On Contracts and The Authors Guild

Want to keep from getting screwed over by a publisher? Consider the Authors Guild.

We've all heard horror stories of popular writers or musicians who make their publishers and labels rich while they live with mom and survive on Ramen Noodles. What happened? They were probably so delighted to get published or produced that they were willing to sign almost anything. And besides, they're artists - you know - "art for art's sake" and all that. It seems rather unartistic to haggle about a few words in a contract. As a result, they got a lousy contract that keeps them working at McDonald's when they could be making a living with their writing.

Like it or not, there's a business side to writing. And unless you aspire to study publishing law on the side, you'd probably benefit by having someone with experience in publisher contracts to look yours over before signing on the dotted line.

A writer friend recently received an offer from a publisher and immediately sent the contract to the Authors Guild. (They'll give input on contracts as a free service to their members. Annual membership is about $90, I believe.) Input from their staff attorney was detailed and invaluable, reflecting an intimate knowledge of what's standard and what's not in the industry, and what you want to push for as an author.

Example: the attorney mentions that royalties based on the publisher's "receipts" is referring to net-based royalties, which are about half what you'd get from the same percentage of list-based royalties. Thus, you should expect your publisher to offer about twice the percentage in net-based royalties that they would pay in list-based royalties.

Plus, when a publisher bases the author's cut on receipts, the publisher might give special discounts to certain distributors or sellers, putting more money in their hands and less in the author's.

That's not to say that basing royalties on the publisher's receipts is wrong. (My traditional publisher based its royalties on their net, or receipts.) It just means you need to know exactly what you're getting out of the deal, comparing it to industry standards.

What are the standards? According to the above expert, many authors get 8% of the list price (which would be about 16% of the net) for sales of the first 150,000 copies and 10% for copies sold above 150,000 (about 20% of the net).

A change in the wording of one, brief sentence in a writer's contract could easily have you making twice as much income from a book. So know what you're getting into!