Thursday, June 21, 2007

Negotiating Contracts

Let's talk about negotiating contracts.

As authors, we're so damn needy we usually accept whatever we're offered. We're afraid that if we don't take the offer, we won't get published.

Publishers know this. And they use this to their advantage. It is in their best interest to offer low advances and try to acquire as many sub rights as possible.

One one hand, if your book does well, the advance doesn't matter much---royalties will kick in, and you'll get quarterly checks.

On the other hand, a healthy advance lets you spend more time and money self-promoting, which can only help your sells. A healthy advance also shows that your publisher is confident in your books, and will spend a sizable amount on marketing them.

A wonderful book was recommended to me, called The Secrets of Power Negotiating by Roger Dawson. It demystifies a lot about negotiation, and tells you how to respond when your publisher lowballs you, pulls offers off the table, and basically tries to show you that they don't need you.

Truth told, your publisher doesn't need you. But you don't really need them either.

When you're negotiating a contract, your agent should be doing most of the work. But there are some things you should know before you enter negotiations.

1. How much you want per book.
2. What rights you're offering.
3. What your previous sales figures are.
4. What your sell-through is, and how many printings you've had.
5. What will make you walk away from the negotiating table.
6. How you will react to every point and counterpoint your publisher brings up.

The last one is especially important. You should always have an answer for anything your publisher throws at you. This means brainstorming, practicing, and role-playing.

By role-playing, I mean talking out things with a trusted friend playing the part of your publisher, so you're prepared if these things come up in negotiations.

What are you going to say when your publisher tells you:

"Your first book(s) didn't do as well as expected."

"That's as high as we can go."

"If you don't accept now we're pulling this offer from the table."

"The market for your genre is collapsing."

"We're the best publisher for your book, and we love you here."

"We can't offer more money in the advance, but we can offer X in bonuses for copies shipped, hitting the NYT list, copies sold, etc."

Be prepared to counter these statements using a combination of facts and logic. Passion is fine when negotiating. Anger is not.

If you want to be in a position of power while negotiating, you need to:

1. Be in control of your emotions.
2. Be knowledgeable about your numbers.
3. Be confident, but not cocky.
4. Be polite, but firm.
5. Be prepared for every possible thing that may come up.
6. Be willing to walk away.

Your agent should already know all of this. But you should discuss this with her anyway.

It may seem obvious, but it's easier to sell a finished book than a proposal. Just because your contract is finished doesn't mean you need another one immediately. It is almost always better for you to finish your next book and shop it around rather than accept your current publisher's low offer on a proposal.

Negotiation is a dance. Try to lead, rather than follow. And if you don't like your dance partner, find another one.


Jude Hardin said...

What about someone like me, waiting for his first offer? Should I take whatever I can get (from a reputable publisher, of course), just to get my foot in the door? Or should I still be willing to walk away if the offer is for a low, or even no, advance?

Judy Merrill Larsen said...

Jude, This is what your agent can/should help you with--and why it's so important for you to trust your agent. This is an ongoing discussion you should be having with him/her.

Jude Hardin said...
This comment has been removed by the author.
Jude Hardin said...

Thanks, Judy. I do trust him. I know he'll negotiate the best deal possible.

Actually, my questions were somewhat rhetorical. If--despite our best efforts--the biggies in NY take a pass, I would still like for the book to be published. Some of the small-but-respected houses (Poisoned Pen, for example) don't have the resources to give big advances, but I think a deal with no advance is preferable to no deal at all.

Just wondering if most authors (published or aspiring) agree with this.

Mark Terry said...

I particularly agree with two things you said (actually, I agree with everything you said, and I've been in both camps, having negotiated contracts myself and had my agent negotiate contracts--having the agent is definitely preferable).

1. If you're not willing to walk away (and you may not be) then you're in a terribly weak position from a negotiation point of view.

2. Just because your contract is finished doesn't mean you need another one immediately.

If possible. Sometimes it's good to assure you have a book coming out every year, but if you can get ahead of the publication schedule, it can free you up to consider other projects and publication outlets and that can give you a nice upper hand in negotiations as well as a breather from a creative point of view.

Joshua James said...

Yeah, Joe . . . can we have a followup on negotiating a contract for a first novel?

I know the agent / rep handles this, but it's good to know what we should know so that we can, well, know if the agent / rep is doing their job rightly . . .

JA Konrath said...


Numbers follow you.

Everyone in publishing is looking for two types of atuhors, the proven bestseller and the sexy unproven newbie.

The sexy unproven newbie can get a lot of money and a big marketing push, if he writes the right book.

If you go with a smaller press, you're no longer new or unproven. Bookscan coldly reports that your first novel sold 1245 copies.

How likely is it that one of the big publishers will pick you up for book #2 after seeing those numbers?

best to hold out, and lose your virginity with someone whom you love.

My two cents.

PJ Parrish said...

For some odd reason, this is something authors rarely talk about among themselves. It's part and parcel of that old money thing, I guess. Makes us nervous.

But, in my experience, there are definitely some points you need to watch for in the negotiation process, whether you are first timer or vet. And, contrary to popular belief, ANYthing can be changed in the standard boilerplate contract:

1. Option clause. Pub can tie up your next book indefinitely. Get a reasonable reaction time for them to yea or nay.

2. Cross-collateral accounting.(ie basket accounting for all books in a contract vs each book "paying" for itself on making up advances). Joe and I disagree on this point. But my agent has never allowed this. Each book stands on its own, I say. But early in career, you might not get this.

3. Final title of work may be changed only by mutal agreement of author and pub. (you might not get this but can't hurt to ask. Ditto cover CONSULTATION. ie they will show it to you. Few authors get approval.).

4. Publisher bankruptcy. You should be able to get your book's rights back after a reasonable time.

5. If you write a series, make sure you retain rights to the character's name. Ditto a pen name for yourself. I've known authors who were unpleasantly surprised to find out their lost their pen name after a publisher change.

6. Foreign rights. Two schools of thought on this one, whether you and your agent retain these and sell them or you allow your pub to. Ditto electronic rights. But talk about it with agent ahead of time.

For Jude and other first-timers: In the beginning of your career, before you establish a track record, you are generally going to have to go with a standard boilerplate contract. Later, if your growth is upward, you can bargain from stronger positions. But I think Joe is right on his basic idea that you have to come to the table prepared and calm, having discussed evertything with your agent ahead of time. Don't just leave it all up to your agent either. She works for you but that does not give you the right to concede your responsibility and be lazy. You need to tell your agent what you hope to get out of the process. Then together you fashion your strategy.

Good luck!

Jim said...

The standard big-publisher contract for authors is a highly defined document that has been carefully developed and refined over time by the publisher’s attorneys. Although “money” is the big blank line that authors understand and may feel the need to beat their chests about, the contract will in fact address a large number of highly relevant issues beyond that simple one. Many of these will be written in very tight legalese that will be vague if not incomprehensible to most lay persons.

As an author, I would want to carefully read any proposed contract line by line and word by word so that I understand the issues that are being addressed and how they are being resolved. I would ask my agent what things mean, but would also remember that my agent is probably not an attorney and may not be qualified to tell me what the contract means or how it affects my legal rights, even though he/she might think they know.

If it got to the point where I thought that the contract was in an acceptable form, as an author I would seriously consider having it reviewed by an attorney who is experienced in that area of practice before signing it. Some of the draft clauses may only be a sentence or two and may seem inconsequential, when in fact they may be extremely important to something in the future that I as the author do not have the knowledge, foresight or experience to even think about yet. Attorneys can help flag these types of clauses and issues.

Nothing in this comment is intended to be legal advice or should be construed as legal advice. Consult your attorney if you have questions on legal matters.

Terrie Farley Moran said...

The information in this post and the comments has great value to those of us at the beginning of the find an agent/find an editor process. Thanks to all, and Jude, I hope that first offer is a humdinger. Terrie

Jude Hardin said...

Thanks for the advice, Joe and Kris. Very interesting and useful information here.

And thanks, Terrie. A humdinger deal would be great!

Rob Flumignan said...
This comment has been removed by the author.
Rob Flumignan said...

Joe said: "How likely is it that one of the big publishers will pick you up for book #2 after seeing those numbers?

best to hold out, and lose your virginity with someone whom you love."

The next questions then: What sort of deal should a first-timer hold out for? Six-figures? Two-book? Three-book? How do you know if it's true love when you're just desperate to get laid?

Jude Hardin said...

I read somewhere that the vast majority of first-timers get advances ranging from $0 to $40,000, with $6000 being the median. Factored in are small presses, though, that give little or no advances on royalties.

So, if you hold out for a deal from one of the big NY houses, six figures for a three-book deal isn't an unreal expectation.

I think what Joe was getting at--and I agree--is that you need some numbers to build a career on. There's a big difference between wanting to write for a living and simply wanting to see your name in print. Nobody should be so desperate to get published that they give it up for free, IMHO.

Having something to build on is the key, I think. It's better to consider where you want to be as a writer in ten years rather than just thinking about one or two books.

Anonymous said...

Joe, why don't you write a book called NEGOTIATING CONTRACTS? It would be a NYT Top 10 certainty. Well, I'd buy it anyway...