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The Curious Incident of the Dog & the Missing Royalties

24 May 2019

From Dan Rhodes:

Every once in a while my reader in Cheltenham will get in touch, asking why I’ve not had a book out for such a long time. What follows is the short answer.

In October of last year, 2017, I made the heartbreaking decision to pull all but one of my books out of print. I had lost faith in their publisher, Canongate Books. The main problem was the lack of communication. This had been an issue for some years, and I’d even discovered, by chance, three editions of my work that nobody had told me about. I wonder how many more there are that I’ve never seen (seriously, publishers – if you’re going to print a distinct edition of a book, the least you could do is tell the person who wrote it. It’s balls-out dereliction of duty not to). Every time something like this happened, and I found out, they would say, Oooh, it won’t happen again, but there seems to be no introspection at management level and, with stultifying predictability, it would happen again. This was frustrating enough, and when my main contact took to ignoring my humdrum queries about contracts/royalty statements/rights, etc., alarm bells rang. (I can sense you stifling a yawn. You’re right, this is tiresome, but having set up these deals without an agent I had to keep on top of this sort of thing myself.)

I’d lost patience with them and had taken my most recent book elsewhere, but my backlist remained in place. I’d hoped we could stay on civil terms for the sake of the children, but it wasn’t to be. Not wanting to be stuck doing business with people who were cagey about finances, I requested they return the rights. They insisted on keeping hold of them (while still not answering the questions I’d been asking – they were, and continue to be, particularly evasive about the editions they’d published in the U.S. a few years back) so I dug in, looking for a way out by spending every spare moment combing through old correspondence, contracts and royalty statements, with all the joy that brought.

Throughout all this, something kept niggling: I’d not been paid a penny for my novel Timoleon Vieta Come Home since 2004, the year after it came out. I’d raised this with my main contact in 2010, after yet another demoralising £0 balance on a royalty statement. This kind of enquiry is an awkward one, because you wouldn’t be making it if you weren’t concerned that something was amiss; an author/publisher relationship is built on trust, and the clear subtext here is that your faith in their accounting has wavered. It’s obviously a very big deal to raise these reservations, yet a recent trawl through old correspondence reminded me that it took three letters of decreasing diplomacy to get an answer (seriously, publishers – if an author makes an enquiry, just answer it. It’s part of your job, and if you don’t we’ll start wondering whether you’re up to something. Perhaps you are). Eventually I was told that they’d looked into it and that everything was as it ought to be, that I’d accrued a debt on the title for deep accounting reasons that I couldn’t possibly understand. ‘Fair enough,’ I said, embarrassed for having asked.

It never seemed quite right, though – I couldn’t help feeling as if they had patted me on the head and told me to run along. I tried to push these suspicions away, because quite often people who think that money is being kept from them are having a funny five minutes. And besides, I’d had my answer: they’d looked into it, and everything was fine. Where do you go from there?

These misgivings – loopy as they seemed – kept coming back. Years of demoralising £0 balances and questioning-my-sanity later, I tentatively mentioned this odd-seeming number-crunching to a few allies in the biz (I do have some, believe it or not), and every one of them spluttered into their cornflakes. I don’t know why they were all eating cornflakes when I told them, but they were. The more people I mentioned this to, the more cornflakes were spluttered into – everybody I spoke to thought it sounded as fishy as Milky Pimms. Only Canongate Books’ cornflakes remained unsullied by splutter; only they didn’t seem to think it was odd that I’d not been paid for this book, which had been a modest success, since the year after it came out. I asked them again to look into this, but my increasingly desperate enquiries were casually batted aside, and then blanked. The old Closing Ranks/Wall of Silence trick. At every point I was treated as though I were Foolish and Deluded and an Author of No Brain at All. There were times when I thought they could be right, but the longer this went on the surer I became that my books were not in safe hands.

. . . .

I don’t know about you, but I can’t afford to send in auditors or pay for legal letters. I am, though, blessed with the tenacity of a rabbiting terrier. In the absence of civil answers to civil questions (or, latterly, incandescent ones) I decided to conduct my own audit. I have no idea how to conduct an audit, so I just gave it the full Chris-R. Faced with this, they finally – finally – scuttled back to their financial records. In the days before Christmas they returned with the admission that my hunch was bang on: in spite of their assurances to the contrary I had indeed been horrendously underpaid for ‘Timoleon Vieta Come Home’. If you want to know how it feels to find out that you aren’t mad after all, that your publisher really hadn’t been paying you properly for thirteen years, this just about sums it up. It was not a fun time.

In hindsight, this was a sort of grotesque deus ex machina: having spent such a long time haughtily dismissing my concerns, there was now no way they could continue to hold on to the books. They paid the acknowledged missing cash, and put a bit on top that they had unilaterally decided would make up for lost interest over the preceding years. I didn’t agree with the figure they’d settled on, and couldn’t convince them (still can’t) to acknowledge the arbitration clause in the contract, so it took a further six months of gruelling warfare, culminating in a close reading and furious waving of the as-fun-as-it-sounds Late Payment of Commercial Debts (Interest) Act 1998, to squeeze an acceptable settlement out of them.

Now, I know what you’re thinking: everybody makes mistakes – it could have been an oversight, a slip of the quill. Maybe it was, but it didn’t just happen once – it happened twice. Twice! I wonder whether Lady Bracknell would have had something to say about that. So why did the dough go missing in the first place? I wish I knew. The extent of their explanation was: The team here has calculated that due to errors on the royalty book that happened in 2004 and 2005 – where duplicate records of unearned balances were noted – you were underpaid £x. I expect that made your eyes hurt. (Seriously, publishers – next time you find yourself explaining how a huge amount of a hard-working author’s royalties came to end up in the silken pocket of your company’s Oxford bags you might want to try doing a bit better than this). A request for clarification didn’t yield any more than it having been human error. That’s something of a catch-all: a human had certainly erred. Beyond that, it was all left vague. They sent through some single-page summaries of accounts, as if that would clear things up. All I knew for sure was that a lot of money that should have come my way had, for deep accounting reasons that I couldn’t possibly understand, stopped shy of my bank account. I asked for a fuller picture of how this could have happened – twice – at which the human error line was modified to the comparably helpful Oooh, it’s all very complicated and we don’t really know. Unlike me, they weren’t interested in finding out. In lieu of proper answers they sent some further impenetrable spreadsheets, none which helped me get my head around it all. Somewhere along the line I discovered that these anomalies had happened in the vicinity of the U.S. operation that I’d had (and still have) so much trouble getting answers about.

Canongate Books’ final line is that it was a mistake. I’m not going to argue with that, but again it’s a catch-all. Maybe it really was a simple case of my royalties being innocently siphoned away on two separate occasions. I am very much open to the possibility that the version of events that they’ve settled on is correct, that the quality of their bookkeeping really was in freefall to the point where they were inadvertently, and repeatedly, keeping one of their authors’ wages to themselves. (And these are wages – though this may be in conflict with popular perception, people who write books are still sent electricity bills, and every sale counts towards our livelihoods. It’s rarely enough – most of us have to work shifts at Spatula City to make ends meet. I know I do.) I can’t help wondering, though, who was doing their internal stocktaking at this time. Sooty & Sweep I would guess, judging by the quality of their work. It’s all very well playing the human error card – and it may of course have been just that; everybody makes mistakes at work from time to time – but a company that is fit to trade should surely have a system in place to see that errors are caught and corrected. Mistakes of this magnitude, however accidental, should have been spotted, if not shortly after they were made, then when I pointed straight at them in 2010. We’re talking thousands and thousands of sales. Thousands!

Link to the rest at Dan Rhodes and thanks to A. for the tip.

The OP continues further and is well worth the read.

This is a cautionary tale for all authors.

Here are some basic business steps to take with royalties:

  1. Check your royalty statement – carefully – promptly – every time you receive one.
  2. If you see anything fishy or anything you don’t understand, send a letter pointing out the fish and ask for an explanation. (An email will probably work as well, but why not send both a letter and an email!)
  3. Save a copy of the royalty statement (of course) and save a copy of everything else you receive from or send to the publisher. Make certain it’s stored where your dog (digital or actual) can’t read it.
  4. If you don’t receive a useful response or at least an acknowledgment of receipt with a promise to send more information shortly within a week, send another communication reminding them that they owe you information and copy someone else at the publisher who ranks higher in the organization than the person to whom you sent.
  5. Continue until you receive a useful response. Add a paragraph that lists all your prior communications with the date and a note describing the nature of any response or that you received no response. Keep adding more people to the list to whom you are sending copies and note all the people you are copying at the bottom of the letter, email, fax, etc. Don’t remove anyone from the cc: list for subsequent letters/emails, just add new recipients.
    1. If your publisher is part of a larger publishing group or owned by another company, start copying people higher up the chain.
    2. If the publisher or an owner of the publisher has a legal department, send a copy to someone in the legal department.
    3. If this doesn’t generate a response, look up the contact information for the Attorney General in the state where the publisher has an office and add her/him to your copy list.
    4. If the publisher or its owner is a publicly-traded company you can probably find a list of its board of directors and add them to your CC: recipients.
    5. Send a copy of your letter to any authors’ organizations you can think of.

Your childhood etiquette instructor would probably say this isn’t polite, but you tried polite with your early communications and failed to receive a polite response. You might conclude that polite isn’t going to work in this case.

There is an old saying (at least in the US) that a squeaky wheel gets the most grease.

If you’re not being treated in a professional manner by a publisher, you’re not receiving grease.

If your bank misplaced some of your money and didn’t respond to your questions right away, you wouldn’t (or shouldn’t) hesitate to make a fuss. If your publisher is keeping money that belongs to you, it’s the same situation.

Accounting mistakes can and do happen. When such mistakes occur, ethical business organizations promptly own up to those mistakes, make the numbers right for their customers and tell them what happened.

Properly-run businesses don’t repeatedly make accounting mistakes, particularly accounting mistakes that reduce their payments to others. PG says don’t patronize or partner with businesses that aren’t managed properly.

Don’t fall into the insecurity trap of thinking something like, “If I cause too much trouble, my publisher won’t publish any more of my books.”

If you’re an amateur who writes for fun, that might be a reasonable train of thought.

If you’re a professional and want to be paid for your work, it’s irrational.

Allow PG to rephrase the insecurity trap: “If I cause too much trouble, my publisher won’t publish any more books that I won’t get paid for.”

Royalties, The Business of Writing

14 Comments to “The Curious Incident of the Dog & the Missing Royalties”

  1. I have never been traditionally published (thank god) but of course I hear the horror stories.

    Now that I am starting to indie-publish others under a different imprint, I’m hearing even more. I’ve published one fellow’s 1st novel (10 non fiction books, very well received, in the same interest area). None of his trad publishers had any interest and he’d been despairing of it ever getting out. It’s doing well.

    He’s very well-connected, so suddenly I’m being contacted out of the blue by his peers who have trunk works and current work that their trad publishers don’t care about, even while they’re neglecting the works they already have. These are good writers on unfashionable non-PC topics (hunting, sporting, men’s adventure, new West, etc.)

    Talking to them is like talking to abused wives. They’re hesitant, unsure of themselves (despite pretty illustrious careers in some cases), and prepared to submit to yet more misery to get their books out.

    Very, very sad. Half the kick for me is getting their worthwhile work into print and helping them regain the appropriate confidence.

  2. One other admonition. Do not think that if you have an agent, you can avoid all of this. The sad fact is that you will probably be doing it when royalties inexplicably go missing in their offices.

    What jumped out at me in the OP was:

    having set up these deals without an agent I had to keep on top of this sort of thing myself

    • I had a very nice German publisher interested in one of my books. But as soon as he heard who the agent was for the German rights, he started asking me if there was any way we could deal directly with each other. There wasn’t, but he did follow through and the German edition came out a year or so later. I went on to find out from others that this rights agent was an incredible pain to deal with, and had killed numerous deals because he just couldn’t be bothered.

      One of my naive expectations was that since our US publisher a large foreign rights network, they would be going out and introducing our book (along with others) to foreign publishers in their market. Nope. They just sit there, waiting. Of 14 foreign editions, I sold nine of them, foreign publishers arranged three on their own, and only in two cases did the foreign rights agent actively sell the book and make the deal happen.

  3. A good agent who knows their stuff would never let this go on so long. I’m also interested that you put authors’ organisations down the list, PG. The Australian Society of Authors will vet contracts for a modest fee, and undertakes audits where they perceive a benefit to other members. And much as I love my agent, I read contracts and royalty statements closely, especially when the publisher’s cover letter points out “a few small changes” that I shouldn’t worry about. Um…changing licensing to acquiring is not a small change. I also spent a year batting contracts back and forth when one publisher wanted updates to cover digital books. In the end, we went with the status quo and my royalties are much the better for that.

    • Felix J. Torres

      Any changes a tradpub asks for will be to the publisher’s benefit, not the author. Like the time (circa 2009, just as ebooks were hitting the mainstream) Random House sent out contract amendment letters to the authors, bypassing agents, offering 2% (?) higher pbook royalties in return for cutting digital royalties in half to 25% of net. Because of reporting lag, the authors were looking at the pre-Kindle digital sales numbers, not the boom that followed where ebooks grew to a quarter of the market. Which the publishers had already seen. (Then came agency, but that’s a different, dead horse story.)

      BTW, the agents objected to being bypassed, not to the terms. Which they had no problem with.

      A lot of the legacy authors complaining about declining royalties forget they eagerly gave away half their ebook royalties.

  4. Q: Hey, where are my royalties?

    A: The dog ate them. 🙂

    • During the 15 years my dog lived she ate a lot of things: asparagus, bellpeppers, forgotten pizza, rabbit poop, crane flies, food out of another dog’s bowl, but never did she eat royalties. Or any kind of money.

  5. Terrence OBrien

    There is an odd notion among some that book people are a literary fellowship of like-minded people of goodwill. Having risen above the normal grind of business, they operate on an elevated plane.

    I suspect this group has been shrinking as independent authors take more power in the market, and traditional authors learn more.

    Think of it like Visa cashing your check but failing to credit your account for the payment.

  6. Richard Hershberger

    Of course if you are self-publishing, this probably means you are publishing, or at least selling, through Amazon. As bad as the experience described here is, it compares favorably with dealing with Amazon when its algorithm goes out of wack.

    You can only avoid the possibility of this sort of thing if you truly self-publish and sell directly to your readers. Even then you will be dealing with vendors of one sort or another, but at least you will be in a stronger position with them.

    • Felix J. Torres

      There really is no difference between “self publishing” and “truly self publishing” as you put it.

      In both cases the author distributes through whatever channel *they* choose to distribute through Apple, whether it be Nook, Kobo, Amazon, Google, Ingram, their own website, or the trunk of their car. Many even (gasp!) do all of the above.

      That said, I personally don’t see any special virtue in purposefully ignoring 50% of the total US market, 75% of the digital sales market, or 95% of the ebook rental market.

      Some folks do and the beauty of self publishing is they can: nobody can deny them that freedom. It’s all on them, not an agent of dubious competence or a faceless giant multinational based thousands of mikes away.

      The 21st century ain’t all bad.

    • Richard, you don’t get to choose if you are traditionally published or not. You can choose Amazon, though. So no, it isn’t better, because you won’t be tradpub’d.

    • Terrence OBrien

      it compares favorably with dealing with Amazon when its algorithm goes out of wack.

      When has an Amazon algorithm gone out of whack and was left uncorrected?

      I understand “out of whack” to be not doing what it has previously been regularly doing, and what was intended by Amazon. It does not mean the algorithm fails to do what authors would like it to do, contrary to Amazon’s intentions.

      And when it does go out of whack, what percentage of books are affected?

    • I may be mistaken, but I thought most traditional publishers also sell through Amazon (and gain a fair chunk of their sales through Amazon).

      So surely if Amazon’s algorithm did/does go out of whack, then that affects all authors selling through Amazon’s platform, whether directly or via a middleman such as a traditional publisher.

  7. Allow PG to rephrase the insecurity trap: “If I cause too much trouble, my publisher won’t publish any more books that I won’t get paid for.”

    Oh, if that were the only problem. The problem is “If I cause too much trouble, my publisher won’t publish any more books and will put my name on the troublemaker list so that no one else will either.

    The publishing industry is a small and incestuous one; the jungle telegraph is the first example of FTL communications. This is particularly true within a genre.

    In the US, taking any sort of legal action means that your case and all its’ details will be in databases and court records. There are entire companies based on the idea that even if it isn’t cricket (or legal) to ask someone directly if they ever filed a lawsuit, they can ask a third party to find out and you will never know if it has been done. And it has only gotten worse with the invention of webcrawlers, social media searches, etc.

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