However, the provisions in a book publishing contract that deal with the author's share of such income are often overlooked during the negotiation with the publisher, the author believing that such provisions are "standard." In nearly a quarter of a century of deal making, I have no idea what that term "standard" means since all authors and all books as well as all creativity are different and unique. The power to make a deal and to change clauses depends primarily upon 2 factors: the skill of the negotiator as well as the marketing clout of the creator.
How the publisher-author agreement handles the author's share of a club deal may vary.
However, this rate is not always that simple and certainly not carved into stone. And while the author's attempt to negotiate changes may often be met with a response such as "this is standard," the author should be aware that there are some areas of possible change available.
The author can bargain for more than the one-half rate, asking to be paid 60% or more of the author's normal trade royalty rate. While the publisher is receiving a royalty rate from the club which is less than the amount the publisher might receive in a normal trade sale, the publisher has essentially no costs attendant with that club deal. Therefore, it is entirely possible for the publisher to pass along to the author a percentage of the author's normal trade royalty greater than 50%.
The author can also negotiate in the author's deal with the publisher that if the book club deal involves an owned or controlled club, that the deal between publisher and club be made at an arms-length basis or that the author is paid as though it were. In that instance, the author would receive the higher amount of the actual deal or what the deal would have been should there have been this arms-length negotiation.
The author may also negotiate to place restrictions limiting the publisher's right to allow the author's book to be used as one of those "join up promotions" where the new members receive a large number of books for very little money. The author should be careful that the author's book not be used as one of those loss leader type books. The club benefits since it attracts members but the author does not since most often the publisher's deal with the club will provide that no payments are made to the publisher from the club on such sales. To this extent, it is also in the publisher's interest to limit such promotional sales by the club and if the author has obtained these restrictions in the author's agreement with the publisher, obviously the publisher will have to do so in its deal with the club. To the extent that any units are "given away" beyond those that are permitted by the author's agreement with the publisher, those excess units would be royalty bearing units and would be paid at the author's club rate.
The author can also negotiate for the royalty to the author to include participation in any advance obtained by the publisher for the club rights to this particular book.
On the other hand, there is another category of royalty payments in most publishing contracts. That category involves the author's participation in licensing income. Since a club deal is a license (unless the publisher is the actual club), the author can ask to define licensing income to include club deals. In such instances, the author is not paid at the one half of the trade royalty rate defined above but rather at the author's licensing participation rate. This rate is most often 50% of the income received by the publisher including advances received, but it can be higher, again depending upon the marketing clout and negotiating skills I mentioned above.
The best deals are often made by those who can afford to say "No."
© 1997 Ivan Hoffman
This article is not intended as a substitute for legal advice. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. You should consult with an attorney familiar with the issues and the laws.
No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.