Thursday, 5 February 2015

Publishing contracts: three key things to watch for

Some years ago, Jamie Thomson and I were setting up a development company using investment and personnel from the games publisher where we worked. There were three contracts to negotiate (for two games and the start-up itself) each the size and complexity of a government white paper. So every evening after work, Jamie and I would sit with the publisher’s lawyers hammering out the deal point by point. Days of this. Did I curse my lot? Oh yes. ‘I’m game designer, not a contracts lawyer,’ was the habitual grumble.

Why not use our own lawyers? That’s an expensive way to begin a start-up, since each clause had to be parsed as if it were a safety instruction for the ISS. The main reason, though, is that lawyers can’t do your negotiating for you. It’s like an author with an agent. Don’t you and the agent have congruent goals? Not quite. He or she gets a percentage, but you’re the one who has to live by the contract’s terms. Make sure, therefore, that you’ve scrutinized and agreed every point.

These days you don’t have to be involved in a start-up to need to know your way around a contract. Authors have become savvier now that they have the option to self-publish. About time, too. When I started out in the business, it was common for authors to sign publishing deals that gave no guarantee of print runs or marketing spend. It still is, actually. Quite recently a friend of mine had a novel published by one of the Big Five that I have yet to see in any bookstore or reviewed in any magazine or paper. They might as well have put concrete overshoes on his manuscript and tossed it in the East River.

It doesn’t have to be this way. There are three things that an author should look out for when negotiating with a publisher. Attend to those and the contract can be, as an idealist once said, ‘an agreement between friends to make sure they stay friends.’

First, a publishing deal is a joint venture. In any joint venture, you can only agree an equitable division of spoils when you know what each party is putting in. Now, there’s no way to know the value of a novel before it’s published – if there were, we’d all self-publish. But you do know how much money (in terms of time and risk) you invested in it. Say it’s nine months. What is nine months of your time worth? Once you’ve settled on that, find out what the publisher is going to be investing. They have no reason not to be specific; this is a partnership after all. Say that their editing, design, printing, distribution and advertising tots up to the same as your nine man-months. That’s a fifty-fifty JV, and don’t let anybody tell you any different. The advance has to be factored in, of course, but remember that you’re the early investor here. You plunged on in the wild surmise that nine months at the keyboard would result in something that others would deem worth reading. Publishing your book isn’t a personal favour.

By the way, authors can be delicate flowers so maybe you don’t like the idea of demanding to know the publisher’s business plan for the book? Spin it around. Do you think they would sign a contract that specified all their obligations but left blank the details of what you were going to write? The reason they wouldn’t is they can always do a deal with someone else. And so can you. You have a finished manuscript. You can walk across the road and publish with someone else. They want your book, remember. Any glint of magisterial disdain you may detect is really the shiny sweat of desperation.

For the second tip, skip to the stuff at the back: what does the contract say about its own termination? In the old days termination might be triggered by a book going out of print, but with print on demand that’s meaningless. Instead you’ll need to agree a minimum level of sales. Consider that and other termination conditions. Your aim is to make sure that the rights don’t remain tied up in perpetuity. The day may well come when the publisher has no great interest in promoting your book. Fair enough, it’s not their baby, but you won't feel the same way. The partnership then no longer makes any sense, so make sure you aren't going to be chained together after that point is reached.

Thirdly, be aware that it’s all very well to make statements of intent, but the contract has to back them up. Short of a default that triggers actual termination, what happens if one of the parties fails to do what they said they would? In the bigger world, a company might undertake not to dump dangerous chemicals in the sea. If they do, they are fined a million dollars, say. Right there you have a clause that, if the cost of processing those chemicals to make them safe is more than a million, stands as a guarantee that they will get dumped in the sea. A contract is a set of game rules, you see. You sign and then you start playing the game and each side will see what they can do to win.

This isn’t cynicism, just reasonable caution. You’ll hear of the ‘Chinese Contract’ – supposedly an agreement so wisely constructed for the win-win that neither side has any reason to game it. But there are zero-sum elements in the most harmonious partnership. My wife and I can’t both have the whole of the last Rolo. You may notice grey areas in a proposed deal, and it is your job to identify them and seal up the gap. Nobody who intends to play fair would want to leave anything undefined and if they say, ‘We can decide that later,’ then leave at once. But when you do see and fix those loopholes, keep a smile on your face. ‘An agreement between friends,’ remember. Or to put it another way, ‘It’s not personal, it’s business.’


  1. Thanks for this, Dave!

    Some years ago an extremely talented young editing client of mine was offered publication by a micro-publisher (unagented). She got the contract almost all the way hammered out, but went three rounds with them over their insistence upon an eternal-perpetuity clause that would have allowed them permanent ownership of her novel, rather than the more-standard three-year limit.

    I looked them up--their lack of an online presence meant I had a heck of a time finding them, and they had no online marketing plan for her novel at all. I told her not to sign. POD would have given them unlimited ownership of her work for the rest of her life, without even a guarantee of promotion.

    However, her lawyer husband told her to just go for it if she wanted to be published. Times are hard, and all that.

    Finally a much-published elder colleague told her, "Get the hell away from those people." So she walked.

    She still recalls it in a cold sweat as having just barely dodged a bullet.

    As they say: "Good fences make good neighbors."

  2. Dave's post is so sensible. I like the fact that he addresses the mindset the writer should have as well as the points to beware of.
    It's so easy for writers to feel they shouldn't assert themselves, that they are the pupils in thrall to masters. A publishing contract might look like a lottery win if you've longed for it, but you have to consider how it will look in a few years' time.

    Victoria, your story about your client is exactly the kind of horror scenario that authors need to be aware of. It even happens with author services companies - writers find they have signed away the rights in their work - AND they paid for production. Thank heavens for editors like you.

    Incidentally, Dave asked me to add a link here to a post I ran recently - on weighing up whether to self-publish or seek a deal.

    1. Victoria, I'm just hoping that your client's marriage survived her husband's bad advice. But didn't I say that lawyers can't negotiate for you? Not even when you're married to them :)

      "Good fences make good neighbors." Yes, that's it exactly.

      There are still publishers out there who believe themselves entitled to exploit authors. A publishing friend of mine once confessed after a few drinks that they (publishers) generally regard us (authors) with "fear and loathing" and that often leads to a kind of treatment that shouldn't be meted out to serfs.

      An example: very recently an author friend of mine was asked to work on a book that had been originated in-house by the publisher. So this was an anonymous work-for-hire job. He did his sums and realized that they would be paying him less than the statutory minimum wage. He mentioned that on Facebook (not naming the publisher) in order to make the point that for freelancers these days there is no minimum wage, not if you want to eat. The publisher saw the comment and cancelled the contract. To get the job back, he had to grovel to the editor, and finally they relented and took him back - at a reduced fee. A perfect example of Mamet's point in this clip from The Spanish Prisoner:

      Jimmy: I think you'll find that if what you've done for them is as valuable as you say it is, if they are indebted to you morally but not legally, my experience is they will give you nothing, and they will begin to act cruelly toward you.
      Joe: Why?
      Jimmy: To suppress their guilt.

    2. Roz, isn't that the eternal modern conundrum: aspiring writers throwing themselves at publishers because 'being published' has become equated with 'being writers'? It creates a real bottleneck, a terrible problem for serious writers negotiating for serious careers.

      And yes, Dave, I think her marriage survived. :) Lawyers operate in such a rigidly-defined world that they can't even give you advice on your best interests if you've instructed them to do something else.

      It's amazing how much of what people do to each other is done in order to suppress their guilt. That's the gist of Notes from Underground. Dostoevsky has taught me more about why people do bad things than any psychologist.

  3. The key to contract negotiation is preparation. Writers need to do their homework before signing on the dotted line. There are plenty of books and resources available to help writers understand publishing and self-publishing contracts, at least enough to avoid the huge mistakes.

    1. Quite right, Helen, and of all those books I've yet to find one better than Getting To Yes - see Amazon links above.