Last week, in our continuing “Writing Your Book” series, we found ourselves an agent and, at long last, received a viable offer for our book. Yay, us! This week we are going to take a closer look at book contracts and what they do and don’t say by breaking down a typical contract section by section. I have to admit that I find myself somewhat disturbed by the fact that we’re doing this in installment 13 of the series (and that the contract I’ll be breaking down is for the Thieftaker series), but there’s little to be done about it. Fates be damned; full speed ahead!
Book contracts, while not huge, are fairly significant pieces of legalese, typically running in the neighborhood of fifteen pages or so. Most of the time, particularly for new writers, agents and publishers work off what is called a boilerplate contract. A boilerplate is a standard contract worked out ahead of time by agencies and publishers and then applied with minimal changes to each new author. Last week we went with Big Name Agency (BNA) in New York, and our agent received an offer for our book from Fantasy Book Enterprises (FBE). Chances are that BNA has a boilerplate contract for all deals with FBE, just as it does for deals with Tor, Roc, Baen, etc. And FBE has a different boilerplate for each agency it deals with. Lots of boilerplates, lots of negotiations before authors even get involved. And then, once your agent starts working on a deal for you with one of these publishers, the boilerplate is personalized for your needs, which, of course, involves even more negotiation.
Page 1 of the contract begins by specifying who are the parties to the contract: “Agreement made as of September 20, 2010 between [author’s name] care of Big Name Agency, 1000 Gold Street, New York, NY 10000 (the ‘author’) and Fantasy Book Enterprises, 2000 Platinum Street, New York, NY 10001 (the ‘publisher’).” That, with obvious changes, is just how my contract begins. It then goes on to state that we’re granting rights for our book or books, specified here with a working title, to the publisher for a specified geographical region. Sometimes we grant North American rights, sometimes we grant all English rights, sometimes we grant worldwide rights. If we narrow the grant of rights to just North America, then we have a smaller distribution of our novel, but, on the other hand, we have greater opportunity to sell subsidiary rights for our book to other publishers in, say, the U.K. and Australia, not to mention translation rights in non-English-speaking countries. Most contracts will also specify on that first page that the copyright belongs to the author but that the publisher will register the copyright. That’s pretty standard.
The real fun begins with clause 3: “Delivery of Manuscript.” This is where you get into your deadlines and word count limits. For the sake of our example, let’s say that the book is supposed to be 100,000 words long and turned in on April 1, 2011. (No foolin’.) The contract will then tell us that if we miss that deadline by more than 60 days, the publisher has the right to terminate the contract and demand repayment of any monies paid to us. Scary stuff. It’s almost never enforced. Seriously, most publishers worth their salt with give you the extra time you need, and most editors will work with you to help you complete the novel. This is not to say that termination of contracts never happens, but it remains rare in our business. Still, I go out of my way to make every deadline, because missing deadlines will usually result in publication dates being pushed back, which I hate.
The next few contract clauses provide for editing and copyediting of the manuscript — in essence they say that the publisher can edit with our approval and feedback, that we will read and correct the copyedited manuscript, and that we will read typeset proofs of the book, while trying to minimize changes to the final typeset version. (In fact, there is a provision that says that if we change more than 10% of the typeset proofs, we can be charged for the extra expense. So make sure you get your edits right in the revisions and copyediting stages.) There is also a clause in which we promise that the work is original, that we didn’t steal anything from anyone else.
Clause 7 — Advance: This is where we talk money. Per the agreement we talked about in last week’s post, this is where the contract specifies that we get an advance of $7,500 with $2,500 paid when we sign the contract, $2,500 on delivery and acceptance of the manuscript, and $2,500 on publication of the first edition of the book. This is also where publishers are now including one of the more pernicious provisions of contracts. When you sell a series of books, the payout of the royalties can be accounted separately for each book, or jointly for all of them. What does this mean? For now let’s say that we’re contracting two books, each with advances of $7,500. With separate accounting, as soon as the first book earns out its $7500 advance in royalties, we start to see money. And then when the second book earns out its $7500, we see money for that book. With joint accounting, when the first book earns out, additional payments go toward paying off the advance for book 2. We don’t see any additional money until we’ve earned out the entire $15,000 paid out for both books. It’s clear why publishers would want to do things this way; it’s also clear why it sucks for authors. This is a buyer’s market, and these days more and more publishers are getting joint accounting provisions placed in contracts.
Clause 8 — Schedule of Royalties: More money talk. This is where payout rates are set for each edition of the book. For mass market paperbacks it’s often 6% of cover price for the first 100,000 copies, then 8% for all copies sold after that. Hardcover is usually 10% of cover price for the first 5,000 copies, 12.5% for the next 5,000, and 15% for all copies after that. Trade paper is often set at 6% of the first 25,000 copies, 7% on the rest. Electronic rights often mirror the hardcover rates. But I should mention here that royalty rates can be a great place to negotiate for better terms. My Thieftaker contract is more favorable to me than the boilerplate in nearly all of these categories. We couldn’t get Tor to budge on the advance or the joint accounting, but we got some concessions here. Something to keep in mind.
After this we get into Subsidiary rights, which is very complicated and will take too much space to explain at length. What you need to know is this: If a novel does well, authors and publishers can make additional money selling foreign language rights, movie rights, gaming rights, cartoon and novelty rights, audio rights, and more. The contract specifies who holds each set of rights (for instance, Lucienne and I always keep the movie rights to my books, so that if someone wants to make a movie out of one of them, we get all the money), and, for those rights held by the publisher, how big our share of any sale might be.
The rest of the contract deals with reports and payments (how often we get to see royalty statements and checks); how many author copies (read free copies) of our book we get (usually 10 to 20); and other technical details of that sort. The most important of these last clauses is usually the Option clause, which says that when this contract is over and we’re trying to sell our next book, the publisher gets first crack at it. Sometimes the option clause can be so broad as to specify that the publisher gets first right of refusal on any subsequent work of fiction. Or it can be restricted to “next work of fantasy” or even “next work in the series.” On the one hand, the option is nice in that it means that a publisher will definitely look at our next project. On the other hand, even if we wind up not being happy with this publisher, we have to give them a chance to bid on the next book we write.
This is a lot to process, and yet there is still more to most contracts. Much of it is legalese, some of it is more significant. (Some contracts have provisions for advance bonuses if our book reaches the NYT Bestseller list, and stuff like that.) But let’s stop there and talk about this. What questions do you have? Anything here surprise you? Anything strike you as better or worse than you expected?David B. Coe