Category Archives: Publishing Contracts
From time to time an author will do something that causes me to scratch my head. I’ve compiled a list of these foibles and offer it here with a light heart. If you have perpetrated any of these transgressions I’ll let you off this time without a fine, but don’t let me see you in this courtroom again.
I must say right off the bat that among the things authors do that irk me, delivering manuscripts late is not one of them. Lateness is the medium in which agents live. We breathe late manuscripts and eat late checks and drink late contracts. And lateness in a creative person is certainly more understandable and forgivable than it is in a business organization. I have never known an author to be deliberately late with a book, but I have known many a publisher to be deliberately late with a check.
What kills me, however, is authors who don’t tell me they’re going to be late. Publishers schedule books many months in advance, and in most cases are able to pull one out of the schedule if given sufficient notice. In most cases, too, a publisher will grant the author a reasonable extension of delivery date. If, however, out of embarrassment or some other reason (such as a moonlighting gig the agent doesn’t know about), an author doesn’t level with his agent, he will not only get himself into trouble, but his agent as well. An agent who knows the truth can go to bat for his client, make excuses, concoct a fib. But if an agent sincerely assures an editor that a book will be turned in in June because that’s what his client told him, when the client knew all the time that there wasn’t a chance in hell that he could make the deadline, the agent’s credibility will be damaged.
I make very few inflexible rules for my clients, but this is one of them: no matter how embarrassing your reasons may be (one author’s dog actually did eat his manuscript), I insist that you tell me the truth so that I can make proper excuses for you. (I, of course, have never lied on behalf of a client. What kind of agent would I be if I lied on behalf of a client?)
Lying to your agent is a mortal sin, but authors commit many venial ones as well, and oddly enough, it is the latter variety that drives me absolutely up the wall.
Take authors who misspell “Foreword,” for instance. I strongly feel that anybody who turns in a manuscript containing a “Forward” deserves automatic shredding of his manuscript plus the first three fingers of his right hand. You would think I would not have to explain to professionals who make their livings with words that a foreword is a fore-word, a word that comes before the main text. But as the Forward-to-Foreword ratio on manuscripts submitted to my agency is about one out of three, I can see that the correct spelling cannot be stressed enough. It should be enough to remind you that “Foreword” is usually the very first word one’s eyes fall upon when opening a manuscript. (I hesitate, however, to criticize writers for not knowing the difference between a foreword, a preface, and an introduction, since I don’t understand it either.)
The Forward-Foreword offense is part of a larger conspiracy to send agents to early graves. I am referring to authors who don’t review their manuscripts before submitting them. An occasional, random typo is one thing, but when I realize that the author never bothered to reread his manuscript, have it vetted by a good speller, or run it through the spell-checker on his computer, a murderous rage comes over me and I am compelled to steal into the night to overturn garbage cans and scratch automobile fenders with my ring. Don’t authors understand (I growl at alley cats as I kick them) that today’s literary marketplace is so intensely competitive that a poorly spelled manuscript can lose somebody a sale?
A subspecies of the above-mentioned type misspells critical words and names, and misspells them consistently, focusing a glaring light on his or her own carelessness. I remember a Biblical novel in which the word “Pharaoh” was misspelled “Pharoah” throughout, and in a book that long, that’s a lot of Pharoahs. I have often wondered why, if the word is pronounced fayro, lexicographers have chosen to place the a before the o. In fact, what is an a doing in the second syllable at all? Such speculations do not mitigate one’s intense annoyance at having to correct such errors over and over again in saga-length manuscripts.
Speaking of repetitious errors, I’m reminded of those authors who print the title of their book as a header on every page of manuscript. I don’t know where this quaint custom arose. I suppose it has its origins in the paranoiac fantasy that part of a manuscript will inadvertently be separated from the rest in a publisher’s office.
Against this remote possibility must be weighed the not-so-remote one that the title you print on every page of your manuscript will be a lousy one. Like many publishing people I am a fanatical believer in the importance of titles: a good or bad one can significantly affect the fate of a book. All too often I’ll get a good book with a bad title, and after kicking alternate titles around the author and I will agree on a new one. I’ll then prepare a new title page only to discover that the discarded title appears on every page of the manuscript. Now what? I must now either go out with a badly titled book or have the entire manuscript reprinted just to knock the offending title off every page. Luckily, the advent of word processing makes it easier to run off modified manuscripts. Still, do us both a favor and leave the title off the header of every page.
Nowadays manuscripts are submitted as email attachments. But many agents still prefer to read submissions in printed form. The peeve potential here is very high. On occasion an author will send me a manuscript ring-bound like a scientist’s notebook. I ask myself what terrible thing I did to this person that he should avenge himself on me so cruelly. Am I supposed to read his manuscript standing up at a lectern, or remove the pages from the binding rings knowing that I will have to reassemble it when I am finished?
I think it’s time that writers understood something about literary agents: their standard reading posture is supine, head elevated sufficiently to glance at a baseball game or sitcom on television. Now that I’ve revealed this tightly guarded secret, perhaps you’ll be more considerate and submit your manuscript unbound. And is it too much to ask while I’m at it that it be double spaced in 12-point font and printed on one side of the page only?
And when you do post it, may I ask you not to have it bound or specially boxed or wrapped? Just a loose manuscript in a typing paper box wrapped and taped securely enough to get safely through the postal system. There seems to be a law of nature that the quality of a manuscript declines in inverse proportion to the elaborateness of its package. When I receive a manuscript bound by brass screws with a plastic embossed cover, lovingly wrapped in chamois cloth, set in a velvet-lined cedar box, shrink-wrapped, packed in turn in a fireproof strongbox secured with iron bands, I am prepared to stake my career on the likelihood that this book is one colossal dud. And in all likelihood it will be sent via Fedex or courier with the expectation of an overnight response.
There is a particularly lukewarm place in my heart for foreign authors who are obliged to use typing paper of different dimensions – approximately ½ inch too long and ¼ inch too narrow – from the standard American 8½ by 11 inches. I realize how chauvinistic it must sound to deplore the paper that was probably good enough for Thomas Mann, Jean-Paul Sartre, and Graham Greene, but because agents usually place manuscripts in submission boxes to protect them and present them attractively, it drives us crazy to get a misshapen manuscript from the Continent requiring Procrustean measures to package the submission.
Authors who submit their only copy of a manuscript are, to say the least, an intense source of curiosity to me. They brazenly challenge the immutable law guaranteeing that that manuscript will get lost in the mails. The advent of computer document management and cheap photocopy services has stimulated a rise in lost manuscripts, for authors who used to type an original and carbon now type an original only and bring it to a photocopy shop, where another immutable law causes it to get mixed up with somebody’s master’s thesis. Again, the development of computers will eventually make the question of lost manuscripts academic, but computers can crash. So keeping a hard copy is definitely a good idea.
Then there are the authors who administer tests to their agents. Some try a cute trick of turning one page in their manuscript upside down. If the agent returns the manuscript with that one page still upside down, it proves he didn’t read the manuscript page for page. There are authors who quiz their agents about specific scenes and characters. A typical dialogue might sound like this:
AUTHOR: Did you like my book?
AGENT: Oh, yes, loved it, loved it.
AUTHOR: Great. What did you think of my character Pflonk?
AGENT: Pflonk? Terrific character. Nicely developed.
AUTHOR: Hah! Gotcha! There was no such character in my book!
I assure you that when it comes to an important book your agent reads your manuscript carefully. With so much riding on it, he has to. But most agents I know don’t have time to read their clients’ work page for page, nor do they need to in order to get a sense of its quality, organization, and pace. In fact, they don’t even need to in order to sell it. With certain kinds of material, such as books in a series, a light once-over is enough to satisfy your agent that all is in order and the work follows the original outline.
Plainly, the evil that authors do may be categorized as Class B Misdemeanors, punishable by groans, rolling eyes, sighs of frustration, and indulgent smiles. I would like to think that you are as tolerant of your agent’s foibles. Agents do have them. (I know this only from talking to authors). There is one extremely successful agent who likes to boast he’s never read anything he’s sold. And there’s another who, every time he makes a big deal for a client, gloats, “That will pay for a new set of radials for my sports car,” or, “Now I can put that new wing on my house.”
I consider myself truly fortunate in not being possessed of any personality traits that irritate others. Well, maybe one or two. All right, maybe a few more than that. Okay, okay, so I’m riddled with them. But at least I know how to spell “Foreword.”
This article was originally written for Locus, The Newspaper of the Science Fiction Field. It’s reprinted in Mastering the Business of Writing. Copyright © 1990 by Richard Curtis. All Rights Reserved.
In this second part of our discussion of collaborations (click here to read the first part), we’ll examine a collaboration agreement and discuss the salient terms. What are the financial arrangements and the split between co-authors? How are the credits and bylines accorded? Who’s liable for any claims arising out of the collaboration? There are countless considerations and just as many pitfalls.
What are the contractual arrangements in a collaboration? Well, when you talk about contracts, bear in mind that there are two kinds in a collaboration. One is the publishing contract; the other is the collaboration agreement. Depending on the nature of the project, sometimes the former comes first, sometimes the latter. If the book is already sold – a celebrity autobiography, say – the first contract drawn up would be the one with the publisher. Thereafter, when a co-author is found, a collaboration agreement would be drafted. But if the book requires the celebrity and the writer to spend several weeks together to work up a presentation for publishers, then the collaboration agreement would be the first document drawn up, the publishing agreement coming later, when the book is sold.
Sometimes the terms of the collaboration can be worked into the publishing agreement, but I recommend a separate collaboration agreement because things often need to be worked out between collaborators that aren’t covered in publishing agreements. Publishing agreements define the collaborators’ joint obligation to their publisher, but they don’t define their obligations to each other.
Let’s examine a collaboration agreement and discuss the principal terms.
The first thing is how the money is to be divided when the book is sold. There are countless ways to do this, depending on the project, the amount of money involved, the relative importance of the celebrity and co-author, and many other factors. Let me outline a few scenarios.
• A famous actress is offered a lot of money by a publisher to write her memoirs. Though her story, like any other, requires a certain degree of skill to tell, she and her publisher agree that just about any competent writer will get the job done. They go to a young journalist eager to get his name on a book and offer him a flat fee of $10,000, which to him is a lot of money. They also offer him a “with” or “and” byline on the book, but no participation in royalties, magazine rights, or foreign translation or any other subsidiary rights. He accepts the offer because it’s a good opportunity to break into books, earn some money, and bask in the presence of a legend of stage and screen.
• A young dairymaid is walking through the woods, minding her own business, when there is a tremendous roar and a blinding flash, and next thing she knows she’s in a spaceship being interrogated by little green aliens. They take her to their world for a year, then return her to earth and drop her off in the woods where they picked her up. She immediately runs to a literary agent’s office babbling about what happened to her. Persuaded that her tale is true (agents are suckers for a good story) but realizing she’s going to have a tough time making anybody else believe her, he convinces her to team up with his client the Pulitzer Prize-winning journalist, whose identification with the project will legitimize it in the eyes of his publisher and his public. For that privilege, however, the journalist wants 75 percent of all revenues earned by the book. He also wants the first $25,000 of the publisher’s advance; if his agent is unable to line up a deal for an advance greater than $25,000, the dairymaid will receive nothing until the book earns more. The principle here is that professional writers depend entirely on their writing for a living, whereas their collaborators usually earn a living from some other source (acting, running a business, playing ball, milking cows). Thus the writer’s financial needs must be served first. In no position to argue, the dairymaid agrees to these terms.
• A tycoon who built Fingfang Enterprises from scratch into a multibillion-dollar multinational octopus decides his life would make fascinating reading and goes to an agent, asking him to package his life story. Since the agent is by no means as sure as the industrialist that publishers will fall all over themselves to bid for such a book, he tells the man he’ll have to pay a writer $5000 to spend a month interviewing him, examining news clippings and other documents, and writing an outline. The man will recover his $5000 if and when the book is sold, but if the book isn’t sold he loses his investment. After recouping his $5000, he and the writer will split all income 50-50. The man balks at 50-50: After all, it was his life, and all this writer is doing is putting down what he tells him, right? Wrong, says the agent; there is far more involved in collaborating on a book than merely taking dictation. The man still balks. After all, once the book is out the writer’s contribution ends, but he’s got to go on all those talk shows the publisher is going to send him to. Seeing his point, and realizing that this is the kind of man who isn’t happy unless he thinks he’s gotten a better deal than the other guy, the agent suggests that after the book earns $100,000, the split will go from 50-50 to 75-25 in the mogul’s favor. “Done,” says the man, switching his cigar to his left hand so he can shake the agent’s hand with his right.
As you can see, there is no one way to slice the pie, but there is a kind of guiding principle. In theory, all collaborations should be 50-50 propositions because the subject can’t get his book written without the writer, and the writer doesn’t have a story without the subject. But on many occasions one member of the team turns out to be more important than the other, or feels he’s more important, and an accommodation must be negotiated. When that happens, some tradeoffs may be made on the other terms of the collaboration.
After the question of dividing the proceeds, the thing that concerns writers most is the byline: Will their name appear on the cover of the book, and if so, in what form? With a “with”? With an “and”? In the same-size typeface or smaller? For many writers, the byline is almost as important as the money; for some, it is more so. For that reason, the byline is the commodity most frequently used as barter in negotiating with the subject-author: “I’ll keep my name off the book if I can have one-third of the proceeds instead of the one-quarter you’ve offered me.”
The byline may be worked out in all sorts of ways. Prominent figures often feel that the appearance of a co-author’s name on their books implies that they are not entirely literate. That may be a reasonable assumption for, say, some athletic stars or ex-convicts (though I can think of exceptions), but if it’s the chairman of a conglomerate’s board or a former President of the United States, the appearance of a co-writer on the byline of his book may cause potential buyers to question just how candid or interesting the book will be. Therefore, the subject-author may insist that the book be done as a straight ghost job, and recognition of the writer’s contribution restricted to an acknowledgment inside the book. Even here the writer might be able to negotiate a separate acknowledgment on its own page, as opposed to citation in a long list of contributors to the preparation of the manuscript, which reduces the writer’s involvement to the same level as that of the copy editor, typist, and secretary.
For other principals, the issue of the byline is a matter of complete indifference, and indeed, they can be most gracious in according credit to their partners. In still other cases, the co-author’s byline is the more recognizable of the two, almost the raison d’être for the book, and the publisher insists that it appear prominently on the cover and in all advertising.
Related to the byline is the question of whose name the copyright will be taken out in, and this should be stipulated in the collaboration agreement. But generally speaking, if both the subject-author and the collaborator are signatories to the publishing contract, then the book will be copyrighted in both their names, for both are defined as “Author” in that contract even if the co-author’s name does not go on the cover of the book.
Liability is the next matter to be considered. If someone brings a lawsuit against the publisher and authors claiming libel, invasion of privacy, defamation of character, infringement of copyrighted material, or some other grounds, which of the authors is liable? It’s easy to imagine the responsibility going either way. On the one hand, the subject-author might tell his collaborator a story whose veracity the collaborator cannot check and that subsequently triggers a lawsuit. Is the collaborator to blame? On the other hand, suppose the co-author embellishes on something the subject-author told him, or goes to the library and plagiarizes a quotation, or is lazy about checking the accuracy of the principal’s assertions, and a lawsuit ensues. Is the subject-author to blame?
If both of them signed the publishing contract, the publisher is not going to try to sort out who is responsible, or more responsible, for the actionable material in the book. Both agreed to the warranty and indemnity clauses in the contract, and both are therefore equally liable for any breaches of those clauses. If, however, the two made some provision in their collaboration agreement about who was responsible for what in the book, then one may be able to recover his legal expenses or damages from the other. If, say, the subject-author guaranteed that he would be liable for the truth of any anecdotes, assertions, or opinions and the co-author guaranteed that he’d be liable for the veracity of his research and of his interviews, there’s a chance that the blame for a lawsuit could be clearly assigned to one or the other of the authors. This procedure is known as cross-indemnification: I indemnify you, you indemnify me.
In actuality, it’s extremely difficult to keep sharp the dividing line between the authors’ responsibilities. The co-author is responsible for checking the things the subject-author tells him; the subject- author is responsible for reviewing the research and writing of his collaborator. For safety’s sake, the manuscript should be reviewed by both the authors’ lawyers and the publisher’s.
Another important matter is expenses: How are they defined, and who pays for them?
Among the more common expenses in a collaboration are research assistance, the transcription of tape-recorded interviews, picture permissions, legal expenses, and typing. If the collaborators don’t live in the same place, there may be expenses for travel and accommodations and for long-distance phone calls.
The collaborators should agree at the very outset which expenses are legitimate and perhaps fix a ceiling on them. It might, for example, be inappropriate for the co-author to charge for the cost of paper, cassettes, or public transportation to the library for research, as these are usually part of a writer’s costs of doing business. It can work the other way, too. Suppose a famous Hollywood movie director is collaborating with a New York writer and has to come to New York on business. While in New York, he intends to sit down with his collaborator and work on the book, but that’s not the sole purpose of his visit. It would be patently unfair for him to charge his first-class airfare and one week’s lodging at the Sherry-Netherland Hotel to the collaboration.
The expenses are usually laid out by the party incurring them, who then recovers them from the publisher’s advance on acceptance of the manuscript. The burden of expenses is usually divided in proportion to each collaborator’s participation in the proceeds from the book. Thus, if the collaborators are splitting all revenue from the book 50-50, they should split the expenses 50-50, too; if 75-25 in favor of the subject-author, then he should pick up 75 percent of the costs while the co-author assumes 25 percent.
Like the expenses, the duties of the collaborators should be spelled out, though they are usually harder to quantify. The subject-author should agree to make himself available for interviews by the collaborator; to furnish newspaper clippings, diaries and journals, and other written material; and to cooperate with the coauthor in arranging interviews with his friends, family, and business colleagues. The co-author pledges to supplement the principal’s interviews with his own research, which includes checking the veracity of statements and assertions made by the subject-author. The co-author may also stipulate delivery dates of the manuscript to the subject-author; he may also have to clear permissions for quotations or pictures and to deliver signed permissions or other releases to the subject-author. Other duties and obligations may be specified here: The co-author might have to promise to phone the subject-author every two weeks with a progress report or send him each chapter of the book as it is finished.
It is very important to stipulate approval of the manuscript when you prepare a collaboration agreement. In most cases, the subject-author is granted sole approval, or sole approval subject to the editorial judgment of the publisher. This seems only fair, for after all it’s his or her book, not the collaborator’s. Yet the collaborator may have some strong objections to the subject-author’s inclusion or exclusion of certain material. So there is sometimes built into the agreement machinery for settling disputes, with the agent or editor or a lawyer being appointed arbiter.
If an agent is involved, there should be language in the collaboration agreement mutually authorizing that agent to act on behalf of both parties in the submission of the manuscript, the negotiation of the book contract, the collection and disbursement of proceeds, and in the exploitation of subsidiary rights, including serial, British and foreign translation, and movie and television. The agent’s commission schedule must be detailed, along with any special provisions concerning him: authorization for him to deduct certain expenses, a time limit on his handling of the project or of subsidiary rights, appointment of him as final arbiter of disputes between collaborators, etc. If there are two agents, as sometimes happens when the principal is represented by one firm and the collaborator by another, the questions of which one will handle the marketing of the manuscript, negotiation, collection of proceeds, and the exploitation of subsidiary rights must be answered.
Finally, there ought to be some provision for the termination of the collaboration in the event of the death or disability of one of the parties, because of failure to perform contractual obligations, or because the collaborators simply don’t get along. If the collaboration does collapse, both authors may owe the publisher a refund or one member of the team may owe the other some money advanced toward the development of the project. Precisely how the accounts are to be settled should be made clear in the agreement between the writing partners. No document can blend two conflicting personalities, which is why I repeat my advice that if you and your collaborator don’t hit it off, break off the relationship before it mires the project in grief if not in a lawsuit. But if the two parties enter the relationship in a spirit of good faith, a well-constructed collaboration agreement will go far toward insuring the success both of the friendship and the book.
From How to Be Your Own Literary Agent by Richard Curtis, published by Harcourt Houghton Mifflin
Most book publishers’ contracts have provisions granting authors the right to examine the books and records of their publishers under certain conditions: for example, the examination must take place on the premises of the publisher during normal business hours; no more than two audits may be conducted in any given year; an audit must be commenced within a reasonable time after the issuance of the royalty statement in question; the records on any given book shall not be examined more than once; the publisher is not required to keep records on a book for more than a certain period of time, etc.
Although, I am told by one accountant, examinations of publishers’ accounts are on the rise, invariably these have been conducted by authors with lucrative contracts. I can say with certainty that the vast majority of authors has only the vaguest notion of what is involved in an audit. Perhaps we can rectify that problem here. Harder to rectify is the somewhat bovine attitude on the part of many authors that their contracts are too small to merit auditing, and the royalties to be liberated by an examination of a publisher’s books would not be worth the cost, which can run to a thousand dollars a day or more.
These assumptions are not necessarily correct. While a publisher’s profits from midlist and category books are indisputably smaller than those from best-sellers, the total profits from the former can be immense by virtue of the fact that there are so many more of them on publishers’ lists than there are best-sellers. And because most best-sellers are by established big-name authors, the huge royalties they earn are usually paid in advance, giving publishers little leeway to reserve royalties, whereas publishers commonly hold at least half the royalties collected on midlist and category books for which modest advances are paid.
If collective audits of such routine books could be undertaken, thus spreading the cost per author, they might well yield a surprisingly good return on the authors’ investment in an accounting firm. More important, such group audits would keep publishers honest by exposing questionable accounting practices. It is therefore heartening to note that some author and agent organizations are sponsoring such group audits or making funds available for them. Because your book, or books similar to yours, might be spotlighted by an audit, you might want to tag along with the C.P.A. for a visit to a publisher’s ledgers.
Before we embark, we ought to discuss just what gives us the right to audit a publisher, anyway. As I said at the outset, many publishers grant that right in the boilerplate language of their contracts. Certainly, every author or agent negotiating a book contract should insist on an audit provision. But if it is absent from a contract through oversight or design, or if a publisher refuses to grant that right to an author, does that necessarily rule out the possibility of an audit? Not according to the attorneys and accountants I have spoken to. They maintain that any licensor whose contract calls for royalties is entitled to examine the statements and supporting data of the licensee. Therefore, whether your contracts stipulate that right or not—indeed, even if you’ve been so foolish as to waive that right—your publisher cannot legally prohibit you from auditing his books. He can make it extremely difficult: he can postpone and stall, he can “misplace” and “lose” documents, he can subject your accountant to unpleasant conditions—a monastic cell with a hard chair, rickety table, and one flickering taper. But he must, ultimately, let your accountant go over the books.
Within recent memory there were some shady publishers who did that sort of thing, but happily they were driven out of business by their legitimate competitors. Today, while some publishers are frugal with their hospitality toward accountants, many shrug and say, “Come on in, we have nothing to hide.”
Assuming your publisher is cooperative, the first step is for the accounting firm to make an appointment. The accountants will have examined the author’s contract and all royalty statements from publication date to the present and will use these as the jumping-off point for their investigation. They will then request the printer’s affidavits stating how many copies of the book were run off, along with information about damaged or destroyed copies. They will, of course, expect affidavits for all printings of the book. If there has been more than one printing, the accountants will want to know if the cover price of the book was raised.
Then the accountants will examine the records pertaining to distribution of the books, either to wholesalers or directly to book chains. The number of copies distributed plus the number of copies left in the warehouse plus the number of copies damaged, destroyed, or given away for free should add up to the number of copies printed. If they don’t, suspicion will certainly be aroused that the publisher printed copies he has not reported.
The next critical source of information is copies returned. In hardcover publishing, the books themselves are returned to the publisher for credit, and counting these, while tedious, is not as stupefying a task as counting returned paperbacks, for the dimensions of hardcover printings and distributions are nowhere near those of paperback. In paperback publishing, however, returns are usually effected simply by stripping the covers off the bound books and returning the covers to the publisher’s warehouse, saving the substantial cost of shipping whole books back whence they came.
Obviously, the job of counting paperback covers, which even for a modest-sized publisher number in the hundreds of thousands each month, is impossible to do by hand. Modern paperback houses handle the problem by printing product codes, those black-and-white coded bars similar to those you see on canned and packaged goods at your grocery store, on the backs of their book covers. The stripped covers are fed through machines that read the codes and compute title, author, list price, number of copies returned, and other data.
We now have all the information we need: number of copies printed, number of copies distributed, and number of copies returned. But there is still a gap between what the author feels is owed him and the actual amount of royalties he has been paid. That gap is the royalty on the number of copies the publisher has reserved against returns. As most authors now know, publishers create such reserves in order to give credit to distributors and stores that might return copies of books in the future. The reserve is determined by the executives who run the publishing company, and while it is to be hoped that these individuals will base their judgments on experience, reasonable evaluations of market conditions, and common sense, the existence of this tempting pool of undisbursed money has a tendency to cloud executive judgment, particularly in the pressure cooker of corporate bottom-line expectations.
Here, then, is the answer to the commonly asked question, “Is it possible for print, distribution, and return figures to be falsified?” The answer is, not without enormous difficulty, for it is neither safe nor practical to do so. For that to happen, the entire publishing organization—the clerks who document the printing and distribution information and count the returned covers, the bookkeeping and accounting departments of the publishing company, and the staffs of the printer and distributor—would have to be in on the conspiracy and sworn to secrecy. That is plainly preposterous: there simply isn’t enough profit in the publishing business to make such wide-scale corruption worthwhile.
It is also completely unnecessary, because the same results are achieved by the decision of a handful of publishing officers to fix reserves against returns at an excessively high level. And it’s all perfectly up-and-up from the publisher’s viewpoint, because the establishment of reserves is a business judgment that may be argued but cannot be cited as fraudulent—unless one takes the position that the entire system is a license for publishers to earn interest at the expense of authors.
No, my observation is that print, distribution, and return information are not falsified, at least not in a way that could be described as deliberate and systematic. It would be closer to the truth to say that publishing bookkeeping is subject to the same goofs as the bookkeeping of any other industry. And though it may seem that the errors always fall in favor of publishers, the accountants I’ve spoken to state that as many fall in the authors’ favor. Thanks in good measure to the consignment method of selling books, publishing bookkeeping is far, far more complex than it has to be, and that makes it a breeding ground for error.
One of the standard provisions of every audit clause in book contracts is that if errors of more than a certain amount, usually 10 percent of the sum stipulated in the publisher’s royalty statement, are found by auditors, the publisher pays for the cost of the audit. Such a provision might make it tempting for authors who feel shortchanged by their publishers to hire an accountant, figuring the accountant will certainly be successful in detecting an excessive reserve against returns and get at least 10 percent of that reserve released. Thus the publisher would be required to pay for the audit, right?
Wrong. A high reserve against returns may not be considered an error. It’s merely—in the publisher’s eyes at least—a judgment call, a prediction or anticipation that a certain number of copies will be returned. Anybody contemplating an audit of his publisher’s records should therefore be prepared not to recoup his accountant’s fees from the publisher. Released royalties might defray or pay for the audit, but the publisher will stoutly maintain that no bookkeeping error was made.
Is there some alternative to hiring an accountant to find out whether your publisher is giving honest weight? Well, if you can prevail on your publishers to furnish you with information about the number of copies printed, distributed, and returned, you need nothing but a pencil and paper and a grade-school math education to figure out whether you have collected everything that is due you, and what the reserve against returns is. Then it’s simply a matter of arguing with your publisher over the propriety of holding so much reserve money, or holding it for such a long time. The problem is getting that information: if publishers wanted you to have it, they’d put it up front routinely in their royalty statements. With persistence, however, you or your agent or your lawyer will be able to secure the information.
After reviewing it, however, you may feel in your bones or have other reason to believe that the figures furnished to you are incorrect, that your publisher printed or distributed more copies than he’s told you, or took in fewer returns. You will then have to hire a professional accountant to examine the publisher’s books, as the job is too complex and time consuming for untrained individuals. This is especially true if there is reprint, book club, foreign translation, or other subsidiary rights revenue—another very common source of bookkeeping errors among publishers but one that space prohibits me from analyzing in detail.
Some agents are able to build into book contracts provisions requiring publishers to furnish details of printing, distribution, returns, and reserves against returns in royalty statements, or copies of contracts and statements from sublicensees, such as book clubs and reprinters. For many agents and authors, however, it is futile to attempt to make publishers comply with such demands. This can only be achieved by collective action on the part of a determined, organized, and fearless cadre of professional writers or agents.
The screenplay opens the doors to securing financing by stimulating the interest of stars and their agents, and then to assembling the rest of the elements. Once these all come together and the money has been put up to make the film, the author can be paid. Until then the author is in effect asked to subsidize the writing of the screenplay by being moderate in his asking price for the option. In many cases authors are asked to give producers a free or nominal option against a big purchase price and share of the profits. These strangely unbalanced deals—often options of a few hundred dollars against purchase prices of hundreds of thousands—result from the fact that the option money has to come out of the producer’s own pocket, whereas the purchase money comes out of someone else’s.
Although there is a lot of activity in options of books for the movies, it can be argued that the option system is actually harmful to a book’s chances of being made into a movie. Options are usually purchased in six-or twelve-month increments, but are renewable at the producer’s option for several more six- or twelve-month periods with the payment of additional option money. The process can tie up a book for eighteen months, two years, or longer while the producer frantically tries to juggle screenplay, financing, distribution, director, and stars in the hopes of getting them to sign a contract. Nobody wants to sign a contract until he has a guarantee. The financiers may want a distribution commitment before they fork over their money; the director may want a particular star to agree to appear in the film; the star may want a terrific screenplay; the screenplay writer may want a huge fee; the studio may want the book to be on the best-seller list.
Since the odds against everyone signing are so high, it’s likely that when the option or renewal lapses, your book will have been shopped all over the movie business. Though you’ll then have an opportunity to market the rights again and pursue those who might have been interested in your book a year or two ago, the book will probably have the smell of death clinging to it, and you’ll be unable to revive it.
Clearly, it’s a lot cheaper and easier for a modestly heeled producer to option or commission an original screenplay than to get involved with books. But with the kinds of movies that are pulling in big bucks at the box office these days, it may reasonably be asked, “What do producers need books for, anyway?” So many of these films are youth-oriented, exploitive, devoid of ideas, predictably plotted, action-packed, and populated with stick-figure characters. A producer contemplating making one of these teenage fantasy films is certainly not going to seek those values in books. Indeed, he would have to search far and wide to find books dumb enough to make into today’s hit movies.
Interestingly, the one area in the entertainment industry where books are still welcome, and in fact welcome as never before, is television, and the immense appetite of the networks and cable companies does not threaten to diminish in the foreseeable future. Publishers’ lists are combed furiously by producers seeking movie-of-the-week or miniseries candidates, and because of network commitments to air scores of these films annually, the search has become intensely competitive. Many of the properties optioned or acquired are novels, but television producers, unlike theatrical film producers, plunder short stories, articles, and nonfiction books as well as novels in their quest for adaptable material.
Ironically, the quality of television movies now often exceeds that of many theatrical films. Once characterized as a vast wasteland, television has discovered ideas and begun to develop them into vehicles that are often intelligent, sensitive, moving, and controversial, touching on themes that the movies used to portray but seldom do any more. Out-of-wedlock children, incest, senility, spouse or child abuse, drug addiction, kidnapping, and physical disability are some of the themes that have been woven into recent original television movies, and few who have watched them can claim that they are inferior to most theatrical films made today or that they are not the equal of many made in the past.
From the viewpoint of the author with a book to sell, this change is of major importance, for it no longer is smart to disdain television deals while holding out for a theatrical one. It is likelier that an option will be exercised for a TV movie than for a theatrical one, and the price gap between the two media has begun to close. And, from the viewpoint of pride of authorship, the chances are better than ever that an author’s vision will be preserved intact in a television adaptation. For all these reasons I recommend that if you or your agent are approached by producers interested in adapting your work for television, and the terms are comparable to what you might get from a movie-movie producer, don’t hesitate to make that deal.
Here are some other suggestions for improving your chances of making a movie or television sale in today’s market.
• Prepare an extremely brief—no more than two pages—synopsis of your book to show to interested producers. It should be a highly compressed summary of the theme, story, and characters, and should read like a jacket blurb except that the emphasis should be on the cinematic values rather than the literary ones. Potential buyers will want to see the manuscript, proof, or printed copy anyway, but if they have time to read nothing else they will read your summary, and a well-written one will enable them to visualize the film the way you yourself visualize it.
• Give no free options, even of a few weeks’ duration. Inevitably you will be approached by would-be producers claiming they know exactly the right studio or network executive who will buy your book, and all they need is a couple of weeks to make a deal, and could you let them have just this one shot free of charge because by the time the papers are drawn up it will be too late, etc. Most agents who have dealt with movie and television people have heard this line before and shut the door on it; they’ve learned that people don’t respect properties they get for nothing. An investment in an option guarantees a certain amount of commitment and responsibility. You don’t have to draw up a complete movie contract for such a modest deal, but a deal memorandum synopsizing the highlights of the negotiation, such as option price, purchase price, profit percentages if any, duration of option and renewals, reserved rights, credits, and so forth, is a must.
As for that claim that the producer needs only a few weeks, don’t believe it. Everything in the movie business takes six times longer than you would imagine it should. I have seldom seen a movie option exercised after six months, and indeed have seen producers dig themselves into an awful hole by paying too much money for too brief an option, necessitating their renewing the option for too much money again for yet another brief option. The author who finds himself in the position of dealing with such a producer enjoys the rare pleasure of being in the driver’s seat, so if someone wants a short option, give it to him, but make him pay for it.
• Renewals of a producer’s option on your work should be more expensive than the original option and should not be deductible from the purchase price of the rights. The initial option is usually applicable against the purchase price, but thereafter the producer is in effect paying rent on your property. If you allow him to deduct renewal fees from the purchase price, he is in effect not renting your property but buying it from you in installments, and relatively painless installments at that. You’ll want that lump sum due upon exercise of the option to hang over the producer’s head like some ominous cloud. And, by making renewals more expensive than the original option, you are telling the producer that tying your property up for such a long time is an inconvenience, and one that is not mitigated by the money he’s paying you to extend your option. If you option your book before publication, try to negotiate the deal in such a way that the option expires around your publication date and is not renewable beyond that date. Your property will probably never be hotter to movie people than before it’s published, when it will not have been exposed to the entire industry or shopped all over town. Thus anyone taking an option before publication is getting your work at its ripest moment. If, by the time the book is published, your producer has not been able to make a deal, his option should expire, and expire without hope of renewal. If your book then goes on to get good reviews and/or hits the best-seller list, you have a second lease on life.
It’s often said that they’re not making movies the way they used to. That’s a matter of opinion (it happens to be mine), but if it’s true, the decline can be attributed to the fact that they’re not adapting books the way they used to. Since the golden age of filmmaking in the 1930s, the ratio of theatrical films based on books to those made from original screenplays has been steadily shifting to the latter. Today the odds that your novel will be made into a movie are distressingly low, even if your novel becomes a best-seller.
I can’t believe there are fewer adaptable books today than there have been in the past. Why, then, aren’t they making books into movies anymore?
One reason facetiously offered by book people is that nobody in Hollywood reads. Relying on my own experience, I’d have to say that’s untrue. What is probably closer to the mark is that movie people don’t have a lot of time to read, but then, neither do book people. Most of us are so busy reading manuscripts for business that we can’t spare a moment to read for pleasure. While I, like so many of my colleagues, can read three or four book-length manuscripts in one evening, I have been plodding through a published biography, at a rate of a few pages a week for over two years; it’s taking me longer to read that sucker than it took the author to write it!
At any rate, what little reading time movie people have is usually spent reading screenplays. Books are synopsized for them by readers, and only if a reader’s recommendation makes the book sound as if it has strong movie potential will a producer read the book itself. And sometimes not even then.
The downward trend in film adaptations follows the decline of the studio system and the corresponding rise of one revolving around independent producers. Under the old arrangement, all-powerful studios acquired best-sellers and other literary properties and adapted them for producers, directors, and stars belonging to the studio “family.” The studios were self-contained entities possessing financing, production facilities, and distribution capability—the three elements essential to making commercial films. After World War II, however, producers, writers, actors, and others challenged the studios in a bid for more artistic independence and a bigger piece of the profit pie. They succeeded to a degree in weakening the studios’ absolute power and control, but at a high cost: the loss of efficiency. Today’s producers cannot simply scoop up all the talent they need from one studio pool, but instead have to assemble “packages” out of a fiendishly complex and far-flung tangle of artists, agents, lawyers, unions, guilds, financiers, smaller distributors, and other elements.
This radical change has taken its toll on adaptations of books. Let’s see how.
The hardest part of getting a movie made is raising the money. It is easier to raise a sunken treasure galleon than to raise money for a movie. These days a film budgeted at $20 million is considered a home movie; indeed, $20 million is now the salary of a superstar. Still, it’s a lot of money, and anyone furnishing it to a filmmaker expects either an excessive participation in profits or an excessive say in the way the movie is made, both of which are abhorrent to a producer. Studios are not disposed to back films until all elements of the package are in place, or at least a “bankable” star or director has made a commitment.
In short, few independent producers have any money. Not long ago—twenty or twenty-five years—we used to see a number of outright purchases of books for movies. Though an outright purchase doesn’t guarantee a movie will be made, the size of the outlay, often hundreds of thousands of dollars, certainly guaranteed an earnest effort would be made to recoup the investment. Today, one seldom hears about outright sales. Everything is optioned. When independent producers start piecing together a movie deal, the item on which they least want to spend what little money they possess is the book; for them, the key item is the screenplay.
In part 2 we’ll focus on that screenplay.
In the first two parts of this article we’ve been talking about bonus advances known as “escalators.” Let’s take up the ones called movie bonuses, which are usually payable upon national release by a major distributor of a theatrical motion picture based on your book. There’s a mouthful of contingencies crammed into that sentence, so let’s analyze it.
First, the movie has to be released. Of course! you say, but many authors believe that a movie deal on their book ought to be enough to garner them a handsome bonus from their publishers. I’m sorry to tell you otherwise. Although there is some promotional value for a publisher to be able to boast, “Acquired for motion pictures by Universal,” it scarcely does a thing for sales. Thus, escalators are usually not payable when movie rights to your book are optioned, or when the option is exercised. In fact, they are not even payable when your movie goes into production.
Publishers have seen too many movie deals fall through to get excited when a star actor or producer takes an option on a book property. They have learned to their sorrow that many movies that go into production are not completed or released. So, in order to trigger that escalator, the film must be distributed.
And it must be distributed by one of the big distributors, Universal or Warner or MGM and the like, rather than any one of the thousands of little ones that service the movie community. And finally, the movie must be released nationally, as opposed to locally or regionally. The premiere of a film, even a high-budget one made by a great director with superstar actors and actresses, is not going to boost sales of the book from which it is adapted if it’s shown only at a few elite showcase theaters in New York and Los Angeles. In order for the film to have impact on mass market book sales, it must be shown at hundreds or thousands of theaters around the nation.
Again, the prices for movie escalators vary widely, from modest—in the low five figures—to very large in the case of authors with long track records in the area of books made into hit films.
Related to theatrical movie bonuses are television-movie escalators. But while the market for television adaptation of books is a very active one, the stimulus to book sales is usually minimal. Even though the exposure is tremendous, far greater than that of a theatrical movie, it is also ephemeral: an evening or two (repeated once, six months or a year later) and it’s gone. For publishers this presents serious problems of distribution and promotion. The books must be in the stores precisely on the day of or the day after the airing of the film, and the film must be so heavily publicized that consumers will be motivated to buy the book at the time of the airing. This is expensive, inefficient, unpredictable, and usually, therefore, unsuccessful.
For a television movie to mean anything in terms of tie-in value, it must first of all be an event, one absorbing a minimum of four hours, but preferably spanning a whole week of evenings. It should also be based on a best-selling book such as The Winds of War or North and South, so that viewer recognition of both the book and movie stimulate each other: you’ve read the book, now see the television movie, you’ve seen the movie, now read the book. Because very few books are converted into television events on the magnitude of, say, Shogun, the prices for escalators in this medium are considerably lower than they are for release of a major theatrical film adaptation of your book. The conditions are that the TV film be of at least four hours, run on consecutive evenings, and be aired originally on a major television network.
Escalators fall into a number of categories. The most common is the bestseller bonus. The best-seller list usually used to determine escalators is the one in the book review section of the Sunday edition of the New York Times, though sometimes the one in Publishers Weekly is also used. There are several ways to structure best-seller bonuses. One is the length of time that a book is on the list, another is a book’s position on the list. It is desirable for a book to be on the bestseller list for a long time, of course; it is also desirable for a book to be high on the bestseller list. Bonuses can be structured to reward length or position or both.
A long run on the list, even at the bottom, can be significant, both because it means the book is selling strongly over a long period of time, and because it enables the publisher to boast, “_____Weeks on the Bestseller List!”
Just as important is position on the list. The higher your book rises, the better it is, naturally. But the book that reaches the number one position causes a quantum leap in promotional value, even if it drops down or off the list the very next week. Therefore, many escalator schedules in book contracts are heavily weighted in favor of the number one slot.
The actual sums paid at the various stations of the list can vary widely. I have negotiated bestseller escalators for as little as a few thousand dollars and as much as high six figures.
There are a couple of other features of escalators I should mention. Almost all such provisions place a limit on the total extra money payable to the author, called a “ceiling.” The other aspect is that escalators, or escalator installments, are payable within a short period of time after the event that triggers them. Thirty days is as long as it should take for most bonuses to be paid, otherwise the publisher will be taking back in interest what he owes you in bonus money. If a publisher waits until royalty time to pay you your escalators, that’s not much of a bargain.
Another form of escalator is book club or paperback reprint, wherein your publisher agrees to pay you additional advance monies if a book club or paperback reprint deal on your book exceeds a certain amount of money. As we’ve seen, such escalators are almost invariably of the pay-you-with-your-own-money variety, because your publisher is guaranteed recoupment of the bonus out of the money he will eventually collect from the book club or reprinter. The only thing he loses is interest on the prepayment to you of money he would otherwise have paid in the normal six-month royalty cycle.
Last stop on this escalator tour – movie bonuses.
A term commonly heard in discussions of book deals is “escalator.” For instance, “Her book was bought for an advance that, with escalators, could exceed $1 million.” Escalators are additional advance payments made by publishers to authors if and when certain contingencies occur. What are those contingencies? How much are they worth? And what, if anything, is their real value?
Escalators were created, among other reasons, to bridge the gap between author and publisher when negotiations reach an impasse. You strongly believe your book will be a best-seller or will be bought by a major book club or made into a motion picture, and you feel that your advance should reflect the same optimism on your publisher’s part. Your publishers, on the other hand, hope and pray you’re right, but have seen many a slip ‘twixt the cup and the lip. They cannot afford to overpay authors on the strength of hope alone. Of course, if your track record justifies it—if your last five books have soared to the top of the best-seller list; been main selections of major book clubs, and been made into hit movies—they will be greatly disposed to pay you a lot of money up front. But let us say, for the sake of argument, that this is not the case.
The answer is for the publishers to offer you escalators. These bind him to pay you scheduled sums of money if, and only if, your optimism turns out to be justified; if it doesn’t, they owe you nothing beyond whatever royalties your book may earn over its original advance.
In the first installment of this article we discussed the circumstances in which authors voluntarily give up all rights to their copyrighted work. There are numerous situations in which work-for-hire may be considered reasonable and acceptable by normal ethical standards.
Another application of the work-for-hire concept that most of us accept unquestioningly is ghostwriting. Authorities or celebrities who cannot write well or are too busy to write their own books engage writers to draft books for them. Although the principal author may agree to share some of the proceeds of the book with his ghost, the principal is the sole signatory of the contract with the publisher, thus making him the copyright owner. He then signs a separate agreement with the ghost, removing that person from claim to copyright and direct participation in revenue generated by publication of the book. Occasionally, what may have seemed a fair fee at the time it was negotiated with the ghostwriter may not seem so if the work demanded of him turns out to be excessive, or if the book becomes a runaway best-seller. Under ordinary circumstances, however, the ghostwriter accepts his lot as a worker-for-hire, and may at least secure more work for himself by telling publishers, “That book was actually written by me.”
If one were to compose a Bill of Rights for authors, ownership of copyright to their works would certainly be close to the top of the list. We hold self-evident the truth that if a person produces an original book-length work, he or she is entitled to proprietorship under the law, and to full benefit of its commercial exploitation.
Yet, it has not always been so. The piracy of literature by printers, publishers, and booksellers has been common practice throughout the world from the dawn of the printed word, and was prevalent in this country until well into the present century. Until the establishment of the first International Copyright Convention in 1891 and its refinement after World War II, respect for the sanctity of copyright was largely a matter of gentlemen’s agreements based strictly on self-interest—don’t steal from me and I won’t steal from you. There are still vast areas of our globe where publishers think nothing of stealing and distributing works of literature from authors and publishers of law-abiding countries, and the emergence of electronic and online media have made it a big business. Piracy of books, videotapes, music, and other intellectual property may be condoned if not sponsored and supported by some governments.
Lest you become too smug that such barbarities cannot happen here, I am compelled to report my observation that the appropriation of authors’ copyrights by publishers and book packagers seems to be on the upswing. Nothing so gross as piracy, mind you. More, I would say, like extortion. But the effect is the same: the deprivation of authors’ rights to enjoy the fruits of their labors. The fruits of an author’s labors include such bounties as royalties on copies of books sold, participation in reprint income, and revenue deriving from the exploitation of serial, translation, dramatization, electronic, and other subsidiary rights. Not everyone shares the conviction that the enjoyment of these monies is a natural and God-given right, however. Indeed, not everybody behaves as if the enjoyment of these monies is protected by statutory law.
The engagement of writers for flat fees falls into a category of employment known as “work-for-hire.” Work-for-hire is a doctrine defining the relationship between a copyright owner and a writer. Note that the owner may or may not be an author; he, she, they, or it may be a corporation (like a movie studio or television production company), a syndicate of investors, or an individual who is not a writer. These entities hire writers to perform a service in pretty much the same way a homeowner hires a cabinetmaker, a painter, or a gardener, except that in this case the task is writing a text for the “boss”—the creator or owner of the idea. The owner is then free to exploit the text in any way he desires with no further obligation to the author.
Some provisions of the 1976 Copyright Act attempt to define the work-for-hire concept, but they do not do so very clearly and have left the door open to unfair exploitation of authors.