Business Musings: Agent Agreements (Contracts/Dealbreakers)

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We’re almost to the end of the contracts/dealbreakers series. I can’t tell you how pleased I am about this, because I feel dirty just looking at some of these contracts and agreements.

Most of you indie writers tuned this series out long ago, because you believed it didn’t apply to you. And yet, I read all the time about indie writers who sign with an agent to sell the print versions of an ebook and to sell foreign rights and auxiliary rights.

Bad move. Really, really, really bad move.

First, you’re signing traditional publishing contracts if you sell your paper book rights. You’re also signing traditional publishing contracts if you sell foreign rights. And I’m not even going into Hollywood options or movie deals or TV deals—

Except to tell you one thing. A writer I know forwarded a shopping agreement to me and Dean a few years ago, as proof that her agent was doing a good job.

A shopping agreement is an agreement that a writer will make with another person, often a producer, to shop the work (whatever it is) to film, TV, movies. Essentially, what that person wants is an exclusive to see if they can make a deal that will result in an option or an actual movie/TV deal. Generally, no rights change hands. There’s not even a promise of rights changing hands. Just a short period of exclusivity where this person shops the project around, in exchange for the possibility that they would be attached to the project.

Whenever I negotiate a shopping agreement, I make sure I get paid for said agreement. If someone wants to be the only person representing a project to potential buyers, that someone needs to pay for that privilege. And lots of people do pay. I won’t work with those who won’t pay even a token amount. That’s a sign, and one I don’t like much at all.

Okay…so back to this professional writer, trying to prove the worth of her agent, and the shopping agreement the agent negotiated with a third party.

Think about that for a moment: this writer hired an agent to represent all rights in the book, including movie and TV rights, and the agent had the writer sign a shopping agreement with a third party. Right there, that’s suspect. Because the agent should already have representatives from the agency (or a partner company) shopping the property.

This shopping agreement had no termination date, allowed the third party to shop the book to anyone who might make a film, a game, anything that moved, in technology developed or not yet developed, in territories around the world and the universe in perpetuity. For the duration of the agreement, the third party and the agent controlled all of those subsidiary rights in the project.

And the kicker? No money exchanged hands. The writer lost control of all subsidiary rights in her book project for no money and no reason, in perpetuity. All because her agent told her to sign the damn agreement. And the writer did.

And then she sent it to us as an example of the agent doing a good job.

I know, I know, you’re thinking scam agent.

Nope. “Very good,” “very reputable,” boutique agency. Long-time agent.

(Please note, despite what the agent said last week in the comments, every example I have ever used in these agent posts comes from reputable boutique and big-name agencies.)

I must tell you. That agent did a good job—for herself and her friend in Hollywood. Terrible job for her client. Awful. Horrid. Disgusting.

One of the (many) agents I fired, back when I believed the myth that you needed an agent, gave a free option to a very famous actor on one of my works. This actor had contacted me directly, and stupidly, I put the agent on the job, thinking she would negotiate a good option deal for me. Nope. She gave him a verbal option, free, for two years. No paper agreement at all.

Verbal agreements are binding in California, where he was calling from.

She’s still working. She’s got many clients, many of whom you’ve heard of. She works for an agency that represents some of the biggest writers in the business.

But, even after hearing these commonly occurring agent horror stories,  you indie writers still want an agent to represent your subsidiary rights. Okay. Fine. Let’s go with that.

And along the way, you traditional-only and hybrid writers, you should pay attention as well.

Last week, we discussed the case mystery writer Martha Grimes won against the Peter Lampack agency. I got corrected on one point in that case. The case is binding in New York and California. I missed the California part. But so far, not anywhere else.

Still, that case put the fear of God and the law in a bunch of agents, so they decided they needed more than a clause in the traditional publishing contract to protect their interests. At that point, most major agencies made certain they had a contract with their writers, governing the relationship. Before that, many agencies worked on (I kid you not) a handshake.

At first glance, these agent agreements, as they’re called, seem pretty benign. Most are no more than 3 pages long, and seem to be written in English. In fact, most of them are written in chatty language, usually in the form of a “letter,” so the writer thinks they’re signing something informal, when really, they’re signing a contract.

The worst one I’ve seen comes from a huge, very famous agency, whose chairman (and lead agent) apparently figured he could save money on legal fees, and cobbled an agreement together himself.

It looked like it was made of spit and glue, and had many unenforceable clauses. I’m sure it’s been revised since by lawyers, because I know two writers who challenged the thing in court.

But the version I have gave the agency 15% of the copyright in every project the agency represented. It said so flat out in the agreement. (I’m sure the updated version says the same thing, as well. I’m sure it says all the same things, except in better legalese.)

The agency also decided to cover its tushy by adding some version of this:

The writer agrees to follow any agent clause in a publishing contract to the letter.

In other words, that agent clause in your traditional publishing contract, the clause we discussed last week, the clause stuffed full of things that benefit the agent? Well, if you had no agreement like this with your agent, that clause is toothless.

If you have an agreement saying you will abide by the clause in that traditional publishing contract, then suddenly the clause has teeth. And so does every version of that clause you signed from the beginning of your relationship with the agent.

Many agency agreements have a point that says the writer must agree to abide by the agent clause in a publishing contract. Such points have become the norm. Now, let’s look at more norms.

The agreement I have before me, from a long-time agency, founded by one of the big name agents of the mid-20th century, has an agency agreement that looks like the chatty letter-type agreements I saw in the 1980s.

Until you read it.

And then you find clauses like this (the emphasis in bold is mine):

You hereby irrevocably assign to us and we shall be entitled to retain a sum equal to fifteen (15%) percent of all gross monies and other considerations paid to you or on your behalf with respect to any and all contracts negotiated and concluded under the terms of this agreement…

Well, you can delete the word “irrevocably” and the clause isn’t that bad, right? If they negotiated something, then they’re entitled to their percentage, right?

Um, the clause doesn’t stand by itself. Combine it with this baby:

This agreement is effective immediately and continues in effect until terminated by either party…We will continue to function as your agent and to receive our commission on all contracts negotiated and concluded during the term of this agreement, or within six (6) months following termination, if negotiations were commenced during the term hereof, and any modifications, replacements, extensions, and supplements of such contracts regardless of when made or by whom negotiated or when payments were received

So imagine this: you fire the agency because they screwed up your negotiation. Say, maybe, they tried to give a free option to a big name actor, or something stupid like that.

You do the negotiating yourself on the deal (with a lawyer back-stopping you), get a movie option for six figures, that’s then made into a film for seven figures, plus the book the movie is founded on stays in print, and becomes a bestseller, and you renegotiate the contract and, according to this stupid agreement, you still have to pay the fuck-up agent her 15%. The agent you fired because she was bad at negotiating.

(So, my friends, are you, if you sign anything like this.)

I’m hoping that those of you who signed agreements like this didn’t then turn around and sign with another agency. Because that means you would owe 15% to Fired Agency and another 15% to Brand New Agency. Now you’re out 30% of your earnings on this project for the life of the project, all because you thought hiring an attorney to negotiate for you for a one-time fee would be too expensive.

Holy crap, folks. Seriously.

And then there are you indie writers who are so smart. You’ve hired an agent to sell your print rights only (and the subsidiary rights). You’ve “retained” your ebook rights, haven’t you?

I put “retained” in quotes for a reason, because let’s go to one of those agency agreements that “allow” self-publishing.

Remember, these agreements—or contracts, which is what they really are—must be seen as one complete document. Each clause builds on the other clauses in the agreement.

So, this particular agreement with another Very Big Name Agency, starts like this:

This is to confirm our understanding under which you appoint [Very Big Name Agency] in the person of [Very Famous Agent] (hereafter “us” or “The Agency”), your sole and exclusive literary agent throughout the world to counsel and advise you professionally and to negotiate the terms and conditions for the publication, lease, license, sale, and any other disposition of material created by you (the “Work) in all media.

It goes on to describe the Work in the broadest terms possible, taking that Work out of the realm of book manuscript and into every other right you can think of.

Okay…I hear some of you thinking, yeah, that’s what you hire an agent for. To “counsel and advise” as well as to “negotiate the terms”…

(Hmmm. Kris pauses here, goes to the Very Big Name Agency’s website to see if they have a legal department with actual lawyers on staff. And after a quick scan, it doesn’t appear that they do. Which is what I remembered from way back when. Heh. So they’re signing an agreement with writers, saying they will act as lawyers, when they’re not lawyers.

(Well, well, well. Draw what conclusions you may. I know the one I just drew.)

Anyway, this agreement you’re thinking of signing with this agency has a clause that says it includes special permissions detailed in the “addendum” attached to this agreement.

The addendum is another chatty letter. And it says:

It is agreed and understood that some of your book-length work may be best suited to self-publishing, and if we together agree in good faith that a Work should be self-published, the agency shall not commission income earned directly from such self-published work, unless previously agreed to.

Okay, ick. The condescension drips. The agency says you can put your terrible unsalable books up as self-published work, after they decided they can’t do anything with them. And the agent won’t ask for money earned directly from that work, even if it sells well. But what about indirectly? And what does that all mean?

I’m already asking questions, and the stupid clause isn’t done yet.

The Agency shall act as Agent for all subsidiary rights in the Work (including but not limited to) theatrical, television and film, translation, audio, and other subsidiary rights and income from such sales, shall be commissionable by us.

Okay, this tortured language has more wiggle room in it than I’ve seen in a while. In essence, they still represent the book in all subsidiary rights—and other rights, because of that lovely parenthetical phrase “including but not limited to.” And if the writer sells this book anywhere on their own, all income from that work “shall be commissionable by us.”

The agency will get their 15% if the writer sells it or they do, even though they gave the writer “permission” to self-publish.

Because, you see, the writer agreed in the very first paragraph of the original agreement to let this agency exclusively “counsel and advise professionally.”

Folks, the point of this thing is to make the writer consult with the agent on every single project the writer finishes, so the agent has a record of that consultation and that work, and should that self-published work make the writer money, the agent can reach around sideways and put their grubby paws on at least 15% of that money.

However, this lovely clause gets worse.

It adds this:

This provision applies to other Works self-published before our association began as well as to self-published works created after our association began.

Do I really need to point out why that sentence is bad?

Writers sign this crap all the time. And what’s worse, they think they’ve “retained” the right to self-publish their stuff. They think that they can negotiate their own deals on some things, and not on others, and that on the self-published books, they won’t have to pay their agent a dime.

Even worse, every writer I know who has signed an agreement like this has done so without consulting an attorney. An attorney would eat these agreements for breakfast. A good attorney would advise a client to renegotiate this agreement at worst and not sign it ever at best.

These things are awful.

And yet, writers think they’re doing well.

Indie writers will have just secured “representation” on every single thing they wrote, whether they thought they had or not. And note that this agreement goes backwards in time. So if you published indie since 2012, and signed with the agent in 2016, the agent is now grabbing for the right to stick his hand in your wallet on the 2012-2015 works as well.

People! Can I say this any clearer? Stay away from agents. Sell your work yourself. Hire an attorney to negotiate the deal.

You don’t know how to sell your work to traditional markets yourself. That’s probably good. Because right now, you don’t want to. The contracts are terrible. The treatment is terrible. The benefits are terrible.

There’s almost no upside to selling traditionally on novels right now.

Last week, a number of you have asked me how to do sell books traditionally without an agent. I’m not going to blog about that at all any more, because I think it’s a bad idea. There are older blogs on this site from years ago that mention it. Look there. Nothing has changed on how to sell to traditional publishers. However, what’s changed are the contracts. They’ve gotten worse.

Better yet, if you want to follow that path, find someone else to advise you. I won’t help you.

But, as I say to my students, you are responsible for your own career. If you want to get published traditionally, go ahead.

But consider these posts beware posts and act accordingly.

And seriously, whatever you do—traditional or indie—please don’t hire an agent.

Okay. I’m done with the agent stuff. And probably permanently unless I simply can’t help myself on some unforeseen date. Next week, we’ll discuss how to hire an attorney, and the following week, I’m going to wrap up.

And then, onto other, much more pleasant things. Like all of the good news in the publishing world for indies.

If this series has helped you or if you’ve learned something from this blog, please leave a tip on the way out.

Thanks!

Click paypal.me/kristinekathrynrusch to go to PayPal.

“Business Musings: Agent Agreements,” copyright © 2016 by Kristine Kathryn Rusch. Image at the top of the blog copyright © 2016 by Canstock Photo/Bialasiewicz.




18 responses to “Business Musings: Agent Agreements (Contracts/Dealbreakers)”

  1. Gael says:

    PS–I’m sorry, I think I wasn’t clear… I meant would you be against submitting a middle grade novel to traditional publishers, not agents. Thanks for your thoughts!

  2. Gael says:

    Kris, would you make an exception for children’s literature, specifically, middle grade novels? The gatekeepers still seem quite formidable in kidlit. Thanks so much for your latest terrifying piece here! lol. 🙂 Gaelen, anxiously awaiting the start of the big new Speed class!

  3. Maree says:

    I went back and read that agent’s comment, and I realized what has been bothering me about the verbiage that every agent I’ve come across on line has repeated. Variations on ‘well, there are some bad agents out there, but if you do your homework you can find a good one!’
    It’s victim blaming. The suggestion that even though the majority of agents are actively involved in acts that are at least immoral (and probably illegal from what you have explained) that it’s really the writers faults. That any writer that speaks up and complains is actually the person at fault, for being too dumb to read over contracts.
    Of course educating yourself is smart, but people who sought out respected agencies and followed their advice are not being stupid, or asking to be conned. They aren’t the ones who should be blamed.
    The blameworthy parties are the agents, and more than anything you’ve said here (and that has been overwhelmingly persuasive) it’s the direct statements of agents that has convinced me to never do business with one.
    And you Kris, I totally frame you as a victim activist. You’ve been there. You’re helping to protect others. Thank you.

  4. Reanne says:

    Wow, so informative, thank you. The more I read, the more my inability to get an agent is looking less like failure and more like a huge blessing.

    And it makes me think of something I heard at an author event a few years ago. We’ve got a local author in town who had some success with a self-published book and attracted the attention of traditional publishers. She ended up making a deal with one to get the series traditionally published, and before that she was approached by an agent, who she hired. Before he came on, she’d already signed a film rights deal. He was apparently very upset with her for having done so. The implication from this author’s story was that he was upset that she’d signed something without having his expertise to make sure it was a good contract. After reading your stuff, it seems to me more likely that he was just upset not to get his cut of the film deal. (Although depending on what kind of agency contract she signed, he might have ended up getting that anyway, even though it was made before she hired him.)

  5. Novice Indie says:

    Love it. So, here’s a question for a proposed coda: How do I find and retain the right sort of lawyer for this, and how much does this typically cost me (ballpark)? And a follow-on: How do I know the lawyer is any good at this sort of work?

    • That’s next week’s piece. As I mentioned in comments last week, go to this page on Laura Resnick’s website. Scroll down. http://www.lauraresnick.com/writers-resources/

      And if the attorney is bad at this, from your perspective, you can fire them and not owe them 15% of the deal. You pay a few hundred bucks max. Then you can hire someone else.

      If you fire the agent who is bad at this (and almost all are), you can fire them too, but you owe them 15% on that property for the life of the property, if you signed one of these agreements. That’s an important distinction.

      By the way, you used an anonymous email here, with no way to verify who you are. I’m letting the comment through because your question is probably the same as many other people’s. Usually, however, I delete comments from anonymous emails that have no website back-up or who are not people I know. Just a piece of information for the future.

  6. Alison says:

    Thank you! Every time I’ve read one of these posts I’m thankful I chose the indie path from the beginning. If I ever consider doing otherwise, I’ll be finding a good lawyer first.

  7. Prasenjeet says:

    Hi Kris. This post was exactly what I was looking for. The other day I had an argument with a family friend about hiring agents. I told him that nowadays it is a bad idea to hire an agent. He replied by saying that agents help you get a movie deal or a traditional publishing deal. Otherwise why would a movie producer even speak to you. The other argument he gave was that everyone grabs a percentage from your sales. If you indie publish, Amazon makes 30% of the sales, Smashwords and D2D make 10% of your sales, so why shouldn’t agents be treated the same.

    What he said, didn’t make any sense to me.

    Please help! 🙂

    • He’s confusing distributors with agents. Distributors are get a cut for putting your books in the world–literally. For the shelf space in their stores. If store owners and distributors didn’t get a cut, they would have no incentive to have anything for sale.

      Agents provide no necessary service. You can still sell your books without an agent. You can’t sell a book (easily) without shelf space (virtual or otherwise) in a store. It’s really that simple. I hope that helps.

  8. Mark C says:

    Thank you so much for these posts. I’m indie published and will remain so, although I’d obviously like to–dream of–having my books made into films or TV series (& perhaps games). And I can see how important the knowledge you’re sharing is for indie writers. Thanks again!

  9. Alexis says:

    I think that if agents are as hot as the model in the stock photo you used, then writers will sign whatever is put in front of them.

    In all seriousness, a sharp suit and a smile go a long way. So does a compliment. The assurance that this is an established literary tradition assuages many writers’ concerns. It’s exciting to have an attractive suit-wearing gentleman representing you, isn’t it?

    The clause about giving up 15% of earnings from works published prior to the agent agreement should be a fine enough reason to walk away. But it’s a smart move on the agent’s part.

  10. This provision applies to other Works self-published before our association began

    Wow! I’m surprised there’s nothing in there that lets them sell the writers organs….

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