Publishing Contracts – The Basics

Free Resource

All book deals should have a written agreement between the publisher and illustrator (or author-illustrator) in place before any work is started on the book content.

It’s not a case of agreeing to any contract offered to you, but assessing the details of the agreement and discussing them with the publisher (negotiation is completely normal). This resource covers the basics.

Introduction

Most publishing contracts start by granting the publisher a licence, and it’s usual for the licence to be wide-ranging. The publisher usually acquires an exclusive licence to publish the work, and to sub-license others to publish the work, throughout the world for the full period of copyright.

Agreeing a price with publishers depends on certain variables – the size of the publisher, the type of the book and the territories it’ll be sold in. The fee will be informed by the type of contract you agree – and knowing what is negotiable and what isn’t is key to this process.

Some publishers won’t negotiate at all wheras many others will. This applies to both advance on royalties agreements and flat fees for books.

No publisher should mind you asking well informed questions, and it’s for you to decide if you’re happy to proceed with the commission based on the final negotiated agreement.

Rights

Rights are what the publisher is paying you for; the exclusive right to publish the artwork (plus text if relevant) in print and digital form and usually the right to sub-licence to other publishers overseas.

Foreign Rights: This allows the publisher to sell the books in different territories – World English; USA only, North America etc.

Film, TV and Digital Rights: These rights allow the publisher to sell the rights to your work for film, TV and digital projects.  Ask how the publisher has worked to date, and consider if it’s appropriate for your work in any case.

Advances

The advance is the sum paid in advance of future royalties and rights earnings, and no more will be paid until the book has earned enough to cover the money advanced. With this in mind, it should be considered in partnership with the royalties.

The advance must cover the time spent creating the artwork. When considering whether an offered advance is appropriate for a book deal, work out how long it may take you complete.

Is there a delivery date for final artwork?. A typical children’s picture book is 16 double page spreads plus a cover, and substantially illustrated non-fiction books can contain a significant number of images. It’s likely to be at least two or three months work, during which you’ll be creating characters and environments. How much do you think you should be earning over that period?

Advance payments for books are usually divided into three sections. Ideally this should be payment on:

  • signature of the contract
  • delivery of roughs
  • delivery and acceptance of the artwork

Royalties

A royalty is the percentage paid to the author/illustrator for each book sold and will include, for example, Home Hardback Sales, Export Sales of UK Hardback Edition, Non-Booktrade Sales and Royalty-Inclusive Sales. Royalty payments have to exceed (pay off) the advance before they are paid to the author/illustrator. When it comes to knowing what the royalty percentage is based on, there are two main areas of consideration:

Recommend Retail Price: This is the traditional model based on the price recommended by the publisher and usually printed on the book.

Net Receipts: This is the figure the publisher receives from sales after the cost of discounts (eg through bookstores or websites such as Amazon) and distribution are taken off.

An author-illustrator should expect a higher royalty percentage than an illustrator working with an author. If the royalty is 10% for a book the author/illustrator should receive all of that 10%. If solely illustrating the book the illustrator would receive half that percentage – 5%.

Royalty payments on the Recommended Retail Price range from 9–10% to the author/illustrator (half that for solely illustrator). If royalties are based on Net receipts the percentage should be higher.

Warranty and Indemnity

Warranties state that the illustrator guarantees the work is original and will not infringe anyone else’s work. The illustrator will be expected to indemnify (compensate) the publisher for any breach of this warranty.

Cancellation and Rejection

If the author/illustrator, either as a team or as a single person, originates the book and presents it to a publisher for consideration you would not expect to find a requirement for approval of the illustrations or text, nor a rejection fee proviso.

If the publisher has commissioned the book they may well want to approve the illustrations (or text) and have the right to ask for changes. In this case you may find there is a set rejection fee, or an arrangement that in the event of rejection the final part of the advance is not paid. As the illustrator you need to be satisfied that the rejection fee is high enough.

Subsidiary Rights

These rights will include Translation Rights, USA Edition, Paperback Editions, Book Club Rights, Strip Cartoon, Electronic Version Rights and Merchandising Rights amongst others.

Rights payments range from 50–90% to the author/illustrator (half that for solely illustrator), the Subsidiary Rights are a lump sum paid for the right to use the author/illustrator’s work in some way.

Undertaking To Publish

Having acquired the right to publish the book, the publisher must guarantee in writing to publish it, usually within 12/18 months of delivery of the manuscript and/or artwork. This protects against the publisher sitting on the rights and not exploiting them.

Delivery

There’ll be a provision in the agreement for a delivery date. The illustrator should make sure that this is realistic and allows enough contingency time should it be required.

Competing Works

This clause is there to limit the illustrator from being part of a future publication that the publisher may consider has ‘a negative impact’ on sales of the book. Ideally Competing Works clauses should be struck out as it limits the illustrator’s trade.

Option on future work

It is not recommended that a publisher has the option on your next book, unless that book is featuring the same characters and/or is part of a pre-agreed series. Agreeing to this clause can potentially limit your options.

Termination and reversion

On termination of an agreement, the rights should revert to the creator to allow them to exploit the rights should they wish to.

Publishing contracts often have a termination clause which states that rights remain with the publisher if the book is available ‘in print’ in any format, including e-books and Print On Demand (POD). E-books and POD are easily made available, and could be selling in very small numbers.

So, it makes sense that a termination clause should include what number of sales make the book still ‘in print’ as an e-book or POD, to ensure rights can revert to the creator if the book is no longer being promoted by the publisher and sales are very low.

If you want more information, an in depth resource on Negotiating Contracts with Publishers is available for AOI Members.

AOI can advise members on their contracts. Email us with details of the commission and publisher and any questions about the contract.

The AOI would like to make resources accessible to all members. If you would like an alternative format please ask.

 

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