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Important Aspects of Publishing Contracts

Important Aspects of Publishing Contracts

“I’ve signed with a publisher!”

If you’re an SPF regular then you’re probably more interested in self-publishing than making this much-celebrated announcement. That doesn’t necessarily mean, however, that you want to self-publish forever. After all, getting picked up is the dream, right? Less work, fewer complications and a guaranteed advance. Well, not in many cases. For a lot of authors, signing a contract actually makes their life more complicated. The small print turns their dream into a nightmare.

Clueless or desperate after countless rejections, thousands sign unfair publishing contacts every year. They hardly glance at the details, don’t negotiate and fail to question the language they don’t understand. They just sign. And as such, they give up more control, rights and royalties than are probably necessary. Not to mention, they stumble unwittingly into all manner of trip hazards that trigger long-lasting effects.

With no experience, you may believe that every contract requires a trade-off; that this is the reality of a traditional author career. However, that’s a dangerous assumption. Contrary to common belief, publisher contracts aren’t take-it-or-leave-it affairs, even if you’re an unknown writer. They’re first drafts of agreements that publishers fully expect to negotiate. As an author, taking an hour to read yours and question clauses that don’t look right to you could revolutionise your career agency and prospects.

You might believe an agent will do this for you, but that doesn’t always happen. Often, the best way to ensure you get a fair deal that leaves everyone happy is to educate yourself. Admittedly, this isn’t easy. Publishing contracts are convoluted and varied. Having said that, many do contain common pitfalls for authors. While this blog post isn’t official legal advice, it will explore a few important aspects of publishing contracts that crop up frequently to help you protect your interests and potentially save yourself years of stress.

Verbal Agreements

You may think both parties must read and sign a contract to make an agreement legally binding. The truth, though, is that it depends on the locations of everyone involved. In some countries, it’s legal to form a deal with a simple verbal agreement – a conversation. This is also true in some states in the US. Knowing this fact, you can imagine the trouble that some authors run into when talking to publishers. In the past, some have even inadvertently agreed to unfavourable terms over the phone because they weren’t aware that verbal agreements existed.

Admittedly, this is murky territory. Most reputable publishers don’t intentionally bamboozle authors out of their rights via phone call, but it’s possible even if verbal agreements aren’t legally binding where you live. As a result, aim to conduct contract negotiations over email whenever possible. Doing so will help you choose your words carefully and keep a quotable written record of all conversations as evidence of what has been discussed. If you take a call then realise your mistake, be sure to remedy your error by emailing a summary of what you said and meant right after the conversation. That way, you can protect yourself against potential verbal agreement claims.

Selling vs Licensing

The media loves to talk about “selling” book rights. It sounds glamourous. However, selling your intellectual property outright is typically a terrible idea unless it’s for a significant price. Books, like many other forms of IP, can earn you an income for the rest of your life plus 70 years so should be valued with that in mind. If you sell your rights in totality, the publisher that buys them can pull the plug at any time if their focus shifts to another author. They could stop advertising or even decide to unpublish the book altogether, and with it, ruin your earning potential. Keep your rights, however, and you or your estate can theoretically nurture that asset as an income stream for over a century.

Hence, many professional authors prefer not to “sell” but “license” their work. The language is important. By licensing your IP, you can keep control over the long term. That word marks the difference between selling your work outright and renting a portion of it to a publisher under strict conditions. How long the license lasts is up to you. So are the terms of the agreement. You could, for instance, license paperback and hardback rights to a publisher who can get you mainstream bookshop distribution while retaining your ebook rights to self-publish and maximise your royalties. If a publisher wants to give you seven figures to take your copyright, that’s fine, but in most cases licensing your work is a better option.

Your Advance

It’s easy to see your book advance as a simple sale price – the amount of money a publisher pays you for the right to publish your book – but a bigger advance doesn’t objectively signify a better deal. A $5,000 advance, for example, can be better than a $50,000 one, depending on the details. Yes, publishers tend to give a bigger marketing budget to the books they’ve licensed for a high price because they have more skin in the game, but that’s not always true.

Some publishers are conglomerates. You may think paying a $50,000 advance is big enough to pressure them into fighting your corner as a priority author, but that’s a tiny sum for huge companies – a punt they may not even back with a marketing plan. Knowing this, look at your advance not as an objective number, but as one of many tradable bargaining chips. Would you trade a $50,000 advance with no guaranteed marketing budget for $10,000 and a clause that commits your publisher to spend $100,000 on Facebook ads for your book? There is no right answer, only whatever answer works for you. Remember, your advance is important but not more so than the contract as a whole.

Options and Non-Competes

Allowing a publisher to option your next project means giving them first refusal. After agreeing to an option clause, you typically can’t offer that next book to another publisher or self-publish it without them first making an offer or rejecting it. This might sound innocuous – you can reject their offer if you don’t like it so why fret? – but option clauses can significantly delay your author career, particularly if the publisher takes months to look at your next book. Waiting, you can’t publish it without their green light, which means you potentially can’t make money. And non-compete clauses are even trickier. At their worst, they can prohibit you from publishing any book on the same pen name as the book you licenced – forever.

Options and non-complete clauses aren’t evil. They’re simply used to maintain control. Publishers use them to protect their interests. However, just as a publisher could use one to stop you self-publishing a competing title about a boy wizard in the same month that they’re pushing a boy-wizard book for you, you could also use one to stop them publishing another author’s almost identical story in the same month as your release. Depending on their terms, these clauses can clear the seas for your voyage or handcuff you to a sinking ship. As a result, take care to understand the implications of the ones you approve. If in doubt, it’s best to get them removed from the contract altogether.

Vague Sentences

Just because a contract doesn’t explicitly say that your publisher can’t claim a particular right, that doesn’t mean you’re safe. That’s why you need to insist on specific wording when negotiating a contract. Every vague term leaves the agreement more open to interpretation, which can cause headaches. To get a watertight deal that everyone fully understands, you need to ask questions like:

  • Can you specify which formats you want to publish rather than asking for “publishing rights”?
  • What languages and territories do you want to control?
  • How do you define a “nationwide paperback release” in terms of number of stocked retailers?
  • Who has the final say when signing off revisions?

Details are important because they specify exactly which rights you’re selling, under what terms, and which you can retain to exploit elsewhere. You can quote these passages if you or your publisher ever claim that there has been a breach of contract. Being specific means that everyone knows exactly what they can expect from the other party and what happens in the event of a disagreement. At the very least, you should specify how you can get out of your contract if the relationship doesn’t meet your expectations, and define exactly what counts as “out of print” regarding paperbacks in trade circulation and annual ebook sales figures.

Contracts aren’t scary once you learn to identify their potential pitfalls and protect yourself. Just remember that everything in them is negotiable. All clauses can be amended or removed. You will likely need to compromise in some way, but a fair deal is always possible. And if a publisher won’t budge on a phrase that could hamstring your long-term career potential, be prepared to walk away without a deal. In publishing, control is everything. Passing up an offer or delaying your traditional publishing plans might be painful in the short term but, if your work is good, there will always be another opportunity.

Daniel Parsons

Daniel Parsons

Dan Parsons is the bestselling author of multiple series. His Creative Business books for authors and other entrepreneurs contains several international bestsellers. Meanwhile, his fantasy and horror series, published under Daniel Parsons, have topped charts around the world and been used to promote a major Hollywood movie. For more information on writing, networking, and building your creative business, check out all of Dan’s non-fiction books here.