In recent years multiple class action lawsuits have been filed against the biggest textbook publishers, challenging their royalty-payment practices. In 2016, it was a suit against Pearson, alleging (among other things) gray market sales to international subsidiaries, paying lower international royalty rates, and then shipping books back into the U.S. for retail sales.1 More recently, there have been suits against Cengage, challenging “Cengage Unlimited,” Cengage’s all-access, Netflix-like subscription model.2 McGraw-Hill was also sued, in January, for improper royalty payment practices on its “Connect” products.3
Your royalty statements only tell part of the story regarding the success of your textbook. Join Juli Saitz, Senior Managing Director, Ankura Consulting Group at 2pm ET on Thursday, July 23rd to understand “5 Things Your Royalty Statements Don’t Tell You“.
The goal of this next session in our TAA Summer Webinar Series is to help authors understand what information is provided by their publishers and help identify gaps in that information.
Are you confused trying to determine how your royalty statement matches your publishing agreement? Do you feel like your royalty check is less than expected? According to Juli Saitz, CPA, Senior Managing Director, Ankura Consulting Group during her recent webinar, “the devil is in the details”.
To better understand how your royalties should be calculated, there are several items you may want to look for in your contract – beyond the basic royalty figures – including clauses on: electronic derivatives, subsidiary rights, custom work, packages, and tiering.
What does the word “royalty” mean to you as an author? In their presentation, “Royalties: Past, Present, and Future” at the 31stAnnual Textbook & Academic Authoring Conference, royalty auditor Juli Saitz of Ankura Consulting Group and veteran publishing insider Sean Wakely of FlatWorld discussed the history and anticipated future of textbook author royalties.
In a traditional author-publisher relationship, the publisher is providing financial capital and the author is providing human capital for the production of a book. The negotiation of royalty on the sale of the book is used to determine how the profit from such sale is divided. Through the royalty model, there is a shared risk between author and publisher and consequently a shared reward for successful titles.
In his recent webinar, “Royalty Disputes: Legal Strategies in Pursuit of Information and Payments Due”, David Slarskey, a trial lawyer with Slarskey LLC, defined royalty accuracy as the “accurate reporting, accurate calculation, and accurate recovery of royalties due to authors.”
Slarskey proceeded to identify the following eight conditions as some of the dynamics at play that can create friction in the process of achieving royalty accuracy in publishing relationships.
In her TAA webinar, “The Anatomy of a Royalty Audit”, royalty auditor Juli Saitz, senior managing director for Ankura Consulting Group, shared the five phases of a textbook royalty audit: preparation, paperwork, communication with the publisher, document analysis, and the publisher’s response.