Is that publishing contract a piece of garbage?

June 24, 2016

One of the biggest mistakes young writers make is getting into a terrible contract they can never leave. I’ve dealt with this several times with books I want to publish. The creator sends me their original contract and THEY DON’T EVEN OWN THE RIGHTS.

That’s right. More than one person has sent me a contract in which they signed away the rights to their book for less than it cost them to make the book in the first place. It’s a brutal lesson, and I hate being the bearer of bad news, but I have to go back and tell them even they can’t do anything with the book because it’s not their property.

Imagine that. You have poured your blood, sweat, and tears into a book. You’ve paid for artists out of your own pocket. You’ve stayed up late nights toiling away to get the pages right. You were so excited to finally be able to get the book out there…and in doing so signed away the rights to the publishing company.

That’s bad enough, but what then happens if that publisher sells their catalog to a company that sells their catalog to a company that sells their catalog to a conglomerate that sits on the books forever. This isn’t a fictitious tale. This actually happened to somebody I know.

I would much rather have you self-publish your book and reap all the profits. However, since many of you want a publisher the least I can do is give you some tips on what to look for in contract.

1. Net profits means you will never make any money

There is a big difference between gross receipts and net profits. Net profits means the remainder left after the publisher has taken out all expenses. The publisher gets to recoup their printing costs, marketing costs, distribution costs, editing costs, and just about any cost imaginable before you see any money. This is the reason why producers sue movie studios because they show Avatar is 130 million in the red even though it’s one of the highest grossing movies of all time.

Net profits is a bad deal for creators. If you must take a net profit deal, make sure it is accompanied by an upfront payment equal to or greater than the cost it took to make the book, because otherwise you will never see a dime.

Gross receipts, which is what Wannabe Press and most traditional book publishers gives, is what you want. Gross receipts come off the top of the amount made. If you have 10% of gross receipts for a book that sells for $10.00, you make $1 every book sale no questions asked. Gross receipts look less appealing on paper (usually net profits is 50% or more compared to 5–10% of gross), but over time gross receipts will make you way more money than net profits.

2. Make sure YOU own the rights to your book

Many publishers will put something like this in a contract. “Publisher and Creator will split profits 50/50 with Publisher owning 100% of the Project and paying Creator 50% of profits”. This doesn’t seem so bad on the surface. I mean you get 50% of the money still, right?

Wrong.

In this scenario the publisher owns the book. That mean they can sell the book to other companies and make changes to the book without your permission. It also means you cannot negotiate any ancillary or other deals with your book because it’s not your book. You don’t own it.

Instead, you want to make sure the project is owned at least 50/50 by you. Ideal, you will give the publisher certain rights, and you will keep rights to the underlying source material. That way the publisher can’t make changes without your permission, and the rights lie with you.

3. Make sure there is a reversion of rights clause in your contract

So often people sign deals that give publishers the right to their works in perpetuity, even if it’s out of print. There is no problem with a good publisher continuing to publish a book if it’s in print, but you want to make sure that there is language in your contract that gets you the rights back after a certain period of time, if you want it, or if the book is ever out of print.

4. Define what you can do with your work.

In our contracts, I very clearly define that a creator can create exclusive prints and other materials as long as they are in limited quantities and they do not engage a distributor. The only thing the contract forbids is making and reproduction of the work.

This give the creator the ability to at least make money doing exclusives at their table. However, most contracts forbid this entirely, or don’t define it. You will be making money tabling at shows and in person. You want to make sure that falls within the purview of the contract.

5. Make sure you have approval over any licensing deals

At the end of the day, your name is on your work, so you want to make sure you can approve the licensing deals your publisher negotiates, and that you get a piece of the licensing commensurate with your part in the process. You created the work, so you should get a large portion of the licensing monies.

6. Give yourself the ability to audit the publisher’s books.

Quarterly audits are a general rule in business when you make a deal. When you sign away your book, this is a business deal. You cannot expect the publisher to be honest with you about sales, and even if they are you have the right to make sure they are paying you fairly.

7. Define a payment schedule with penalty should you not be paid on time.

If you don’t define a payment schedule, then there will be nothing legally actionable on your part should the publisher not pay you. However, more importantly is the put a penalty to the publisher should they not pay on time. Publishers know you will most likely not take them to court. However, if they see the money piling up they will be more likely to pay you.

Contracts don’t have to be scary. You don’t have to be scared of them. I so often see artists that sign contracts without reading them, and then complain that the contract is unfair. Of course the contract is unfair. The publisher is out for their best interests. You have to be out for your best interests.

If a publisher is not willing to work with you on these points, then you shouldn’t do business with them. I’m not saying you will get any or all of the points I mentioned, but you should certainly ask for them and get clarification before you sign anything.

A contract is a negotiation. If they are not willing to negotiate, then move on.

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3 comments on “Is that publishing contract a piece of garbage?

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