Nightshade books has published some wonderful scifi and fantasy over the years, but they are hovering at the edge of bankruptcy. Skyhorse has stepped in to buy up their contracts and pay off their debts, but for the deal to work authors must sign onto contracts that are far more odious than what they currently adhere to. Skyhorse's response has been basically that these contracts are industry standard, which should make you run for the hills.
The Nightshade Books/Skyhorse Publishing Deal: Why I'll Take a Pass | The Passive Voice | Writers, Writing, Self-Publishing, Disruptive Innovation and the Universe
I’ve always found it useful to measure any agreement not by what someone tells me they will be doing, but what I imagine their heirs or evil twins could do with the contract terms.
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2) Physical Book Royalties: The agreement requires authors to accept a royalty rate of 10% of Net income. Net is defined as the amount of money the booksellers and distributors pay Skyhorse—usually 50% of cover price. For me this net amount is a 50% reduction in my royalty rate.
More importantly, net income is illusory. Let’s say that Skyhorse, in order to get more of my books into a store, offers a distributor or chain an extra 30% off, on the condition that they buy an extra dozen books. So, 36 copies of a $15 book pays Skyhorse $189, of which I make $18.90 as opposed to the $27 I’d make if all 36 had been sold at a normal price, or the $54 I’d make under the NSB contract.
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3) Ebook Royalties: The agreement requires me to lower my cut of ebook income from 50% to 25%. Skyhorse might have a shred of an argument if they actually had to put money into the production of the ebooks, but they don’t. That’s pure turnkey, so why do I take half of what I was getting before? That makes no sense. There’s no expense to them, so digital income is pure profit.
4) Audio and second serial rights: The agreements stipulates that I’ll grant Skyhorse audio and second serial rights to my books—rights which NSB never purchased. They want these rights for no money up front. Moreover, the clause says that the author will be consulted on the sale of same, but that “approval shall not be unreasonably denied, delayed or withheld.” Income from the sale of these rights will be split 50/50 between Skyhorse and the author.
This can lead us to an interesting situation for which there is ample precedent in the publishing world. The publisher forms a sister corporation to handle audio book production and sales. They sell a property to the sister corporation for a tiny advance and pitiful royalty. The sister company makes the money actually selling the product, and yet the publisher can say that they’re following the letter of the contract because they’re splitting all income half and half. (Harlequin just had a lawsuit dismissed against them for doing a similar thing with ebooks.)
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5) Term of Copyright: The agreement is a “term of copyright” agreement which, unless I badly misunderstand SFWA’s complaints about the Random House HYDRA contract, was a sticking point there.
6) Reversion Clauses: Reversion clauses allow an author to request a return of all rights granted if, after two years from the date of publication, the book goes out of print. Out of print is defined as fewer than 100 copies sold per annum for a physical book, and less than 100 copies sold for a digital book in a twelve month period. The publisher has six months to reprint the book, and has 90 days to kick the rights back if they choose not to go to press.
Here’s the problem with this wording in the case of digital books: How do you “reprint” an ebook? You can’t, so applying the print standard to an ebook is complete nonsense.