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Top 10 Must-Know Tips for Negotiating Your Publishing Agreement for Authors and Writers

If you are an author or writer, and have been approached with a publishing agreement by a publisher, literary agent, or other publishing company, then congratulations – you’ve accomplished what  every writer aspires to achieve, and could be facing one of the most exciting developments in your literary career. Before you sign the documents, however, it is extremely important for you to understand what you’re signing and what the terms of the agreement are, and how those provisions will change your rights.

We often get brought in far too late in the process, and as a result, often have to tell authors how little rights they have left, rather than collaboratively working with them to ensure that they are being dealt with fairly. If you are an aspiring author and are considering an agreement with the publisher, publishing Company, literary agent, or other professional and literary industry, please read this guide before you go any further.

Obviously, this is not an exhaustive discussion of all the points that could be triggered by your publishing agreement in particular, and we strongly recommend that you obtain legal advice to ensure that your rights are protected, and not simply rely on this guide. With that being said here are our tips to negotiating the best terms you can when negotiating a publishing agreement:

#1.  It’s NOT Take it or Leave It

The first thing to remember with a publishing agreement is, no matter how hard the publisher or the person on the other side negotiating with you tries to persuade you otherwise, publishing agreements are NOT “take it or leave it” agreements. If you are being presented with an agreement and pressured into signing exactly as it is, without being afforded the opportunity to make changes, or even consult with an attorney, this is a huge red flag that you should not sign the agreement.

Being told that you only have a day or two to sign, or the deal will evaporate, or being intimidated or pressured to sign quickly are all hallmarks of an unfair bargain. The book is your idea – it is your baby, and you have worked perhaps many years to bring it to life. Why would you sell away all the rights your most precious possession to the first person who comes asking?

You should look at a publishing agreement as an opportunity for a mutually beneficial financial relationship in connection with the sale of a written work. If one side is being dealt with extremely unfavorably, it’s a bad deal. You don’t need a bad deal, and you should be prepared to walk away from a bad deal without feeling as though another deal will never come your way again. No deal is better than a bad deal, I swear to you.

#2. What Rights are you Giving Away?

One of the most central issues to book publishing agreement is exactly what rights you are giving away to the publisher. Most authors think that a book publishing agreement is limited to simply rights to publishing the book. Unfortunately, that is not the case. Many publishing agreements include ancillary rights, which not only give the publisher the rights to print, publish and sell books, but also to digital, electronic, and other versions of the book, audiobooks, electronic books, CDs, and other related material.

The publishing agreement might also contain a grant of subsidiary rights to the publisher, which would be for motion pictures, film, radio, stage, animation, merchandising, theater, commercial works, and all other types of works.  Subsidiary rights are extremely valuable, and shouldn’t just be given away. Have a few dates first before you agree to have the baby!

The publishing agreement could even extend rights to sequels, derivative works, as well as any content of any kind or nature in the principal work. There’s an enormous difference between giving a publisher rights to publish a book, and giving the publisher all rights of any kind and nature all types of media, worldwide, in perpetuity, forever, that might be triggered in any way relating to the book.

We strongly, strongly recommend that you read the grant of rights very carefully and make sure that it is limited to the actual rights you intend to grant the publisher, and no more. We have been counsel to authors with compelling stories and works who have been completely taken advantage of by the publisher and years down the line been informed that they signed an agreement that assigned virtually every conceivable right to the work to the publisher, for nothing, in a very unfavorable, one-sided, and abusive publishing agreement. As with all things in the entertainment industry, an ounce of prevention is a pound of cure.

#2 The Manuscript, Proofs, and Revisions

Another issue that tends to come up in publishing agreements is the mechanical logistics of delivery of the material, and the author’s right to revise the work. Usually, publisher can make a discretionary decision as to whether to publish the work. Good author-favorable provisions will require the publisher to notify the author if the manuscript is not satisfactory for publishing, and give the author a right to revise the work in a set period of time, for example 90 days or otherwise.

You should also try to ensure that the publishing agreement contains provisions providing that if the manuscript is ready to publish, publisher shall not materially undertake the meaning or text of the work without the author’s consent. Obviously corrections to quotations, errors in grammar, sentence structure, spelling, and editing to conform with the publisher style, are not an issue. However, if the publisher agrees that the work is good enough to publish, no further substantial edits should need to be made.

#3 – Creative Controls

Who keeps the creative controls and decision-making authority on issues such as cover, title, and edits to the substance of the work? This is also an important point that should be negotiated. Sometimes it is difficult finding a middle ground on this point. Obviously, there is no way for both author and publisher to have the final decision on creative controls, and one must be the final decision-maker. Usually, it is the publisher. However, the insertion of specific legal language, for example requiring reasonableness and expectations, as well as custom, practice, and usage, can help make the decision-making authority less of a black and white issue.

#4 – Copyright

Does the publishing agreement specifies who has the right to copyright the work? The dilemma that many authors face when it comes to copywriting their work is that, if they copyright their work before the publisher accepts it for publication, then there is a chance that the work will be materially different than before the publication decision is made. If the publisher takes the position that changes to the manuscript are needed or that other editorial changes need to be made, that will make copywriting the work prior to the publication decision purposeless. However, it is in the author’s great interest to own the copyright of the work outright, and not jointly.  Many publishing agreements, however, will state that it shall be publisher’s right to register the copyright of the work and all renewals and extensions of the work and in all countries in which the work has been published and made available for sale.

#5 – Royalties

Most authors focus too greatly on royalties when negotiating a publishing agreement, with only marginal attention paid to the other points raised in this article. This is not to say that royalties are not important – obviously they are extremely important, as they constitute the primary way in which authors are paid on the backend. The typical royalties provision in a publishing agreement is a flat rate for all sales, minus all expenses. Although this might seem innocent enough, it is not so, and authors take great caution to incorporate a number of bargaining points into the negotiation of royalties:

  • Stepped Up Rates for Sales. First of all, the royalty rate should not be flat. It should have stepped up escalations once the work sells a certain number of copies. For example it might be appropriate to receive 15% royalty up to 50,000 copies, which would escalate to 20% on sales of over 50,000 up to 100,000, and up to 25% royalty for all sales over 100,000 copies. Why? Because of the book is selling well, it is a sign of the book was well written, and the authors should be entitled to a greater percentage of the royalty for his or her successful written work.
  • Electronic Works.  The royalty rate should also be different for electronic and digital sales. It should be higher by 5-15% or more. Why? Because the publisher does not incur the same amount of expenses when publishing hardcopy or soft copy work as it does digital/electronic work.
  • The Advance. Authors should also attempt to secure an advance against all the royalties. Many authors are not always certain how advances work. In advances not separate income. In advance is an “advance” against all royalties that the work may generate in the future. For example, if a written work generates $100,000 of net sales in the first year after publication, and prior to publication, the publisher promised a $25,000 advance with 25% royalties to the author, then the $25,000 is subtracted from all amounts owed by the publisher to the author, which in this case would be $0.  To explain further:  25% of Royalties of $100,000 = $25,000, subtracted by the $25,000 = $0.   Note that in this example, the $100,000 represents net If it represented gross sales, expenses would have to be deducted. So for example, $100,000 gross sales – $15,000 in expenses = $85,000 in net sales. 25% of $85,000 in net sales = $21,250.  Since the advance in this last example was $25,000, and the author is only entitled to $21,250, then the work is and remains in an “unrecouped”  meaning that the author would not be entitled to any of the $100,000 in gross sales, until the remaining portion of the balance of the advance is paid through additional sales and “recouped.”

#6 – Allowable Expenses.

Are “expenses” defined in the publishing agreement? They should be. Otherwise, you risk having the publishing company bill anything and everything to your account. There are number of things that should never be billed to your expense account, specifically, rent, lease, wage, salary, other items considered overhead, as well as attorney’s fees for the publisher. In addition, one we negotiate publishing agreements for authors, we usually insert provisions that address expenses that benefit more than one author. So for example, a publisher could incur an expense that benefits 10 different        authors on its roster, rather than just one specific author. Should each author be billed for the entire cost, leading to 10 assessments of the entire cost, one for each author? Each author bear their fair and proportionate share of the entire expense that benefits everyone? Obviously the latter, but this is not how these are often done. It is important to specify these points.

#7 – What is the Publication Company Going to be Doing for You?

Publishing agreements often are missing a huge point, which is, what is the publication Company or publisher actually going to be doing? They should be undertaking a responsibility to help develop the work, publish it, produce it, manufactured, distributed, and undertake marketing efforts. If you’re publishing agreement is blank on these points and does not specify what the publishing company is actually supposed to be doing, this is a red flag. It will tend to indicate the publishing company wants to be loosey-goosey and not specify what their obligations are to be. This is going to make it impossible for you to ever accuse them of not doing their job. Here’s how the scenario often plays itself out: the publishing company purchases a work from an author for a $0 advance, and then sits on the work, doing nothing. The work is never published, never distributed, and the authors basically prohibited from trying to market the work to do anything else with it, because the publishing agreement was an exclusive deal. And when the author attempts to reason with the publisher, asking when they will do something with the work, publish it, try to market it, etc., the publisher takes the position that there doing nothing wrong and have no obligation under the agreement to ever actually do anything. This is not how it should be. Your Publishing Agreement should have affirmative obligations on the part of the publisher specifying exactly what publication services there be providing. When we negotiate these agreements, we insert provisions making it clear that they are to provide specific services, that they are to deal with the author fairly and in good faith, and maintain all fiduciary obligations to the Author.

#8 Out of Print

Authors and writers negotiating publishing agreements should also ensure that the publishing agreement contains provisions when the work is no longer in print. Generally when we are negotiating these types of agreements on behalf of authors and writers, we insert provisions indicating that if the work is out of print, that the publisher no longer has the rights pursuant to the publishing agreement and all such rights revert back to the author, with the author retaining all advances and royalties paid. The reason for this is because of the publishers not actually publishing the work on an ongoing basis in providing the author an opportunity to make royalties, publisher should not continue to have exclusive rights to do so.

#9 Audit Rights

One of the most important rights authors and writers have in publishing agreements is a right to inspect records and audit the publishers statements of account. Because publishers deduct all expenses from author’s royalties and income from publication of the book, it is extremely important that the author be permitted to receive a copy of the account statements indicating how much money has been earned and what expenses have been deducted, and also inspect the publisher’s records to ensure accuracy in the collection of income and deduction of expenses. For example it would be extremely inappropriate for publisher to deduct its attorneys fees and costs, rent, utilities, and other overhead items from the and author’s gross income, except that it happens all the time when authors sign agreements they do not understand and failed to properly negotiate. A proper audit paragraph will allow the authors account or lawyer to examine the publisher’s books within a certain specific amount of time of advance written notice, within a certain amount of time after each date statements are rendered. Furthermore, when we negotiate these types of provisions for authors and writers, we typically include provisions shifting the costs of the audit to publisher in the event there’s an accounting discrepancy beyond a certain percentage. So for example, if there’s an accounting discrepancy greater than 5% or 10%, the author should not bear the expense of the audit because the audit has proved to reveal significant discrepancies in the amount of money owed to the author.

#10 – Venue, Arbitrations, Forum

Finally, authors should also be very wary of signing agreements that mandate arbitration instead of a court or lawsuit, or require that all legal proceedings take place in a particular county or state. If the author is from a different state than the publisher, which is almost always the case, then the author must be aware that if any dispute arises with the publisher, the author will need a lawyer in the publisher state, which is very frequently New York or California. Our firm is licensed in California and can assist individuals in literary disputes involving California publishers or California contracts.

Getting Legal Help

If you’re an author writer and need an attorney to help you negotiate a publishing agreement, give us a call for a free consultation. We offer this guide to individuals who are not always able to get legal advice specific to their situation and publishing agreement, but of course, we must must caution that it is always best to have an attorney actually review the publishing agreement you’ve been presented with. We typically provide these type of services to authors and writers for a flat fee, which generally includes review of the agreement in question, revisions with redlined changes that neutralize unfavorable provisions, insert favorable provisions, and provide an explanation of the provisions at issue to the author, so that the author is aware of what they are signing signing. If you would like to get a free quote for review and revision of your work, please fill out the form below, upload your agreement, and you will receive a free quote within 24 hours.  We have represented numerous literary professionals, authors, novelists, screen writers, poets, and other authors and writers from many states and across the country, and will be glad to assist you.

AXIS Legal Counsel represents numerous types of entertainment clients across the country  in entertainment negotiations, opportunities, deals, and disputes. For information on retaining AXIS Legal Counsel for legal advice on any entertainment matter, contact [email protected] or call (213) 403-0130 for a confidential consultation about your legal issue, or visit our Entertainment Portal for more information.  AXIS is a Los Angeles entertainment law firm representing clients with numerous types of entertainment matters and disputes.

 

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