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type3secretion
11-06-2011, 06:23 PM
I just received word from my agent that a publisher has made an offer. I'm an unpublished author, very green, not knowing much about contracts etc. I've done some initial reading, but I wanted to get any feedback writers here would like to offer on the initial offer. There have been no negotiations yet (found out yesterday, agent found out late Friday).

Background: International thriller, ~100,000 words, author never published, Company making offer has published (under various imprints) ~2,500 books (1,600 in print) with about 100 books per year.

My information on the first offer:

$6,500 advance for World, ebook, and audio rights (paid in 3 installments: one half within 30 days of signing, one quarter within 30 days of delivery, and the remaining one quarter within 30 days following publication)

Trade paperback (their preferred format, although they do have the option for HC in the contract), the royalty split is as follows:
6% of net cash receipts on 1-7,500 copies
7.5% of net cash receipts on 7,501 – 20,000 copies
9% of net cash receipts on all copies thereafter
For ebook: 25% of net cash receipts for all copies sold
For audio: 10% of net cash receipts for all copies sold, or 50% of net monies received from licensing.

Based on the the stuff I'm reading online, including at Absolutewrite, the %'s look low, and, even more significantly, they are of net cash receipts, not cover price. Since net cash can be a very amorphous number, subject to many variables, it is, from what I've read, tricky to gauge and usually delivering much less than one would hope.

The advance seemed "fine" for the book and my unpublished status. And since I have a day job, I'm not hurting for cash, so I thought the negotiating capital should be spent on the royalties.

I wanted to ask whether my assessment is correct, and, in people's experience (not wishes! looking for real experience here), what kind of numbers might I push for?

My agent said that in his experience, those companies offering net cash royalties don't budge on that (i.e., they won't go to cover price), but we can fight for better percentages.

Thanks for any advice. :)

Drachen Jager
11-06-2011, 08:32 PM
Check the publisher on P&E, private message Victoria Strauss (she runs the blog Writer Beware) and make sure your ass is covered. I would check up on the agent while you're at it.

Yeah, those numbers look pretty bad. Even for cover price they're low. You should never deal in net because those numbers can be easily manipulated by the publisher if they want to cheat you.

type3secretion
11-06-2011, 09:19 PM
Publisher is legit, fairly well regarded, been around since the 1960's, with nothing bad on P&E. Agent is also fairly well respected from what I have gathered and read. I have this feeling that a combination of the rough economy and publishing trends (all bad) and my new author status is what is at work here. But I want to try and do the best I can. At the least set a lower limit on what I can get per sale or something.

Siri Kirpal
11-06-2011, 10:15 PM
Sat Nam! (literally "Truth Name"--a Sikh greeting)

One tiny item you might get burned on: check to see if you get royalties on books you purchase, if you're planning on buying any.

Blessings,

Siri Kirpal

Old Hack
11-07-2011, 11:26 AM
Those royalties look very low to me. If this is a reputable, established publisher and you have a good agent, I'd expect them to be higher, and calculated on cover price, not net.

Your agent should be advising you on all of this, though. It's what you pay him that 15% for.

type3secretion
11-07-2011, 04:27 PM
Hi Old Hack - thanks. Definitely want to hear all I can about this. It's certainly true that the publisher and agent have good reps. But that doesn't mean it's still not a lowish offer, for a number of reasons. Love to hear more from people!

Drachen Jager
11-07-2011, 09:15 PM
http://accrispin.blogspot.com/2011/05/contract-red-flag-net-profit-royalties.html

Give that a read type3.

Basically, you'll never see a dime past your $5,525 advance.

type3secretion
11-08-2011, 02:13 AM
Hi Drachen,

I read the link you sent. I think my take wasn't so "professionally cynical" (as per your handle!).

I wasn't sure about your claim to no money, unless, of course, you are assuming I will sell less than 10K books (which, perhaps, is a good assumption!). Here are my quick calculations:

Assuming like the website you linked does in its examples, a $20 list, $10 net receipts:
7500 books => $4500 (nothing yet for me)
at 7.5% up to 20K sold, to make my $6500 advance break even point, I need to sell 2667 books, so roughly 10,000 books to start collecting money.


Regarding the "net receipts", I copy this part from that link:

"Royalties paid on net income aren't as desirable as royalties paid on list price--obviously--but they are common in the small press world, and don't necessarily ring warning bells. However, you do need to carefully parse the contract language, and understand what you're signing."

It's definitely a smaller house. So this seems to fit, and the devil is in the details, as for most things.

I brought this all up with my agent, and she will definitely try to get better percentages, but she noted that, in her experience, publishers that work "net cash" don't budge on that. She also noted that many don't realize that the percentages on list price from bigger houses have a lot of fine print and caveats. For example, they will pay those percentages if the book is sold through "standard trade channels", and when they are not, all bets (or percentages) are off, which means they go lower, and they also go to net cash. An example would be a special Walmart edition (she said Walmart has HUGE influence on publishers). Also, there are often clauses that if the book sells for less than 50% of the cover, the royalty will be cut and it goes to net cash, etc. She mentioned Penguin as an example of having at times very Byzantine formulas for calculating royalties. She questioned whether all authors were aware of a lot of these little caveats.

Of course, not having seen in hand verified contracts, it's hard for me to judge. But the quote I pasted above I've read elsewhere the last few days, essentially that net receipts are not that uncommon, and the norm for smaller publishers, calms me some. Also that no matter who you get your contract from, the devil is in the details and the possible conditions that change the royalty.

My agent wants to raise the %, and will try to focus on that for the negotiation. Hopefully I'm not getting taken advantage of here, but as far as I can tell, I'm not (terribly, anyway). And, basically, without other offers, I don't have too much leverage to negotiate anyway! :Shrug:

KingM
11-08-2011, 02:18 AM
It's okay to have this conversation with your agent. She won't mind having a discussion about the terms and where you'd like to try to negotiate and where you're better off taking what is offered.

type3secretion
11-08-2011, 02:34 AM
It's okay to have this conversation with your agent. She won't mind having a discussion about the terms and where you'd like to try to negotiate and where you're better off taking what is offered.

Hi KingM, definitely talking to her about this. They were clearly trying to maximize negotiating capital, and it was their thought that it should be spent at the royalty percentages. I assume that their standing to profit means they will indeed do their best! Hoping their best is good.

type3secretion
11-09-2011, 01:05 AM
Well, my agent got some movement, from

6% of net cash receipts on 1-7,500 copies
7.5% of net cash receipts on 7,501 – 20,000 copies
9% of net cash receipts on all copies thereafter

to

7% of net cash receipts on <=5000 copies
9% of net cash receipts on 5K-10K copies
11% of net cash receipts on all copies thereafter

Better, and I said "ok". So, now the contract back and forth. But the ball is rolling.

LaneHeymont
11-09-2011, 04:11 AM
Well, my agent got some movement, from

6% of net cash receipts on 1-7,500 copies
7.5% of net cash receipts on 7,501 – 20,000 copies
9% of net cash receipts on all copies thereafter

to

7% of net cash receipts on <=5000 copies
9% of net cash receipts on 5K-10K copies
11% of net cash receipts on all copies thereafter

Better, and I said "ok". So, now the contract back and forth. But the ball is rolling.

Yay! Congrats! Let us know when it's out!

ReflectiveAcuity
11-13-2011, 07:22 PM
Well, my agent got some movement, from

6% of net cash receipts on 1-7,500 copies
7.5% of net cash receipts on 7,501 – 20,000 copies
9% of net cash receipts on all copies thereafter

to

7% of net cash receipts on <=5000 copies
9% of net cash receipts on 5K-10K copies
11% of net cash receipts on all copies thereafter

Better, and I said "ok". So, now the contract back and forth. But the ball is rolling.

Hi Type3, and what if the publisher negotiates a movie deal from your book…later on in life? Is that ever discussed or factored in at all during the initial stages of the publishing deal? Would you be entitled to anything if a film occurs? Just curious.

Cyia
11-13-2011, 07:57 PM
Hi Type3, and what if the publisher negotiates a movie deal from your book…later on in life? Is that ever discussed or factored in at all during the initial stages of the publishing deal? Would you be entitled to anything if a film occurs? Just curious.


The publisher doesn't negotiate that. Your agent (usually in conjunction with a sub-agent) does.

Old Hack
11-13-2011, 08:22 PM
Hi Type3, and what if the publisher negotiates a movie deal from your book…later on in life? Is that ever discussed or factored in at all during the initial stages of the publishing deal? Would you be entitled to anything if a film occurs? Just curious.

Publishers usually buy only publishing rights, not film rights. Film rights are handled separately, usually by the author's agent, as already mentioned.

If the publisher buys all rights, then the author gets diddly if film rights are subsequently exploited.