuscript because it was not a fit with the Peabody’s “editorial and publishing priorities and standards.” Elmore’s approach to the material, the letter said, was “inappropriate” for the Peabody’s scholarly publication series, and it quoted a board member who leveled a stark criticism. “We are an academic press, and this is not an academic book,” the unnamed board member said.

The rejection letter stated that the Peabody Museum Press was returning to Elmore “all rights in the manuscript…including all versions of the manuscript submitted to the Peabody Museum Press.” O’Donnell encouraged Elmore to publish elsewhere, even offering ten to 15 high-quality photographs and suggesting American Indian Art Magazine as a possible venue. “We tried very hard to make this project work,” O’Donnell lamented.

Elmore took O’Donnell’s advice but didn’t go the magazine route, and he didn’t accept the Peabody’s offer of photographs; he self-published the book through Spirit Bird Press, an entity he created.

. . . .

On December 10, 2015, a federal judge granted Harvard’s motion for an injunction, stopping Elmore from advertising, selling, and distributing his book. Elmore had already sold over 900 copies of the book that cost him $36,000 to produce, had a deal with Amazon.com in place, and had media kits ready to promote his book.Maine Antique Digest reviewed the book in the April 2015 issue.

Elmore is fighting back on two fronts: he’s filed a countersuit in federal court and launched legal action in a state court in New Mexico. His countersuit alleges breach of contract, breach of covenant of good faith and fair dealing, tortious interference with contractual relations, conversion, and more.

. . . .

In an e-mail to M.A.D., Elmore states his case. “Here’s my take on the Permission to Photo agreement. First, that agreement is Harvard’s attempt to strip photographers of their copyright of their work. The intention of the agreement is for Harvard to avoid U.S. Federal Copyright law and for Harvard to assert itself between the photographer and his own copyright, thus placing itself above the law. Right now, Harvard acknowledges I own the copyright to my photos, returned in the ‘all rights’ letter, yet insists I can’t publish them. What else does copyright mean? I’m not denying I signed the agreement, and I would not have published without their returning to me in writing from the Board ‘all rights’ etc. and ‘recommending’ I publish elsewhere.

. . . .

Harvard’s lawyers claim the injunction is necessary. “It is extremely important to the Museum to have control over and approval of any published photographs of its collections, because the quality of those photographs and the way they are presented reflect directly on the Museum, and either enhance or degrade its reputation.” Harvard claims that Elmore’s photographs are blurry, washed out, or inadequately lighted.

Link to the rest at Maine Antique Digest

SoA seeks new law to protect authors

7 March 2016

From The Bookseller:

The Society of Authors (SoA) is lobbying the government to introduce a new law to protect authors’ and creators’ contracts.

Chief executive Nicola Solomon told The Bookseller the SoA is working with the Creative Rights Alliance and other organisations on draft legislation to make changes to the law within “the coming couple of years”.

Without directly impacting on “headline terms”, such as royalty rates, the SoA is proposing that “minimum principles” should be enshrined in legislation to help balance the “inequality of bargaining position” between authors and publishers. The SoA is pushing for the law to tackle “unfair terms” in contracts to help create a fairer and more “sustainable” market, according to Solomon.

Key issues being targeted are “clarity”, in the wording of contracts, “equitable remuneration” – for example, proposing a “bestseller clause” in the event of earlier copyright buy-outs – “appropriate credit” and “reasonableness”.

As part of a “general test of reasonableness” – already part of consumer rights legislation – the SoA is pushing for “use or lose it clauses” that ask for the reversion of rights not to be exploited by publishers after “a certain amount of time”.

It also hopes to ensure against “anything contrary to the requirements of good faith or which causes a significant imbalance in the parties’ right of obligations to the detriment of the author” and that “the small print is fair, doesn’t restrict you and, quite particularly, doesn’t restrict you forever”.

Solomon also disagrees with the royalty arrangements for e-books where net profits are distributed 25:75 respectively between the author and publisher, saying it was not “a fair reward for the work that’s done”.

“We need to look at who is putting the value into the process at every stage,” Solomon said, “and making sure the proceeds are shared fairly between people for the amount of value they put in and the amount of risk they take.”

. . . .

“In publishing, where it’s very common still to give contracts for the full term of copyright, we want something that futureproofs them – so that when new forms of exploitation are invented, people can’t say ‘I’ve got the rights to do them’, you have to come back, you have to negotiate them, you have to talk about them. So you can get the reversion of your rights after a certain amount of time if no one is using them. And so we can make sure things are fair and commence in a way that can make money properly for everybody.”

Link to the rest at The Bookseller

PG says this is a far better use of time and resources for a group representing authors than paranoid bellyaching about Amazon.

My Book’s Been Orphaned–Now What?

4 March 2016

From The Evil League of Evil Writers:

The news that a major small publisher was closing hit everyone by surprise some days ago. This publisher (I’m not naming names because this post isn’t about them but more general than that) took a very honest, classy approach, continuing to release books that were ready and selling stock still while they begin to wind down. By comparison, many other places abruptly close and revert all rights at once; some have even been known to disappear altogether, leaving writers in the lurch (and rarely paying staff).

This is, unfortunately, a thing that happens a lot. I was first signed a dozen years ago with a small publisher, and my good friend (whose books I inherited recently) was with multiple small publishers years before that, so I’ve seen this many, many times. Publishers closing has been a part of e-publishing for a very long time and many authors at some point find their books orphaned.

. . . .

What are Reversion of Rights letters?

This is a crucial and necessary document to obtain when your publisher closes.

You had a contract with this publisher, giving them the rights to publish your books. Even though you retain copyright, if you’ve given exclusive print rights to someone, you can’t then go and republish unless you have proof.

If you plan to query other publishers with your orphan books (more below), you absolutely need this letter. If you plan to self-publish, you need it as well; Amazon (KDP and Createspace) will block your books when you self-publish if they find it’s been published before and will require you to give them proof you have the print rights.

A RoR letter will contain language to the effect of “Please consider this the official cancellation of your publication contract” and will include the name of the book, the name of the publisher, and the date. It should also grant the publisher a certain amount of time in which to comply with the cancellation (thirty to ninety days) and remove your book from print.

. . . .

Do I retain the rights to my cover art?

Unless you provided the art–either because you hired the artist or were the artist–no, you don’t get the rights to the cover. Depending on the artist contracts, you might be able to re-purchase the cover from them if the design reverts back to them. If the publisher provided the stock photos, even if you’re the artist, you will need to re-purchase that stock so you have a license to use it.

Link to the rest at The Evil League of Evil Writers and thanks to Ashe for the tip.

One way of handling this from a contractual perspective is to have a Change of Control provision in your publishing agreements. These provisions are close to being boilerplate for standard business contracts in the reality-based world, but rarely found in publishing contracts.

Here’s what a change of control clause looks like. This particular one is in two parts – a definition and a clause that says what happens if a change of control takes place.

“Change of Control” means the sale of all or substantially all the assets of a Party; any merger, consolidation or acquisition of a Party with, by or into another corporation, entity or person; or any change in the ownership of more than fifty percent (50%) of the voting capital stock of a Party in one or more transactions.

In the event of a Change of Control of any party to this Agreement, the other party may terminate this Agreement upon thirty (30) days written notice.

PG was thinking the other day that traditionally-published authors might benefit from a Change of Editor clause. The unfortunate experience of many authors is, if the editor who acquired the book leaves the publisher, the book effectively becomes orphaned within the publisher.

Yes, another editor is assigned to the book, but the new editor already has her own projects and her own acquisitions to deal with and hasn’t suddenly gained another 24 hours in each of her days. Unfortunately, the new editor has a tendency to ignore most or all of the books of the departing editor.

Here’s a Change of Editor clause that might help an orphaned author out.

In the event that Eartha Editor is, for any reason, no longer a full-time employee of Publisher assigned to oversee Author’s books and, if Author does not execute a written consent to the appointment of a replacement editor, Author may terminate this Agreement upon thirty (30) days written notice to the Publisher.

Yes, the publisher does not have absolute control over whether an editor continues to be an employee, but neither does the author have control over a wide range of events for which standard publishing contracts impose penalties. (See, for example, Warranties and Indemnities here, here and here)

If the author likes the new editor and is assured that the new editor will take good care of the author’s books, a signature on a one-sentence consent form is quick and simple.

Termination Fees in Publishing Contracts: Why They’re Not Just Bad for Authors

15 February 2016

From Writer Beware:

In the course of my work with Writer Beware, I see a lot of publishing contracts (for the most part, these are from small presses). One of the red flags I’m encountering more often these days is early termination fees: a penalty that must paid by the author if s/he wants to get out of a contract early.

. . . .

Why are termination fees a red flag? Obviously they are onerous for authors, who might have good reason to want to end a contract early, and can’t do so without opening up their wallets.

Of more concern is the fact that publishers may employ them abusively, holding them over the heads of unhappy writers, attempting to use them as an extra income source by offering to jettison dissatisfied authors at the slightest provocation (one publisher I know of even provides an annual “get out of jail free” period where writers can request an invoice), or terminating the contracts of writers who’ve pissed them off and demanding the fee even though termination wasn’t the writer’s decision.

I’ve gotten complaints about all of these. For instance, last year I heard from an author who was quoted an early release fee in the low four figures, described as a reimbursement for production costs–despite the fact that the book had been in circulation for some time and the publisher had likely made back its investment.

. . . .

But termination fees aren’t just bad for authors. They’re bad for publishers, too.

Sure, from an honest small publisher’s perspective–a publisher that isn’t planning on browbeating its authors with termination fees, or using the fees to try and make an extra buck–a termination fee may seem to make good business sense. “We don’t want to hold onto an unhappy author,” the publisher might reason. “But we invest a lot of work in editing, designing, marketing, etc. So if we can’t maximize our investment by selling the author’s book for the full contract term, it’s only fair that we should get some reimbursement if she decides to leave early.”

Problem is, if the unhappy author can’t afford the fee, the publisher is stuck with her anyway–along with, possibly, the extra resentment produced by the author’s knowledge that she could have escaped if only she’d had the cash.

Link to the rest at Writer Beware and thanks to Deb for the tip.

PG says a termination fee is always a red flag. While PG will concede the theoretical possibility that an honest publisher somewhere includes an early termination fee in its contract, so many fly-by-night publishers use this shady tactic that you can assume a termination fee means there’s a 99% probability that a crooked or inept publisher is behind it.

One additional reason that early termination fees are a bad idea for a publisher – a disgruntled author with some time on his/her hands can use social media to make certain that anyone who spends five minutes with Google will learn that the publisher engages in questionable practices plus it doesn’t know how to sell books.

There’s an old marketing adage that a happy customer will tell one other person about their experience while an unhappy customer will tell ten other people why they’re unhappy. Social media of all sorts multiplies the platform of the unhappy customer a thousand-fold.

The days when an unhappy author had to keep his/her mouth shut about mistreatment by a publisher for fear of being blackballed are over. More and more frequently, an unhappy author will tell the world.

Since PG has gotten warmed up about publishers mistreating authors, he will make a prediction.

PG believes, more and more of the smartest authors are pursuing self-publishing because that’s the best way to make a living or getting rich as an author in 2016. If this trend continues (and PG sees no reason why it will not), Big Publishing will eventually end up with all the dumb authors and none of the smart ones.

PG does not mean to insult traditionally-published authors, particularly those who started down that path a long time ago, but the genteel poverty that is increasingly associated with the privilege of telling others you have a New York publisher won’t pay your mortgage or let you quit your day job.

What the cool kids were doing ten years ago is not what they’re doing today.

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