Reflections on negotiating a contract 4: Royalties

Reposted from the TAAOnline Blog

My previous posts have been concerned with the large number of different issues in my contract as well as the general question of what ability I had to negotiate/renegotiate with my publisher who has a ton of leverage compared to me, a relative unknown. This post follows that basic theme, but looks specifically at the question of royalties.

One of the first things I’ll mention is the variety of different royalty clauses. To start, there were the basic book formats: hardback, paperback, and e-book. Following these were another dozen or so clauses, split into “rights and royalties” and “subsidiary rights and royalties,” which included things like international rights, audio and video rights, book club uses, use of excerpts and more. The list of different clauses was so long that I felt overwhelmed and did not research industry standards compared to the rates they were offering for the rest of these (perhaps a naive move—it was definitely not doing due diligence). I mostly focused on the three familiar formats—hardback, paperback, and e-book—even though it’s certainly possible that some other rights would have been worth the effort of negotiation—partial use of the work in course materials might be an area that matters to a book like mine. (Here’s hoping my book is successful enough for these other rights to amount to anything, even if I didn’t negotiate these clauses well!).

The first, obvious point of comparison for this contract was my previous Routledge contract from 2009, which, for the most part offered the same numbers. There were reductions to the hardback and paperback royalties and the rest was all the same. I interpret the reductions as a product of both my negotiating power (or lack thereof, as compared with the leverage held by the first author of my previous Routledge book, who was well known and a full professor), and as a reflection of the general health of the publishing industry. The reductions motived me to try to gather more information on the current state of publishing contracts (including watching the recent TAA on demand presentation “Anatomy of a Textbook Contract,”).

My next step was to ask a few people—two authors with recent publication experience and a publisher—about their knowledge with respect to royalties, at least with respect to the three basic ones (hardback, paperback, e-book; I didn’t ask for the complete detail of all the different types of rights and royalties).
First, I heard back from the publisher, who runs a small imprint that is subsidiary to a larger university press. The publisher suggested that I was getting lower rates on the e-book than industry standard (I was getting the same royalty rate for e-books I had received on my earlier contract). Because of that suggestion, I asked my editor about the e-book rates, and she responded that what I had was the standard Routledge contract, and they wouldn’t change that clause.

Next I heard back from the author of a scholarly book whom I had helped with his book proposal. Like me, this author has little prestige or leverage. He has the advantage of a university teaching position, and the disadvantage of writing a scholarly book with a very specific audience that would likely sell fewer copies than my more general textbook even if it did well for a book in its class. This author had submitted his book proposal at the same time as I had submitted mine, and he was offered a contract about one week before I was. His response to my query stunned me: he had been offered a flat fee for his book, no royalty percentages at all! And given the size of the flat fee, I felt a touch of anger for him. He told me that he was happy just to have received a contract and what was most important for him was getting published and the book helping his chance of moving into a tenure-track position, so I tried not to let it bother me. It certainly provided context that gave me greater appreciation for the offer I had received! If my book doesn’t sell, he’ll end up doing better than I, but if my book can sell more than about 500 copies, I’ll do better. (I haven’t explicitly asked my editor how many sales Routledge would consider a success, but one indication of Routledge’s expectations might be found in my contract’s paperback clause, which offered one rate for the first 2,000 copies and a higher rate for copies after that. If they’re willing to offer more after selling 2k copies, that’s a sign of their relative satisfaction with its performance.)

After exchanging e-mails with me, this author queried his editor/publisher, and he was told that his book would not be published individually, but rather would be published only as part of a larger electronic portfolio that his publisher sold as a package and that for this reason, they did not offer individual royalties. To what extent this is now an industry standard for specialized scholarly books, I don’t know, but it is somewhat disheartening, I think. I would certainly rather gamble that my book will sell a reasonable number of copies than settle for the flat fee that my acquaintance received.

Last, I heard from the third author, who will be publishing with Harvard University Press (American Sutraby Duncan Ryūken Williams, for which I provided some editing and the index), and who suggested that I ask for a higher rate on the hardback after reaching a certain number of sales. My paperback royalty clause already had such a limit: X% for the first 2,000 copies, and X+2% for all additional copies.  I asked my editor for a similar clause in my hardback royalties, and she responded that it was basically pointless, as they expected hardback sales to be, “very minimal – probably less than 100 copies.”
Although she did reject my request for a change in the hardback royalty, my editor and the publisher offered an improvement in the paperback royalty clause: they reduced the number of paperback copies I have to sell to get the improved rate from 2,000 to 1,000, meaning I’ll get an extra 2% on 1,000 copies (provided those copies sell). How much that change was motivated solely by my asking, and how much by my offering to make an accommodation by accepting the clause giving Routledge right of first refusal (which I mentioned in a previous post), I’m not sure, but I feel more empowered to ask, next time, even if I think I have little leverage.

To conclude this series of posts of my novice reflections, the process of reading, understanding, and negotiating my contract was moderately difficult, included lots and lots of details, and as far as I can tell, I got a basic industry standard contract. Even though I didn’t feel like I was in a very strong negotiating position, I went through the contract carefully, asked lots of questions (which my editor seemed happy to answer), and I think got some adjustments to the contract in my favor as a result. But, as I have said, I’m something of a novice at this, so my reflections may seem naive to those with more publication experience.

Reflections on negotiating a contract 2: Myriad details

This is reposted from the TAAOnline Blog

In this, the second of my posts on the contract and negotiation process, I consider the wide variety of issues that came up as I read my contract. Not being a lawyer, contracts always seem long and intimidating to me.

As I said in my previous post, my contract was some 13 pages long, and like most legal documents, very detailed. It was not something I would like to handle from a place of ignorance, but it was also not something that I thought required hiring a lawyer to help me. Some research was needed. Because I can get overwhelmed with too much information, I didn’t scour the Internet for all possible information about the variety of industry-standard book contracts for a textbook. I did watch one TAA on demand presentation about contracts: “Anatomy of a Textbook Contract,”which was very helpful in covering many of the general issues that my contract covered.  I also had my previous contract with Routledge from 2009 as a point of comparison, which was quite similar to my new contract in most of the details.

In this post, I’m going to touch on a sort of grab-bag of different clauses to give a sense of the detail involved in a contract. Perhaps all of us should have seen enough contracts, generally speaking—terms of service on websites, for example—to know that contracts are never simple. Logically, speaking, I was aware that contracts are detailed, and that Routledge’s contracts were surely overseen by lawyers, and therefore, complicated, like all contracts—for that matter, I had already signed a contract with Routledge. But still, the detail was a bit overwhelming.

Many clauses state basic details that obviously need to be stated, but such obvious things can get taken for granted. The contract naturally states who is going to sign it, along with relevant addresses for communication. The contract also includes information about the book that is under consideration—its title, content, length, scope and such. There is a clause that states when I have to deliver the book to them, and the format in which I must deliver it. There are clauses stating Routledge’s responsibilities in the process, too. The list of my responsibilities was long.

Some of the basic clauses were the outdated remnants of the era of print manuscripts that were hard to duplicate and easy to lose or damage. For example, the clause concerning my submitting the manuscript stated “the author shall retain a duplicate of the work,” and a later clause about publisher’s responsibility stated, “the Publisher is not responsible for loss or damage to the work while it is in their possession.” These are certainly wise contractual precautions in an era of typescripts—physical copies that can be destroyed—but it’s not significant in an era where the submission is in electronic form and duplication is easy. I commented on these to the editor, but neither she nor I were significantly motivated to change the boilerplate language—they certainly don’t seem to be likely to be at issue.

The clause concerning the copyright had six subsections. The first stated that I retain the copyright, then some stated Routledge’s rights and responsibilities with respect to use of the work. A couple were regarding a point of UK/EU law—about the “moral right” to assert ownership of the work, which I don’t really understand, beyond recognizing that such clauses are negotiating the difficult logical/legal terrain of intellectual property. One final copyright clause limited my ability to re-use the work.

After the copyright, there were clauses that stated my claim to be author of the work, and indemnified Routledge from damages due to problems in the text. For example, the contract assigns me responsibility that the book is not libelous or obscene or unlawful, and that it does not negligently suggest actions that will lead to harm.

There were several clauses related to royalty accounting, and to my rights to inspect their accounts. I didn’t investigate these closely—I read them, but realistically, I can’t imagine using those clauses. I’m just going to take it for granted that Routledge is going to be honest until I’m faced with strong evidence suggesting otherwise. And, in that unpleasant eventuality, I will hope that the contract will provide sufficient protection for my interests.

One interesting clause was written in strikethrough text, so that it was a part of the contract text that I could read, but would not have been an active part of the contract. That clause gave Routledge right of first refusal on my next book, obligating me to offer it to Routledge before any other publisher. The right of first refusal clause was one I specifically remembered from my previous Routledge contract. In that contract, it had been included and I had specifically asked for it to be removed because it seemed like a big restriction with respect to the book I was writing at the time (my self-published book). This time, as I said, it was written in strikethrough text, and when I asked about it, my editor told me that most authors wanted that clause removed. This time around, I’m perfectly happy to give Routledge my next proposal first. I’m not enthusiastically looking forward to a new round of book proposals for my next book, and unless problems crop up in the process of publishing this book, I would just as soon continue to work with Routledge and the editor who took a chance on me. Indeed, as a result of this line of thinking, I offered to have this contract included as an incentive for Routledge to improve other clauses in my favor—which I will discuss in later posts.

This post is already about as long as I will go, and I’ve not even talked through all the variety of clauses. The many considerations of the contract were a bit overwhelming, especially trying to figure out the ones that weren’t clear. In this post, I’ve talked about some of the easier clauses to deal with. The next two posts consider issues that were more difficult because of the emotional reaction to the stakes—these include the royalty clauses (the subject of my final post) as well as a number of other clauses dealing with uncertain possibilities, such as, for example, future editions of my book, which I discuss in the next post,  “Reflections on Negotiating a Contract 3: Emotionally Loaded Details”.


Reflections on negotiating a contract 1: Leverage and the power to negotiate

Reposted from the TAAOnline Blog

When I wrote my last series of posts, I was waiting to hear whether a publisher would offer me a contract for my book for graduate students. The publisher—Routledge—did make an offer, marking the pleasant culmination of the 10+ month proposal process, and I could begin to look forward to publication, most likely in 2020 of my book titled Literature Review and Research Design: A Guide to Effective Research Practice. Getting the offer was a great milestone, but it didn’t put an end to the larger process of getting published. The next phase began with the question of whether to accept the offered contract and whether and how to negotiate for changes. As with my previous series of posts, I offer the reflections of a relative novice, not the advice of an expert.

With the offer came the question of contractual terms and negotiating a contract. The initial offer came with basic terms—royalty rates and some other points. A few days later, it was followed by the formal contract which brought a large number of additional issues into play. The excitement of getting the contract offer was significant, but not so exciting that I would just accept any contract, either. Getting an offer increases my confidence in my book. Although I don’t want to look for a new publisher to make an offer, nor do I want to self-publish again, they’re real options rather than taking what I perceive to be a bad contract. Unfortunately, I’m not entirely sure what makes a good or bad contract.

Once before, I was involved in negotiating a publication contract, also with Routledge, when they published the scholarly book of which I was second author. With one contract already under my belt, I had  slightly more experience than none at all. I knew what a Routledge contract looked like ten years ago, and not much more. For that previous contract, I had simply followed the lead of my first author, and he wasn’t particularly concerned with details, so we basically accepted the contract they offered. But this time, I had no first author to follow; this time, I was in charge, with the corresponding privileges and responsibilities, and the anxieties, too. Being a careful and cautious person, dealing with the myriad specific issues covered in a contract was/is quite intimidating.

The contract I received was about 13 pages long, with about 25 main clauses, many of which had several subclauses. I read through it all carefully. Some of it was obvious, some less so. Some of it seemed totally reasonable, some less so. Not surprisingly, I suppose, it was not all exactly as I would have best liked it. But to what extent could I negotiate changes? Did I have any power to negotiate, or was I simply at the mercy of the publisher’s offer? I decided I had enough power to at least negotiate a little but not very aggressively.

Although I was not desperate to sign, I really didn’t want to get back into the process of sending out proposals. This was a strong incentive to accept their terms. The fact that I would prefer to work with Routledge (a preference that might be naive) was also incentive. Furthermore, I did not perceive myself has having a great deal of leverage: I am not already famous; I do not have any prestige stemming from institutional affiliation. These considerations weighed in favor of just accepting their terms without negotiation for fear of losing the contract.

Balanced against that was my confidence in the quality of my work, and in my ability to either find another publisher or self-publish. Essentially, as I saw it, I had only the leverage of the book itself, plus, perhaps, a little added because the editor had invested her effort in it. It is a strong book, I believe, and good enough that the editor had invested her time and budget to look at it, get reviews, and promote it for a contract—for that matter, she used the time of the publishers, too, when she presented it as a possible project. So, whatever general weakness in position I suffered as an unknown, I did have the book going for me. I focused on this bit of negotiating leverage for emotional support because it was better than having nothing.

For a large number of clauses, I had questions or concerns, including those that covered royalties, copyright infringement, right to future editions, permissions, and the book title. Many of these seemed to me like they favored the publisher more than I felt appropriate, but it seems to me that most contracts I sign or agree to are filled with unavoidable unpleasantness, and can’t be changed. (For example, the Terms of Service contracts that I accept on myriad websites don’t leave any room for negotiation, must be accepted to use the service, and contain all sorts of unpleasant clauses). For this contract, I felt like I did have the opportunity to negotiate because it was a contract written specifically for me. And so, I asked my editor lots of questions as a way of approaching possible negotiation.

If there is an overall theme to this series of posts, it would be that it doesn’t hurt to ask. I asked a lot of questions and in response, Routledge made a few changes in my favor.

Because of my appreciation of the value of the contract and the desire to avoid alienating Routledge, I asked with courtesy and without contention. Realistically, I was mostly ready to accept what they had offered, and didn’t expect that they would make changes in my favor. But, to protect my own interests, I asked. And it was a contract that I could actually negotiate. In this case, I did have the chance to negotiate; I decided I ought to use it.

On the general point of having negotiating leverage, it is worth keeping in mind that even if you have no leverage beyond that of your book, you do have that. You didn’t get a contract offer unless the publisher had some hopes it could sell; they may be willing to make some concessions to keep the rights.

In my second post in this series, “Reflections on Negotiating a Contract 2: Myriad Details”, I will consider the wide variety of issues that came up as I read my contract.