Literary Contracts: Author Compensation

It's time to cover the fun part of a book contract: the royalty clauses.

The standard author/publisher relationship involves a transfer of rights (by grant or possibly other means) from the former to the latter. The publishing house gets the right to exploit the work in a number of ways, and the writer receives some form of compensation in exchange. The most common form of author compensation is the royalty payment.

The frequency and size of royalties can vary, but every royalty is a payment made to the author of a work derived from a percentage of the book's price. A common practice is for the author to receive 10% of the cover price (or more accurately, the publisher's invoice price) for the first 5000 copies sold, 12% on the next 5000, and 15% for every sale over 10,000 copies.

Now we come to the topic of advances. Contrary to a popular misconception, an advance isn't like a signing bonus. It is instead exactly what the name implies: an advance payment against future royalties. Publishers calculate advances based on projections of initial sales. For example, a publisher might offer an advance on the first 1000 copies sold. At the standard royalty rate of 10% and an invoice price of $20.00, the advance comes out to $2000.

The amount of the advance is important because the publisher doesn't have to start making royalty payments until the advance has been recouped in sales. The way it's done is that the publisher keeps the 10% royalty for every copy until royalties on actual sales exceed the advance amount. Therefore, an advance is more like a lump sum court settlement or lottery payout than a bonus (although you can and should get them in installments).

Although royalty payments technically begin after the advance has been paid back, very few books ever manage sufficient sales to do so. Therefore, the advance is likely the only compensation a writer will receive. The good news is that authors aren't obliged to issue refunds on advances to publishers if their books don't sell.

Alternate methods of compensation do exist. For instance, a publisher might offer a writer a percentage of net retail sales. However, as we all know, "...the net is fantasy." (1:18)

First Playtest

Thanks to everyone who helped test the first version of my Soul Saga RPG. I am diligently implementing most of the suggestions I received, including streamlining combat while retaining the damage system's sense of realism.

In addition to revisions, I'll also be adding myriad game elements, including alternate "magic" systems, Worked items, new races, and more character traits. There will also be plenty of flavor text to flesh out the setting.

Thanks again for the excellent feedback.

Sean Bean Involved in Bar Fight

That's not actually true. The fight happened outside a bar.

Despite getting cut with broken glass, the star of A Game of Thrones and The Fellowship of the Ring declined medical attention and had another drink.

What I want to know is, how's the other guy?

Souldancer Progress Report 2

Last week I'd reached page 196 in my revisions, at which point I hit a roadblock. After days of deliberation, I finally decided to cut the entire original scene and rewrite those pages from scratch. These rewrites took me back to the beginning of chapter 11.

Today I worked back up to page 196. I'm pretty satisfied with the changes. A couple of plot holes and deus ex machina scenes have been corrected, and the new material provides a smoother transition to later developments.

A Game of a Game of Thrones

I just tried out the living card game based on A Game of Thrones. Most of you probably know the difference between a CCG like Magic: The Gathering and and LCG like this one, but for the record, it means you don't have to obsessively buy cards to fuel your habit. Four full decks are provided right out of the box, allowing play to begin immediately.

I'd played the Legend of the Five Rings LCG before giving Fantasy Flight's A Game of Thrones a spin, and they're pretty similar in terms of mechanics. However, since I like the IPs associated with the latter more, the Game of Thrones LCG was a bit more fun.

Your Book Is not Your Khakis

As Tyler Durden so eloquently pointed out, few of us will ever achieve movie star, rock god, or millionaire status, despite TV's claims to the contrary. Not only did Fight Club acquaint us with this paradox of contemporary society, it did so for the right reasons. Instead of preaching a defeatist apathy, Durden and the other members of Project Mayhem celebrated the intrinsic value of human talent, though admittedly to an extreme degree.

The point remains that purely utilitarian, materialistic ends shouldn't motivate the pursuit of one's passion. That kind of value system is what's gotten Hollywood mired in the stagnant depths of sequel and reboot obsession.

Not that an artist doesn't deserve just compensation for the years of effort it can take to create a finished work. The simple fact is that it's pretty amazing when anyone produces a sculpture, writes a poem, or scripts a play, whether or not the achievement gets major recognition.

Some of the best advice I've heard on the use of talent was given by Bill Flanagan to Sinead O'Connor when her career was on the rocks. When she lamented that she still had a lot of songs left in her, he told her to write them anyway, even if she just left them unrecorded in a shoebox.

I've often heard professional authors caution amateurs to curb their dreams of the elusive six-figure advance and the highly competitive bestseller list. Art is not a field one enters for the money.

Everyone has a skill in which heredity and environment have predisposed them to excel. Allowing that gift to atrophy is a monumental waste. Plus, I hold to Tolkien's concept of sub-creation: that human beings are privileged above any other animal to be made collaborators in the ongoing beautification and perfection of nature. Engaging our powers as authors; be it as painters, writers, filmmakers, or parents, is the way in which we most closely approach the activity of the Author.

Literary Contracts

I've been reading Kirsch's Guide to the Book Contract in preparation for the hypothetical day when a publisher offers me a book deal. The horror stories of authors who entered into Faustian bargains by signing the publisher's first offer are manifold. The tragic tale of Jerry Siegel and Joel Shuster is the classic example.

The sage advice to always read and negotiate a book contract has been repeated from many quarters, but  I didn't realize how important understanding the terms of any legal agreement is until I actually read a sample contract. Publishers have had a couple of centuries to refine their dealings with authors, whereas every new author is a private individual who's starting from scratch. As a result, most boilerplate literary contracts heavily favor the publisher.

A few deal points I've learned to watch out for are language that makes broad (or even total) transfers of rights from the author to the publisher--even rights that the publishing house can't exploit directly such as film, TV, and merchandising. Other points of contention include clauses that grant the publisher total control over the form, content, and exploitation of the work without author approval (or even involvement). Unfortunately, it seems to require a lot of clout on the author's part before a publisher will relinquish this kind of control. Sometimes arrangements like this can be good, since the publisher likely knows a lot more about marketing than the author does. However, problems can arise if author and publisher have differing ideas about licensing IPs from the book to a flamethrower manufacturer.

The stuff that really requires the author's careful attention are the warranties and indemnities. This section lays out the writer's duties toward the publisher, including guaranteeing that nothing in the book will get the publisher sued. Indemnity clauses often stipulate that if someone does bring a claim, the author has to pay the legal fees. There are other things that a careless author might be forced to pay for under a standard contract, including late revisions, artwork, additional research, proofs, etc. These clauses seem to be included as incentives for the author to do his job on time.

Finally, off-the-rack book contracts feature a whole slew of escape clauses and other conditions under which the publisher can back out of the deal. If these clauses are invoked, the author won't get an advance, or worse--will have to refund advances already paid.

Luckily, publishing is one industry in which negotiating isn't only acceptable, it's expected. There are few better ways to prove that you're an amateur than immediately signing your first contract un-negotiated. Read the document. Don't be afraid to ask questions, and don't hesitate to haggle for what you want. Chances are you won't get every deal point, but life is compromise.