Part I: Wiley Raises Chocolate Ration to 25gm
The kindergarten-recess spat over Wiley's deceptive rights grab continues... and Wiley is probably awfully happy that the AG isn't even attacking the more-disturbing change. The AG issued a surreply to Wiley's reply, narrowing the focus to royalties earned — a rhetorical victory for Wiley. Now Wiley claims that the real advantage to authors is in the definition of deep discount, and that that's where things go to the authors' advantage. Of course, a bit of math demonstrates that Wiley is still talking out of its ass. PW this morning asserts (without quoting the entire sur-surreply from Wiley) that Wiley now says:
Regarding authors with a list price royalty arrangement, Wiley explained that in the existing agreements, those royalty rates are lowered for discounts greater than 50%. “For most of the financial books involved here, the average discount rate is higher than 50%. Therefore, we believe the authors will benefit with the proposed, simplified Wiley terms,” Wiley said.
Well, now, let's just see what that means, based on some typical contract numbers, shall we?
| List Price Basis |
Net Receipts Basis |
|
|---|---|---|
| List Price | $34.95 | |
| Full Royalty Rate | 10% | |
| Royalty Rate at Discount |
5% | |
| Discount Trigger | 50% | 56% |
| Royalty Earned at 52% Discount (chain store) |
$1.7475/copy | $1.6776/copy |
| Royalty Earned at 60% Discount (online vendor) |
$1.7475/copy | $0.6990/copy |
Oops. It looks like the "simplified" net receipts calculation cuts the per-copy royalty earned with real numbers under even Wiley's overoptimistic scenario. And those royalty rates were inferred from real contracts, not pulled out of thin air. Hint to people with MBAs: Even with your lack of mathematical numeracy (such as a basic course in number theory... ok, it's not so "basic," but still...), you should try running the numbers for your proposal before extolling your magic formulae as beneficial to everyone, because somebody else will.
Meanwhile, the AG continues to neglect the POD/OOP rights grab, demonstrating — perhaps more than any other aspect of this little contretemps — that the AG does not adequately represent all authors. The right to revert a book is more valuable in serious and professional nonfiction than it is in fiction, in the median instance (if only to avoid later problems with a second/later edition!), but the AG has ignored this aspect of Wiley's "proposal" after its initial objection.
So, then, what should authors do if confronted with Wiley's proposal (or a similar one resulting from another publishing consolidation that the DoJ and FTC will no doubt refuse to examine for antitrust implications)? Four things:
- Don't sign anything "acknowledging" a change of any kind until you consult your agent and/or counsel experienced with publishing contracts.
- If there is any change of any kind to any financial terms, run the numbers. And that means for a variety of circumstances, too; although that table above is simplified, you can't make an intelligent decision on what a change to a bargained-for term will do to your bottom line by assuming that the scenario presented in the proposed amendment represents the only, or even most likely, circumstance.
- Ask questions. If the change is not crystal-clear (e.g., "We're changing from a March/September to a June/December royalty accounting period; your first royalty statement will cover only the three-month period from October through December 2010"), demand that your editor explain things. And if you haven't been assigned an editor, call editorial anyway: I can virtually guarantee that you won't get a straight answer by directly contacting the business side of the publisher (just an observation after watching this bloody industry for nearly three bloody decades).
- Don't be afraid to send back a letter that accepts the acceptable changes and explicitly rejects the others. Contrary to what the publisher may try to claim, unless your underlying contract gives the publisher the unilateral right to impose substantive changes to the contract (not at all ordinary, and see point 1 above), they can't shoot you unless you agree to wear the blindfold and accept that last cigarette.
If you're proposing any change at all, do it on your letterhead in your words... so that no flunky three years from now just glances to see that the 06 May 2010 letter appears in your file and assumes that it doesn't have any strikeouts or other changes on it. This is based on a sadly cynical, but validated by experience, view of the administrative competence (or lack thereof) in the publishing industry even more than it is on the meme that only lawyers should exchange copies with strikeouts, and that everyone else should use clean documents.