The agency contract, Part IV: Show me the money

Did you think I was going to sign off on my series on contract explanation without addressing the issue most on the average agent-seeking writer’s mind? Perish the thought.

Yes, Virginia, the agency contract will specify the percentage of your advances and royalties your agent will get. And no, abiding by this is not left up to the goodness of your heart: if you are represented by an agent, your publication contract will specify that the publisher will send your checks to your agent, not directly to you. This means that any money you see will automatically have the agents’ percentage deducted from it.

Typically, in literary agencies, this percentage for is 15% for English-language North American sales. Script agents generally get 10%. In either case, the contract may either be on a yearly (or longer) basis or a per-project basis: find out which, so you are aware of the terms of renewal. If you are planning to write more than one thing, do be sure before you sign that your agent will want to represent everything you want to write.

These percentages are non-negotiable in virtually every agency on earth, so the point of examining your contract is not to gain haggling ammunition: it’s to prepare you for the day when a check arrives with fewer zeroes on it than your advance led you to expect. And no, a lower percentage does not usually mean a better deal for the author – it’s usually an indication that the agency is new, and is trying to attract high-ticket clients.

Pretty much every agency in the country takes a significantly higher cut of foreign sales: 20% or more is the norm. (For reasons I have not been able to fathom, my agency takes 23% of sales in the Baltic republics, so they’ll really score if my memoir takes off in Lithuanian.)

The higher price tag abroad is for a very practical reason: unless an agency has an outpost in a foreign country (as some of the larger agencies do) it willsubcontract their foreign rights sales to agencies in other countries, who take their cut as well. So if you suspect that your book will have a high market appeal in Turkey or Outer Mongolia, you might want to check up front whether your prospective agency has a branch there, or is subcontracting. The differential in commission percentage can be substantial.

“Um, Anne?” I hear a small, confused chorus out there piping. “Was the bit about English-language North American sales just a really complicated typo? Aren’t there other people in the world who read English — like, say, the people in England? Why aren’t all of the English-language sales lumped together, and the foreign ones together?”

Ah, because that would make sense, my friends. The industry likes to keep all of us guessing by throwing a cognitive curve ball every now and again, so this is going to require a fairly extensive and rather convolutedexplanation. Before I launch into it, you might want to pop into the kitchen and make yourself some tea, or fluff up the pillows on your ottoman. I’ll wait.

Okay, everybody comfortable? Here goes: from the point of view of your garden-variety US publisher, books published in the English language fall into three categories: those sold in North America, those sold in Great Britain, and those sold in other countries. Of the three, only those in the first category are considered English-language sales, for contractual purposes. The last two are considered foreign-language sales.

There — and you thought it wasn’t going to make sense…

So, perversely, if EXACTLY the same English-language book by a US author was sold in Canada and Great Britain, the author’s US agent would take 15% of the royalties on the first and 20% on the second. (This situation is not at all beyond belief: HARRY POTTER is, I am told sold in a slightly different form in the former Commonwealth than in the U.S. Why? Well, chips mean one thing to a kid in London and another to a kid in LA, and while apparently the industry has faith that a kid in Saskatchewan could figure that out, it despairs of the cultural translation skills of a kid in Poughkeepsie.)

This is why, in case you were curious, you will see the notation NA in industry discussions of book sales – it refers to first North American rights, minus Mexico. Rights to sell books south of the border, in any language, fall under foreign language rights, which are typically sold on a by-country basis.

However, occasionally an American publisher will try to score a sweet deal on a book expected to be a bestseller and try to get the world rights as part of the initial deal, but this generally does not work out well for the author. Why? Well, if a book is reprinted in a second language and a North American publisher owns the foreign rights, the domestic house scrapes an automatic 20% off the top of any foreign-language royalties accrued by the author. (If this seems a trifle technical, chalk it up to the rather extended struggle I had to retain my memoir’s foreign rights; back in the day, my now-gun-shy publisher wanted ‘em, big time. But they’re mine, I tell you, all mine!)

Be very wary of an agent who is not willing to offer you a written contract. Contrary to popular belief, verbal contracts may be binding (if some consideration has changed hands as a result of it, as I understand it; if you handed someone a $50 bill and the keys to your car after the two of you had discussed his painting a mural on the passenger-side door, I’m told that could be construed as a contract, even with nothing in writing), but as I MAY have pointed out, oh, 1800 times in the last 6 months, this is an industry where the power differential tends not to fall in the writer’s favor until after she is pretty darned well established. Protect yourself.

Do not assume, however, that you will ever see another copy of the contract again after you sign it. Make yourself a photocopy – yes, even before the agent has countersigned it – so you may refer to it later.

I know that this series has occasionally read as if agents are evil trolls, waiting under every bridge into Manhattan in the hope of defrauding innocent authors, but I am only trying to get you to put up your antennae when dealing with them. The vast majority of agents honestly are good people who love good writing and want to help writers – but as in every profession, not all of them are scrupulous about fulfilling their obligations toward their clients. It behooves us to be cautious.

Please, when the time comes: don’t be so flattered by an agent’s attention that you just agree to everything you are asked. That’s how good writers get hurt, and I don’t want to see it happen to you.

On to cheerier topics tomorrow, thank goodness! Keep up the good work!

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