Contracts

Secrets of Publishing – Publishing Contracts: What is negotiable and what is not? 

[Many academics confronted by a lengthy book publishers' contract tend to feel confused and hesitant. What does all this fine print mean? Their work is their professional intellectual property. How much control should they relinquish and what should they get in return? It is a difficult position to be in. Who to turn to: the publisher with its smooth assurances? The advice of colleagues? Author/writer organisations?

This page is to assist new authors to be more critical of both publishers and less well-informed advisers. These comments are not intended to imply a lack of professional ethics among publishers or author/writer organisations.]

The Publishing Agreement

You know a publisher is taking you seriously when you receive a publishing contract to sign.
A Memorandum of Agreement (as it is often called) is normally many pages long with much legalistic fine print.

Why have an Agreement?

It specifies the rights of each party in the publishing process. At its core is an exchange of promises: the author promises to write and deliver a manuscript and the publisher promises to publish and sell the work.The agreement is made legally enforceable by the publisher’s promise to pay a royalty to the author in return for the rights granted to the publisher.

Why is it so long?

Apart from these essential elements a publishing contract has much else besides. There are conditions, qualifications, explanations, numerous ‘If this happens, then this…’  and much more.

What does it mean?

Is the contract simply designed to strip authors of their legitimate rights with little financial return (as many author associations would argue)? Or does it simply make clear the nature of the relationship between author and publisher (as most publishers would argue)? There is some truth in both sides.

From the Author’s point of view:

The author may work unrewarded for years on a book and then receives a mere 10% to 15% of the publisher’s return (eg. $2.25 on each copy of a $25 RRP). (The bookseller on the other hand, plays no part in writing or producing the book, purchases stock it can return if unsold, provides shelf space and a cash register and receives up to 45% of the retail price.) The publisher through the contract takes every conceivable right (electronic, book, film etc.), in every place (global, all languages), but frequently makes no attempt whatever to exploit these rights. The Publisher may insist on a non-competing work restriction, and may demand an option on the author’s next work, but does not even irrevocably commit itself to actually publishing the finished book (the manuscript must be ‘acceptable in form and content’ when submitted).

From the Publisher’s point of view:

It is true that publishing contracts tend to be weighted in favour of the publisher. But then it is the publisher who invests (shareholders’) money in expensive production, marketing and distribution. The publisher has both a right and obligation to ensure, so far as possible, the security of, and a return on its investment.

To put it another way, what does an author lose if a book sells only 10% of its print-run? The author can still proudly point to his/her work in print (for a while anyway). The author stands to lose mostly self-esteem and dreams of fame and riches. What does a publisher lose?  Money, and lots of it. The publisher forgoes the income and profit, carries the stock write-off, and wastes resources which might have been better dedicated to another more successful project. If a publisher’s books perform in this dismal fashion often enough, staff may be sacked and ultimately it will be forced out of business. So a publishing contract tends to be worded strongly to protect the financial interests of the publisher.

Content of the Agreement:

Apart from detailing the royalties payable and the rights granted, most clauses in publishing contracts are concerned with what happens at various stages of a book’s life. Most of these definitions are there because of past (often unhappy) experiences of publishers and authors. The contract is designed to resolve potential conflict before it starts. As such, most clauses serve a useful purpose. Below is a list of what is normally included.

Here is a list of some of the non-royalty issues normally covered by a contract.

• how the manuscript will be submitted,
• what editing and proofs will be provided,
• who provides and pays for illustrations and permissions,
• who owns the copyright (i.e. who owns the work)
• the author’s guarantee of originality (intended as indemnity for a publisher in case your work contains plagiarism or copyright breach)
• who controls pricing, production matters and marketing (the publisher)
• when royalties will be paid and how disputes on royalties will be dealt with,
• the author’s obligation to revise the book,
• the author’s obligation not to produce a competing book,
• at what rates the author may buy copies,
• the publisher’s obligation to keep the published book available,
• the author’s obligation to offer his/her next book to the publisher, (option clause)
• what happens if someone plagiarises the book (breaches copyright),
• how rights sales income will be split,
• how the book will go out of print (ceases to be published)
• how any disputes between author and publisher will be resolved.

Sign or Negotiate?

Should I just accept and sign the contract?

Very few publishers and authors have serious disputes. If however a dispute arises, the contract forms the basis for settling the dispute. Furthermore, no two publishing contracts are the same, some are more reasonable than others. So it is worth checking. If you are unhappy with any clauses, ask for changes before you sign. It is too late after you sign. So long as you remain reasonable in your requests, a publisher should always at least discuss your concerns.

Negotiating changes to the contract:

Two issues come into play if you seek to negotiate changes in a publishing contract.

• First, there is much in a publishing contract that publishers will not, or will be very reluctant to alter. This may be because they want standard system arrangements (eg. when royalties are paid), or they wish to have final control of the project for efficiency’s sake (eg. who has final say on cover and design), or because they have greater knowledge (eg. who controls marketing), or because it goes to the financial value of the contract (eg. who decides retail price).
• Second, negotiating any agreement is about relative bargaining strength. You may need to face facts. If you need the publisher more than it wants you, your chances of varying a contract in your own interests are severely limited. Equally, even if the publisher is pursuing you, there are some changes which publishers will not make. Large multinationals may have company policies which no author, no matter how desirable, will be able to alter.
• Having recognised this, (something author organisations often fail to do), it is worth looking closely at the following sections of your contract. You may be able to negotiate some improvements. You certainly should be aware of your obligations under the contract (eg. non-competing clause).

Clauses to watch  :

• Copyright Ownership - you should keep it, granting an exclusive licence to the publisher. Some multinational publishers take your copyright by their contract. Be wary, this means you have lost all ownership in your work. The publisher can use your work in any way, and in any other publication, as it sees fit.
• Royalties - miserly royalty rates can be improved, but there is a limit, especially for new authors. 10% to 15% of net receipts is pretty standard.  (‘Net receipts’ means the amount of money the publisher receives after bookseller discount, not the recommended retail price) . Remember when you negotiate royalties, in the publisher’s eyes what you are actually splitting is the bottom-line profit, not the retail price.
• Rights Granted - the more generally these are expressed, the less you are left with. If you have particular concerns (eg. you know an interested Spanish publisher, or your uncle is a Hollywood film producer) you may wish to exclude certain rights. Do not hesitate to ask, but do not be unreasonable. Most publishers see ‘all rights’ as an inherent part of the value of the contract, even if they are never exploited. Specific exclusions, or occasionally, time limitations can be negotiated.
• Project Control - if something is very important to you (eg. title) you may be able to keep control. Alternatively, you may be able to include phrases like ‘after consultation with the author’ or ‘by mutual agreement’ in some clauses. But do not expect to get control of the production process (cover, design, form, layout etc.).
• Future Revision - An important clause, particularly for non-fiction and textbooks. This clause is occasionally exercised against an author’s wishes. What’s the problem? Say, in the future, your book sold well but you’ve moved on. You don’t want to take the time to revise it, or your are not able to for some reason, what happens? Under this clause a publiser is empowered, for example, to sign-up a revising co-author (of the publisher’s choosing) to revise the work as the publisher sees fit. New chapters and other changes may appear under your joint authorship in a new edition. The better your book has performed, the more likely such an event will be if you can’t revise it. It may prove a difficult clause to negotiate – it is an important financial clause for publishers. However, you may find the more severe versions can be softened a little (the author may have first option to nominate a willing co-author, or certain length of time to produce a revision, or a certain guaranteed royalty regardless of a co-author, etc.).
• Non-Competing Work clause - read it. Understand your obligation. It is normally in textbook contracts. This may affect your freedom to write and publish (at least with a competing publisher) in the future. It is unlikely this clause will be removed. However, over generalised or severe versions may be softened. For example, rather than no competing work in ‘Introductory Physics’, you may qualify it to no competing work for ‘science and engineering undergraduates in a first course in Physics.’ Is this different? Yes, e.g. other undergraduate students, post-grad students, technical and school students are all excluded.
• Option Clause - normally in trade book contracts. It could be construed as a constraint on fair trade. Many publishers will delete this if asked. Alternatively, try to get this clause made non-exclusive or non-binding (ie. you will offer your next work to this publisher among others, and may or may not accept its offer to publish).
• Out of Print - these clauses are often convoluted and vague. Contracts should be clear on how and when the book is declared out of print and rights returned to you. Most publishers will wish to control when a book goes out of print. However, the process should be clear.
• Termination clause - most lawyers would tell you there should be one. (How, when or in what circumstances you can terminate the contract.) However, apart from a clause about if the publisher goes into liquidation, traditional publishing contracts are indefinite in duration. Publishers see this as an essential part of recouping the financial investment in a book. Whether you seek this because of legal advice or not, it is unlikely a publisher will accept a time-limited contract or termination-by-notification clause. And be wary, if a publisher accepts such a clause, it will affect the marketing effort given to your book.

 
Any other issues?

Copyright is what publishing is all about.
Make sure you own your original work, or have permission to use anything not yours
granted in writing to you (known as Permissions) – for everything in your work.

Be warned: authors (and publishers) get sued,
lose reputations, jobs and careers over serious breaches of copyright and plagiarism.

Summary

The publishing contract is an organised way of approaching a relationship between author and publisher. You may be able to negotiate a few changes in it, especially if you have a sought-after book or reputation. If you are not happy with your potential publisher, talk to some others. There is nothing like a little healthy competition to obtain a more reasonable attitude to reasonable requests for change. However, do not expect to revolutionize the publishing world in your first contract. It won’t happen! Trying to make it so (as some Author organisations suggest) will create pointless headaches and may quite unexpectedly prevent publication (when the difficulty v benefits balance reaches a publisher’s tipping point.)