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From Anne R. Allen’s Blog… with Ruth Harris:
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.
. . . .
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.
. . . .
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.
Link to the rest at Anne R. Allen’s Blog… with Ruth Harris
PG notes that the author of the OP describes himself as a literary agent and a publishing attorney.
PG has had no interactions with the author and has no knowledge that he is anything but competent to act as an agent and/or an attorney.
A thought which did come to PG’s mind is whether the OP’s author acts as both an agent and an attorney for an author at the same time with respect to a single potential publishing contract.
There are different financial incentives for an agent and an attorney representing an author.
- An agent doesn’t earn any money unless the author signs a publishing agreement arranged by the agent.
- An attorney representing an author typically has no financial interest in the author’s decision to sign or not sign a given publishing contract. An attorney not acting as an agent has gets paid the same amount whether or not the author decides to sign the contract after hearing what the attorney says about it.
PG has no reason to believe that the author of the OP has not taken careful steps to distinguish his services as an agent from his services as an attorney for an author with respect to a prospective publishing contract.
Without thinking about this in much detail, because he has never been and never plans to be a literary agent (just a schlubby old brown-shoe lawyer), if PG were to be acting as a literary agent and an author asked PG anything but a legal question that had a clear and undisputable answer (What’s the royalty rate in the contract for ebooks? How are my ebook royalties calculated as described in the contract?), PG would be inclined to send the author to another attorney to avoid any possible appearance of a conflict of interest between PG’s role as agent and his role as attorney.
As any legal malpractice insurance company is happy to tell one and all, a conflict of interest that makes it appear that an attorney is not 100% focused on the welfare of her/his client is one of the best ways available to get a jury angry enough to hit the lawyer with a big judgement if the lawyer is trying to act in her/his personal best interests if those interests carry the slightest hint of disadvantaging a client or harming a client in any way.
PG and 100% of the other attorneys he knows well take careful steps to avoid getting involved in a matter if there is even the slightest appearance of a conflict of interest. It’s always a better idea to say, “I’m afraid I’m not able to take your case,” and, perhaps disappoint a prospective client a little than to deal with the enormous headache and emotional burden of being on the receiving end of a lawsuit from a client who believes the attorney has betrayed him/her/it.
In large law firms where it is impossible for a single attorney to know the details of the legal matters every other attorney is working on (or has worked on in the past going back almost forever), there is a meticulous firm-wide process to make certain that the firm will not have any conflict of interest if it takes on a new client or a new matter from an existing client.
PG will leave it to any others who wish to opine on the agent/attorney question.