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Changes to contracts

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HilaryH

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Hi! I'd appreciate opinions and advice on the following: my non-fiction publisher wants to make changes to my contracts as they want to cap royalty payments at 15% rather than have them rise after so many thousands have sold. I feel the 15% is above average and so am not completely opposed BUT they also want to reduce subsidiary payments from 50 to 90% to a mere 10%! The contracts for my two books are less than two years old. Obviously they can't make these changes unless I agree.

I'm inclined to say that I'm not adverse to the 15% capping but absolutely no to any other changes. Afterall, I wrote the books based on the original contracts.

Any advice? Many thanks!
 

Momento Mori

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Who's your publisher?

Why do they want to change their royalty terms?

What are the consequences if you don't agree to the amendments?

How much are you currently making in royalty payments on those books?

Did you get paid an advance on your book?

Personally, I don't see why you should agree to it. The current terms favour you and are there to see that you're remunerated for your work. The effect of changing them is to ensure that your publisher is remunerated for your work.

MM
 

HilaryH

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MM, the publisher is claiming that when the higher rates kick this causes them financial problems. Apparently all their 'new' authors now get offered a lower 10% from the start with no rise in rate at all.
My royalties are calculated on their net receipts (what's left after they've finished deducting absolutely everything else, including sales' reps fees!). It works out about 40 to 45pence per new book sold. Fairly standard?
I did get advances, yes.
I agree, the changes favour them not me.
 

HilaryH

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MM, apparently the higher royalty rates are causing them financial problems. My rates are calculated on their net receipts - works out at about 40-45p per new book sold. Yes, I was paid advances. I agree the new terms would favour them.

(Lost original reply so this thread might read a bit strange now!)
 

Momento Mori

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Well if they're only paying you royalties on net anyway, I don't understand why they're having financial problems - the calculation of net should leave enough profit for them and royalties for you.

It would be really interesting to know who this publisher is (although I understand if you're not comfortable in sharing).

Personally, I have to say that regardless of whether it's causing them problems I'd refuse to sign an amendment. The negotiated the terms of the contract when you first signed and they were the party with more commercial negotiating power. It's therefore up to them to get their sums right. It sounds to me that they're already screwing over their new authors, so I don't see why I should be made to join them.

Presumably when theiy financial problems are over, they're not undertaking to up your royalties back to their pre-change levels?

MM
 

Ryan_Sullivan

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This sounds like it falls under the category of "not my problem." It's okay to make mistakes in business--but when you sign a contract, you have to make good on it. You have no obligation to accept the changes. If they're having financial problems, they can change them in the future, but you shouldn't feel pressured to sign away what's promised to you.
 

HilaryH

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Thanks both of you. I'm thinking you're right.
 

Barbara R.

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How would your publisher react if you informed them that the original contract was not working for you and you'd like to double your royalty rate? Outrage? Concern for your mental health?

You might tell your publisher that you'd be happy to consider those altered terms for future projects but will stick to the terms of your contract for the work already published. BTW, there's a reason the royalty rate goes up as more books sell: the cost of production goes down. The company might be having problems generally, but I doubt royalties on book sales is the reason.
 

priceless1

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MM, apparently the higher royalty rates are causing them financial problems. My rates are calculated on their net receipts - works out at about 40-45p per new book sold. Yes, I was paid advances. I agree the new terms would favour them.
Your higher royalty rates are causing them financial problems? And how is this your problem? After all, this is something they agreed to. If you're selling well enough that your higher royalty rate has kicked in, then your publisher should be dancing a jig because they're bringing in money. However, it sounds like your publisher is having financial problems because they have more books that aren't selling and need to depend on the high selling books to keep them afloat.

From my perspective of the editor's chair, I don't see this as being your problem. You performed your duties and have a book that sells, so why is it your duty to sacrifice your earnings to keep their heads above water? It's not your responsibility to shoulder the burden of underperforming authors.

I see this negotiation as a red flag to bigger problems around the corner. And if that's the case, lowering your royalties won't help stem the tide. I'd dig a bit deeper into their solvency if I were you.
 
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victoriastrauss

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My royalties are calculated on their net receipts (what's left after they've finished deducting absolutely everything else, including sales' reps fees!). It works out about 40 to 45pence per new book sold. Fairly standard?

That's not standard at all. I've never heard of a reputable publisher that deducts sales reps' commissions. Anyway, if they're deducting so much from the amount on which royalties are calculated, royalties can't be very high to start with.

I agree that this seems like an ominous sign of possible problems to come.

What's the cover price of your book?

- Victoria
 

HilaryH

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I agree about the sales' reps' fees and argued with them about this when they suddenly introduced it. They have a 10% deduction called 'admin fee' which they deduct from their receipts and claim the sales' reps fees are part of that. I don't want to go into it here but we did eventually sort something over that. Even so I still feel they got away with it. I don't plan to let them get away with anything else.
The cover price is £8.99 - but wholesalers etc have a 50 - 60% discount.

Thanks for the opinions. It helps when others say what you're thinking!
 

Wonderlander

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I used to edit at an extremely reputable technical publisher, and frequently to get an author on board if we weren't sure how well they'd do, I'd offer a low initial royalty with increasing payments as the sales went up. If it doesn't work out, it's a shame, but if the book does well, we're all winners.

But it is possible to get to the point with an author where the high end royalty almost makes it not worth bothering for the publisher, particularly if the author is demanding (some of them would negotiate gross). The way round, of course, is that being technical books, they'd eventually need a new edition rather than a reprint, and the contract would be renegotiated then.

But we never renegotiated a contract while it was actually in force. That's just insanely cheeky. The only exception to that I can remember was e-book rights, which was just then appearing on radar.
 

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