How to negotiate the textbook royalty clause

All standard publishing contracts are enormously lopsided in favor of the publisher. In textbook contracts there is no such thing as standard royalty provisions. Having said that, a review of more than 100 TAA author contracts in my files does reveal some common “ranges.”

“Standard” ranges. The concept of “standard” royalties is less common in textbooks than trade books — so much so that it is almost counterproductive to state ranges. I am concerned that young authors may put too much stock in a so-called standard range, while more seasoned authors may find it contrary to their experience. Accordingly, view the following as indicators only, and don’t be afraid to push for royalties appropriate to your stature, leverage and revenue generation for your publisher — even outside the ranges discussed here.

Tips & tricks for negotiating your first textbook contract

The most important things to negotiate in a first contract are the amount of the advance, the royalty rate and who will control which rights, said Jeff Herman, owner of the Herman Literary Agency in New York.

Keep in mind when negotiating the advance how the publisher calculates it, Herman said: “It will tell you how far they’re willing to go.” To calculate how much of an advance it will offer, the publisher looks at the number of books it will sell during the first year and the dollar amount the author will receive per copy. For example, if the author will receive $2 per copy, and the publisher will sell 10,000 copies the first year, the author will earn $20,000 in royalties. That $20,000, he said, is the highest the publisher will be willing to go in negotiating the advance.

Negotiating the foreign sales clause in textbook contracts

If authors are not careful when negotiating language related to foreign sales in their book contracts, they can end up earning next to nothing on international sales of their books.

Stephen Gillen, an attorney with Wood Herron & Evans, said that although he cannot provide exact language authors can use to negotiate the foreign sales clause in their contracts without knowledge of the unique facts and circumstances of each case, he suggests authors use the following to start the discussion with their publisher:

How to protect yourself from lower textbook royalties from foreign sales

Textbook authors need to be alert for the possible impact on them of the practice among some U.S. textbook publishers of selling books in foreign countries using an “inter-company” transfer price.

U.S.-based publishers generally sell into overseas markets through relationships with foreign publishers based in the destination country. Books sold in this way are sold to the foreign publisher at a discounted price to compensate the foreign publisher for its role in the distribution process. In such a case, the author’s royalty is calculated on the lesser amount received by the U.S. publisher from that sale.

Information key to win-win textbook contract: Play 20 questions with your editor

When negotiating a contract with an acquisitions editor, gather as much information as you can about that person during the negotiation, said Steve Gillen, an attorney with Wood Herron & Evans.

“The more information you can gather about their interests, objectives, constraints, etc., the better armed you will be for the negotiation,” he said. “Ask the editor questions about herself to find out how close she is to reaching her new contract signings goal (and possibly earning a bonus). The higher the advance, the more attention the acquisition editor will pay to your book.”