We haven’t talked much about contracts in the past. Why not? Well, we’re not lawyers and we’re not agents, so our experience with contracts has been as parties to them. But there are things we can still offer without delving into the baffling legalese.

So we offer them: we talk about how we approach contracts, how we value ourselves when entering into a contract negotiation, and what sorts of resources we have. We talk about some terminology, some of the clauses to review, and the incentives in front of the publisher and the author.

Note! Any advice you hear from us must be qualified based on your situation — your publisher, your agent, your market — and especially based on when you’re listening to this ‘cast. If it’s not 2013 right now, the odds are pretty good we’re wrong.

Audio Note: Yes, there’s a long lead-in there. Jordo will fix it eventually, I’m sure.

Profanym of the Week: “Schick a Brit.”

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Transcript

As transcribed by Mike Barker

Key Points: You are in a business, and you need to be aware of what is in your contracts. Remember that you have bargaining ground, because the publisher wants your work. You do not actually sell your book, you sell licensing rights to print the book in a specific format and market. First, check the reversion of rights clause! Watch for “term of copyright” which says the publisher owns your book for the life of the copyright. This may be okay IF the reversion clause is good. Make sure that you are only selling the rights you want to sell them. Grant of rights should not claim everything forever. It should be reasonably delimited. Come back later for more on the mysteries of contracts, and always remember to schick your Brit.

[Mary] Season eight, episode 28.
[Typing noises, followed by long silence]
[Brandon] Good?
[Mary] Yeah.
[Brandon] This is Writing Excuses, Your First Contract.
[Howard] 15 minutes long.
[Mary] Because you’re in a hurry.
[Dan] And we’re not that smart.
[Brandon] I’m Brandon.
[Dan] I’m Dan.
[Mary] I’m Mary.
[Howard] I’m Howard.

[Brandon] This is not actually us giving you a contract. So stop jumping up and down.
[Dan] Sorry. [Inaudible]
[Brandon] We’re not going to send you any money. In fact, we want you to send us money. But we are going to talk about contracts. We haven’t talked about them a lot. We’ve [mentioned?] them a few times. But I remember getting my first contract and just being baffled by the thing. There’s so much legalese in it, it’s so weird, you’re so excited. You’ve got this thing and you just want to sign it. Like you… Even if you have an agent telling you no or whether you’re self-publishing it or whatever you’re doing… You’re self-promoting it or anything… You get a contract and someone wants to give you money. You just want to say, “YES! Yes, someone’s offering me money.” But what we want to get across to you is that you are in a business. You are a small business owner, and when you are working in contracts, you should be aware of your contract, even if you have an agent guiding you. Your job is to know what’s in this contract. Then have your agent advise you, rather than you just saying, “Yes,” and signing everything. Which is actually what I now do these days. But…
[Mary] Part of that is because with your first contract, you do not yet know whether or not your agent is going to be any good at what they do.
[Brandon] Most of the ones that I sign are the foreign ones where I’m like, “Yes. We’ve been with this publisher four times. Just say yes.” But it is very important in these and it can be very baffling. But we just want to go down and talk about some of the things that are unique to book contracts, and we’re going to talk about short stories. We’re going to talk about book contracts. We’re going to talk about if someone comes and wants to do subsidiary rights for one of your books.
[Howard] License some of your stuff.

[Brandon] License something… Some of your stuff. Some of the pitfalls to avoid and some of the things you can ask for. Now, I want to start this off by mentioning that you feel like, as a new writer… I at least felt like I had nothing to bargain with. I had no ground to stand on. I had nothing. But I once heard an author… I can’t remember who this was, it was pretty recent on a panel, say, “Look. Without you, publishers don’t exist.” Right? They have come to you. That gives you immediate bargaining ground. It may not be fantastic bargaining ground, but you can say, “No,” and walk away. They need authors to say yes. They need new authors. They have come to you. Theoretically. Well, you’ve gone to them and they’ve come back to you and said, “Yes, here.” You do have some ground to bargain with. You should be bargaining. You shouldn’t just take the first contract offered you, because they’re always going to be bad. Okay?
[Mary] Yes.
[Dan] Well, let’s say less than optimal.

[Brandon] Less than optimal. They may not be a terrible contract, but they may be less than optimal. So when I would get the contract… You know your first inclination is going to be to check the money and things like that. I would actually suggest the first thing that you check is the reversion of rights clause.
[Mary] So the reversion of rights clause is basically how you get your rights back if things go yucky. If the publisher is printing your book and the money keeps rolling in, and they are doing well by you, then letting them keep the rights is lovely. But, if they stop printing your book, you want the book back so that you can try to sell it to someone else. This also goes for short stories as well. So what you’re looking for is language that allows you to take the rights back.
[Howard] It especially goes for electronic versions, because increasingly, publishers are recognizing that, “Well, if we keep it in Amazon, technically it’s still published, based on this old wording or this new wording we’re using.” You as the author… If the book is not making any money through the publisher, through Amazon, you as the author want the ability to revert those rights back to you, put the PDF, put the MOBI, whatever, put it up on your website and start collecting all the money yourself.
[Mary] I actually want to back up a little bit.
[Brandon] Okay. Go for it.
[Mary] Because I realized we just jumped straight into jargon.
[Howard] Yes, we did. Sorry.
[Mary] No, it’s fine. I realize that there’s a couple of things that I didn’t know when I was starting out.
[Brandon] Go for it.
[Mary] One of them is that you talk about, “Oh, I sold my book.” No. What you’ve actually sold… You retain the copyright to your book. What you have sold is the licensing rights to the publisher to print that book in a specific format. The contract…
[Dan] And in a specific market.
[Mary] And in a specific market. The contract delineates which rights you have sold to them. The book itself you still own. A lot of contracts today will say that you are selling them this license for what they call term of copyright which means the entire time that book is in copyright, they control those rights.
[Brandon] They are trying to slip those into contracts. Mary’s saying that a lot of them are doing that. They shouldn’t be, right? We are very against life of copyright…
[Mary] Actually, term of copyright is okay…
[Howard] Provided the reversion clause is good.
[Mary] Provided… Yes. As long as there is a reversion clause, the term of copyright is not necessarily a red flag. It is of course nicer if they say it is for this long and then if we want to renew your license, we will give you more money, because we always like it when they give us more money.

[Brandon] But what you’ve gotta realize is that once upon a time, this was actually kind of a no-brainer for the publishers. They wouldn’t keep ahold of it. For instance, the old contracts would say… I’m just looking up an old sample contract that says, “As long as there’s like 250 copies being sold in a six-month period that stay… The publisher keeps it in print, and this keeps on going. The thing about that is, in order to sell 250 copies, you have to have good distribution, the book’s still got to be out there. It doesn’t sound like a whole lot of copies, but that’s enou… They have to be distributing the book to get 250. At the point where they’re only selling 250 in a six-month period, it’s no longer worth their money to be warehousing it, to be distributing this, to be doing all this. So it’s a no-brainer to think, “All right, you can have it back.” Because we’re not going to go through all this money of warehousing all this in order to distribute a book that is not selling very many copies. However, selling 200 copies every six months in e-book is simply an extra… What, $2000? Maybe not that much. 1000 bucks to the publisher. If they have 100,000 of these books out there, then that’s a huge amount of money. They… At that point…
[Mary] For no material costs for them.
[Brandon] For no material cost. No warehousing, no marketing, no distribution, no returns. Suddenly, it becomes a very keen business decision to keep ahold of anything that’s even selling a couple of copies because by sheer massive weight of publishing… If you publish 1000 books a year, you’re eventually going to be at this big weight of these even if they’re only selling a few copies. So they have no reason to want to give it back to you. As in the old days, they’re like, “Yeah, we can’t do anything with this. Of course you can have it back.” Now… So this has become a big battleground, where it used to be not much of one at all.

[Howard] Casting that in slightly different terms, it used to be that an author’s back catalog began to become expensive to the publisher to maintain. It has… That has flipped. It is now not expensive to maintain an author’s back catalog, and if a publisher has enough of those back catalogs, they can make real money. But we as authors can also make real money off of our back catalogs. If the publisher is not marketing it…
[Brandon] Yes. That’s the thing.
[Howard] But we are willing to, then…
[Brandon] Right. You could maybe make those 200 copies into 500 copies or more. It’s not worth the publisher’s money to do that. So, anyway, this is a battleground.
[Mary] One thing is that this is something to talk about with your agent when you get the book, because one of the other things about this is that any advice that we give you will change depending on the size of the publisher that you’re going with and when we give… When you are listening to this podcast, because things may… Are certainly going to change. If you’re listening to this…
[Howard] If it’s not 2013 and you’re listening to this podcast…
[Mary] We may be completely wrong right now.

[Brandon] We should actually give the disclaimer. People often say this. We aren’t attorneys. We’re not trying to give you legal advice. What we’re saying is look at this clause. Then go find an attorney or an agent…
[Mary] An agent.
[Brandon] And say, “We need to look and make sure that this clause is here for my advantage.” If you don’t get that in there, this is what could potentially happen. We just want to make you aware.
[Howard] The two key dangers of looking at a contract without the help of an agent. Danger number one is when you don’t know what something means and you are afraid to ask questions. Danger number two is when you think you know what something means and you don’t.
[Brandon] I will mention IP attorneys do work… You can go to an IP attorney, intellectual property attorney, and you can pay them on a billable hour basis to look at a contract and give you advice on it. If you are one that doesn’t want to work with an agent.
[Mary] But specifically when you are looking at them, make sure that they are someone who handles literary, because…
[Brandon] Film is a very different world.
[Mary] Very different, very different world. There are some things in literary contracts that are standard terms of art or literary that will make a lawyer in any other field completely shit a brick. Sorry.
[Brandon] Uh-oh. Clean rating, clean rating.
[Dan] Oh, man.
[Brandon] All right. Let’s…
[Mary] That’s a technical term.
[Howard] Completely bleep a brick.
[Brandon] Yes it is. Let’s go ahead and…
[Mary] I said it in an SFWA meeting. It should be fine.

[Brandon] Book of the week?
[Mary] The book of the week is actually mine, which does not include such language. It’s Without a Summer, which is the third book in my series, of the Glamorous Histories. I recorded the audio myself, so I’m somewhat biased. This is basically taking place in the year 1816, which is historically called the year without a summer. That’s because we had a volcano go off and worldwide climate drop, to the point that there was snow in Washington DC in July. So basically, you have really unseasonable weather, and people blaming the magicians for it, the glamorists, when it is not their fault. International intrigue, romance, and shenanigans.
[Howard] And no bricks?
[Mary] And no bricks.
[Howard] Well, the ones that the buildings are made of.
[Mary] Actually, someone does get hit with a brick, but there’s no passage of the bricks.
[Laughter]
[Howard] Okay.
[Dan] But it’s only hit a brick.
[Mary] Hit a brick! That’s what I said.
[Dan] It’s just one letter shorter.
[Mary] Yes.
[Brandon] From editing.
[Mary] She’s hit a brick is what I said before.
[Howard] We’re sure of that. Audiblepodcast.com/excuse. Start a 30 day free trial membership and get a copy of Without a Summer by Mary Robinette Kowal absolutely free by launching this membership, and it will be awesome.

[Brandon] All right. Let’s get back to contracts. Howard, you sold licensing rights to do a board game.
[Howard] To do a board game. I did. The contract for that was similar to a publishing contract, in that what I was selling… I was not selling Living World Games Schlock Mercenary. What I was selling them was the rights to publish a game that they created using artwork that I created in a specific format in a specific set of markets, for an unlimited duration. They’ve got the copyright to the game design. The terms of that were I’m getting 10% of the gross sales.
[Brandon] Okay. So just like a book. Which is how most novels work is… Cover price, you get a certain percentage. E-books are different [inaudible] print editions.
[Howard] Yeah. We ran a Kickstarter on that, and my agreement with them on the Kickstarter was whatever the Kickstarter brings in is the gross, and I’m taking 10% of that. Then I talked to my colorist. I have a standing agreement with my colorist that outside of certain things, if we’re doing merchandise, if I do line art and hand it to him to color, I am going to give him 50% on that merch. Because of that contract, I talked to him and said, “Hey, you know what, Travis? You know what would be fair is if you get half of what I get for this boardgame, because I do not have the time to color this, and I do not have the time to pay you up front to color this. Are you willing to work for the royalty?” He was game. So we each made, off the Kickstarter, we each made about 5000 bucks. Which is not fantastic money. The game is now out there on the market and…
[Brandon] Everyone should play it.
[Howard] Everyone should play it and buy a copy because it’s wonderful, good fun.

[Brandon] What if someone were to come to someone… If a publisher came to someone, one of our listeners, and were wanting to do something like this… Are there any pieces of advice you could give?
[Howard] Advice number one is to make sure that… If you’re not working with a literary publisher, if you’re not working with a traditional book contract, if you’re working with somebody who’s trying to make some sort of merchandise, you need to make sure that you are only selling them the rights that you think you are selling them. This game publisher, I was not selling them boardgame rights to Schlock Mercenary. I was selling them the right to use Schlock Mercenary names and artwork as defined later in the contract as attached to this game they had written. Which means that if I want to make a boardgame myself…
[Brandon] You can still do it.
[Howard] With my own rules, I can still do that. If I want to make a role-playing game, I can still do that. I did not sell them universal game rights. Now, because of that contract, they retained rights to that game, and one of the things in that contract said, “Well, if somebody wanted to make a video game out of this boardgame, this contract is in force and I get 10% of whatever Living World gets as they sell this to the videogame company.” So, yes, make sure you are only selling them what you want to sell them.
[Brandon] You know, I like this. I like actually getting more specific, because a lot of the licensing deals we’ve done have not been specific. I think it’s… Like… I’m fine with it, but I licensed the jewelry for Mistborn and things. It wasn’t licensing these specific products, it’s like a license you can create jewelry on this and no one else can is what we’ve done. I like the jewelry people, they do a good job, but
[Howard] Giving somebody an exclusive… The thing to bear in mind, if you’ve got a property that’s hot, and you give somebody the right to make a merch… Make some sort of merchandise. That has value to them. If you give them the right to make exclusive merchandise, you should ask for more money. Because what you are then telling them is, I’m giving you the whole market. I’m not letting anybody compete with you. If I want to make money, I have to advertise your services. So it’s worth more to them.

[Mary] I actually have two contracts that cover the same grant of rights. One of which I did not sign.
[Howard] Oh, cool.
[Brandon] Let’s read those, and actually, after that I think I’ll end this podcast, saying we’re going to come back to this because there’s so much more to talk about contracts.
[Mary] Okay. So this is grant of rights.

Author hereby grants to publisher the exclusive right to publish the work as a part of the book, including the irrevocable right to print, publish, and distribute and to cause others to print, publish, and distribute one or more editions of the book in any and all media now known or developed in the future, in all formats of electronic, magnetic, digital, laser, and optical-based media, in any and all languages throughout the world, and in connection with the advertising and promotion of all the foregoing.

I was like, “And no. Under no circumstances.”
[Howard] I’d schick a Brit.
[Laughter]
[Howard] I’m sorry. I’d shave an Englishman.
[Mary] Yes. So.
[Brandon] Can we throw something at him? Here’s a pen.
[Mary] It was okay when I said it… Or, it wasn’t. But, yeah, I was like, so there’s a number of problems with that. First of all is that they were wanting to pay me five cents a word for a short story for exclusive rights, which means that I could not… Exclusive and irrevocable rights, which meant that I could not resell this to a reprint market. It meant that I couldn’t…
[Brandon] Sell translation.
[Mary] Sell translation. I couldn’t put it in my own collection… A collection of my own short stories.
[Howard] No audio rights.
[Mary] No audio rights. I couldn’t post it on my website. I could do nothing with that story. They were going to completely lock it down.
[Brandon] Yeah. Like [inaudible]
[Howard] Irrevocable?
[Mary] Irrevocable.
[Howard] Irrevocable is a horrible, horrible word.
[Mary] Yes.
[Brandon] Yeah. It’s like, if the people who put together the big anthologies that go to like a million schoolchildren every year came to you and said, “We want to put yours as our science fiction or fantasy story…” Tough luck.

[Mary] Now this one, I signed, and they were paying me more.

The author grants to the publisher the nonexclusive right to print, publish, distribute, sell and generally exploit the work or authorize others to do so as part of an anthology throughout the world in the following editions: hardcover, trade paperback, mass-market, book club, foreign language, audio, periodical, e-book, and enhanced e-book.

Nothing about everything known and in the future…
[Howard] Magnetic, digital, chronological, gravitational…
[Brandon] Brain beam.
[Mary] Yes. Then I also granted them the nonexclusive right to sell the work in physical or digital form for to distribute the work in a digital form at no charge for purposes of publicity, which is fine by me.
[Brandon] Now, a novel, you are never going to give nonexclusive. You’re never going to give… Novels are always going to be exclusive. Almost always.
[Mary] So the problem with the exclusive rights to have everything is really a short story issue.
[Brandon] But you can… That’s why we have the reversion of rights.
[Howard] Even with a novel, you’re not going to be granting irrevocable, exclusive, worldwide, all media rights out of the gate.
[Mary] They will try to get it from you.
[Howard] They will try to get that.
[Mary] Know that you do not have to grant it to them.
[Brandon] All right. This has gone way longer than I expected, but I guess this means we have lots of interesting things to say. Assuming anyone’s still listening [inaudible]. Otherwise, they’ve wandered off. But our writing prompt is going to Howard.

[Howard] I want you to write, as part of whatever story you’re working on, a contract that is horrible and magical in nature.
[Brandon] Sweet. What a great prompt. That’s way better than mine last week. I’m jealous. This has been Writing Excuses. You’re out of excuses, because your writing prompt is awesome.