Mark Terry

Friday, October 13, 2006

The 15% Precedent

October 13, 2006
A gentleman (Robert) e-mailed me earlier this week to compliment Pitchfork and, as many aspiring novelists do, ask a question. No problem at all. He wanted to know my opinion about my publisher and I tried to give him an honest, thoughtful answer, which I won't publish publicly, although let me just say for the paranoid, that Midnight Ink, to-date, seems to be doing very well by me and I'm quite pleased with them. My response to Robert was a bit more nuanced.

Anyway, I was thinking about the advice I gave him about finding an agent, and thinking about the recent blog posts about basketed accounting (also called cross-collateralized or joint accounting) on JA Konrath's site, which seeped over to mine and at Lee Goldberg's blog.

Joint accounting doesn't do writers any favors, and although Joe seems okay with it (although it's no longer in his contracts), Lee is very much against it. So am I, although you can't always get rid of it.

But these discussions put me in mind of something, and I apologize if this seems a bit esoteric, but I hope all writers keep this in mind. You see, it has to do with books contracts, the publishing business, and what the standards are for the various things in your contract.

You see, it's clear from these discussions that joint accounting is desirable to publishers, but not to writers and agents. Yet, publishers regularly include them in their boilerplate contracts, and may in some cases even dig in, and voila, there they are in the contract if the agent doesn't give a damn, the writer doesn't know any better and isn't repped, or the writer doens't have the clout to get it out of the contract.

And part of the agent's responsibility is to point at things in the publishing contract and say, "This isn't acceptable and you know it. This isn't standard for the industry." This could be a certain split over some right, the amount of the royalties, or some language in some of the clauses. Or joint accounting.

And although an lawyer presumably knows enough about contracts to be able to ascertain if the language in a book contract is good, if the lawyer doesn't know what's standard in the publishing industry, then he/she doesn't know if that 8% hardcover royalty is reasonable or not (it isn't) and you should be asking for 10% or 12% or 15% or 20%.

Here's an example that the title of this blog entry is about. Back in the 1980s, when I was unsuccessfully trying to break into this business, the standard agent commission was 10%. Somewhere in that period it shifted to 15%. Agents essentially gave themselves a 50% raise. It wasn't like an agents' union negotiated it. What probably happened was some agent for some client decided he wanted more money and told his client, "Hey, I've been getting you good deals, I'm going to raise my commission to 15%." Or maybe, "I've got a lot of overhead, the cost of business is going up, my rent increased, I've got to pay for fax paper and Internet, and copying expenses--the price of paper, you know--so I'm raising my commission to 15%."

And the client said okay, and all the other clients went along, and pretty soon other agents heard about it and started telling their clients, "Hey, the commission's 15% now, that's standard in the industry." "Standard in the industry" is another way of saying, "Everybody's doing it."

It's one concern I have about the burgeoning market for small presses. Their contracts tend not to be as good as the industry standard, and because they're willing to read unagented manuscripts, many of their writers don't know what they're negotiating, and as a result, they get crappy contracts, although by and large they're thrilled just to have a contract. I was. I've been there. But my agent read the contract I had for Dirty Deeds and told me what she didn't like about it and why, and some of those "whys" were really, really problematic. But I didn't know any better. And High Country had the class to delete the worst clause when asked (retrospectively) so I could market my next novel to someone else.

Anyway, when I was thinking about Joe Konrath's defense of joint accounting, the one issue I didn't hear come up was the idea that if enough writers agree to it, then it will be considered standard practice and we'll all be stuck with it (including Joe) pretty much no matter where you are in your career.

That's a dire prediction, of course. But consider this: would you prefer you or your agent was able to say, "We need this part of the contract changed because it's not industry standard," or would you prefer your publisher say, "This part of the contract stays in because it's industry standard."??????

Just some food for thought.

Mark Terry


Blogger Robert Kuntz said...

I'm the fellow who wrote to Mark. Mark's response was more than just "nuanced" -- it was prompt, complete and very useful. He and JA Konrath are doing a real service, providing a free graduate level tutorial on how to survive the publishing business. So, in the first place, thanks.

Mark, your point about the evolution of an "industry standard" is exactly correct. In contract negotiation, as in any deadly conflict, much is decided before the battle is even joined. Some contracts -- the legal term for them is "contracts of adhesion" -- are purely "take it or leave it." Rent a car from Hertz and the contract is what is, and in tiny type to boot. Try telling the agent at the counter that you're just going to cross out the section about collision damage waivers and would they please initial where you've indicated.

For aspiring writers, life looks a lot like a rental car counter. That's true whether we're talking about your agreement with your agent, who presumably has interests closely tied to yours, or a publisher, whose interests begin to diverge from yours. I think many authors must become paralyzed by the adrenaline rush they experience upon learning that someone -- anyone -- besides themselves wants to see their book in print. They're so eager to move to the next step, they sign on, and gladly, to whatever extortionate, Faustian deal is put before them.

The only protection -- at least until you are, say, Robert B. Parker and can threaten to sell 100 million books for someone else -- is to remember something else about that car rental counter: That it's located in a concourse full of car rental counters. No matter how unequal your bargaining position may be, you always have the power to say "no." When the offer is "take it or leave it," there is real power in choosing to leave it.

Two things are necessary if you are ever to be able to "leave it." First you have to arm yourself with an understanding of the industry that is both deep and wide. (If you're holding out for a promise of leather binding and gold trimmed pages, you are simply kidding yourself; if you want to retain all your movie rights, that might be attainable).

Next you have to have enough faith in your project and yourself that you CAN say no to the unacceptable deal, confident that what you've made is fine and worthy enough that someone else will want it and treat it -- and you -- with respect.

And that, oh my ink-stained brothers and sisters, that is the difficult bit.

9:27 AM  
Blogger Mark said...

I had a nice and "nuanced" response to Robert's post here, but it disappeared into the ether when I tried to publish it (I hate that when that happens). I'll try to sum up again here:

1. It's hard to walk away from a book contract if you're a starving artist and have been wandering in the desert for a while.

2. An agent can be a good buffer between you and your editor because contract negotiations can get a little, er, crabby, and it'll be easier for you to listen to editorial advice if you didn't have a pissing match over the royalty split. Let your agent have the pissing match with the editor.

3. Most important point. You're not selling your book. You're selling limited rights for someone to use some of those rights. For example, you can publish my book in English in hardcover and/or paperback within the next 18-24 months and you'll pay me X number of dollars as either an advance and/or royalties, and you can do this until X date. That doesn't mean you can sell it in paperback in Swahili. That's negotiated separately. So are TV, audio book, dramatic, movie, etch.

And really, people, be careful of a clause that reads something like: "...published in perpetuity in all forms, electronic or otherwise, that are or may in the future be in existence anywhere in the universe."

Sure, you're laughing. But I'm not joking. Publishers try to slip in clauses like that that basically say, "We have the rights to publish your book in any way we want to for eternity in any form we want to anywhere in the universe, even if the meta-quasi-PDF-onion-skin-digital-intracranial-4D-movie technology won't exist for a 100 years, and we'll pay you 6% royalty on the net proceeds."

9:49 AM  
Blogger Mark said...

Oh and an addendum to my final comment that's more to the point. The real subtle clauses you need to be careful about do something like this:

1. You will agree to a contract for your next book at the same terms as this contract. [yes, folks. Publishers like to do this. Bestselling authors have gotten beat up by this one on their early contracts. Imagine you agreed to a contract for a $1000 advance and some low-end royalty and the book suddenly takes off and becomes a bestseller. Your publisher can still say, "Hey, according to your contract, you have to accept the next contract at the same $1000 advance." That doesn't mean it won't be negotiable, but you may have to hold out, which can be pretty nerve wracking.]

2. Control of the character. Apparently this one caused Tony Hillerman some issues early in his career, when some working in his early contracts suggested that the publisher owned the character of Joe Leaphorn, thus making it impossible for Hillerman to take a Joe Leaphorn novel to a different publisher.

Starting to sound scary out there, isn't it?


10:05 AM  
Blogger Robert Kuntz said...

Mark wrote:

"It's hard to walk away from a book contract if you're a starving artist and have been wandering in the desert for a while."

Like I said, that's the hard bit.

As for me, when "the call" finally comes I expect I'll be like Esau, selling my birthright -- let alone the Latvian stage play rights -- for a mess of pottage. I'm a lawyer; just because I might give good advice, that doesn't mean I can take it.

Thanks again for a great site, Mark.

12:15 PM  
Blogger Mark said...

And I'm not even sure that you SHOULD walk away from a bad contract if it's your first one, although there are places you can have a contract looked at if you don't have an agent. Getting your foot in the door is important. But you still need to pay attention to what's going on because it can come back to bite you in the butt later on.

It's not that a publisher is necessarily out to rip off the author. But a publisher is trying to get the best deal they can for themselves and they're very much aware that for first novelists (in particular) it's a buyer's market. I suspect most larger publishers are trying to be reasonably fair with their authors, but that doesn't mean they aren't working in their own self interest. Even a conglomerate will want to shave pennies off a contract in their favor. It adds up.

Small presses and indie presses, on the other hand... my concern about a lot of them is that they're just somebody with some extra money that wanted to publish books, and they set up their business and had a lawyer draw up a boilerplate publishing contract that really doesn't represent industry standard and authors just sign it because they so desperately want to be published. (And yes, I do pretty much talk from experience here).


12:23 PM  
Anonymous Eric Mayer said...

I think you're right that for small publishers contracts may be drawn up by overzealous lawyers who don't really know the industry well enough.

I can't see walking away from your first contract either. How likely are you to get another? However, having reached the goal of publication, then I can see choosing not to be taken advantage of -- contract or not.

At least we aren't painters. Lasi heard, industry standard if you sell a painting is that the agent gets 15% and the gallery at least 50%.

2:12 PM  
Blogger Mark said...

And I think sports agents get a bit cut, too.

I don't know what scriptwriting agents get or Hollywood agent.

5:17 PM  
Blogger JA Konrath said...

Let's take it a step further, Mark.

What if the writer was required to share more of the financial burden and pay back unearned advances?

I forsee a few things happening.

1. Writers would care a lot more about self promotion than they do now.

2. Publishing wouldn't be as much of a risk, and the publisher would have more money to put toward promotion.

3. Writers would be a bit more concerned about their books making money.

In a way, this has already happened. David Morrell didn't get an advance for Creepers when CDS published it. He took a bigger royalty percentage. Less money paid out upfront by the publisher translated into a bigger promo budget.

I understand that writers need to earn a living. I don't believe that they should earn a living at the expense of their publishers.

11:45 AM  
Blogger Mark said...

Did David tell you WHY he did this? Was it a show of faith or was it a tax issue?

I know Stephen King did this at one time and it was part publicity stunt and part tax issues.

John Upton has said he won't take advances, either.

Of course, there's a complexity involved in publishing when it comes to advances. A lot of freelance work--not just writing--requires downpayments on the work by the employer, or if you prefer, the contractor and the subcontractor. That's because, simply put, if a job is going to take X number of weeks or months, the subcontractor has bills to pay and needs money to live on while they're doing the work.

Book publishing is a little strange in that regard.

I don't know any details about David's shift from Warner to CDS, but it surprised the hell out of me.


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