Q&A: Textbook succession planning–What is a reasonable royalty rate for the original author?
Q: “What is a reasonable royalty rate for an author whose name will remain on a (successful) textbook, but who wants to stop doing the revisions? What sort of language in the revisions clause can protect your heirs?”
A: Zick Rubin, Attorney, Archstone Law Group P. C.:
“This is a very important item. Here is a formula that is sometimes proposed by authors and that is sometimes acceptable to publishers for a successful textbook: 75 percent of the royalties (i.e., the contractual rate) in the first edition in which the author does not take part, 50 percent of the royalties for the second such edition, and 25 percent of the royalties for the third and subsequent such editions.
This can be an actively negotiated item on both sides. The negotiations reflect a number of factors, including:
- How successful and established is the book?
- How valuable will it be for the publisher to continue listing the original author as ‘author’?
- What would be fair and attractive royalties to attract an excellent new author or authors to take over the book? (the publisher will typically be reluctant to expand the total royalty pot)
- Will the initial author play any continuing role as a consultant or in marketing?”
A: Kevin Patton, author of Anatomy & Physiology:
“When researching a succession agreement between myself and a coauthor, Richard’s formula of ’50 percent, 25 percent and out’ was by far the most common type of formula that I ran across.
I think the continued use of your name does pose some potential risks, which I’d never really fully considered before seeing it on the listserv here. Not only that, but will you have any input into the selection of a succeeding coauthor? A wrong move there could be disastrous, I would imagine.”