Business Musings: A Small Post on Negotiation

Yeah, yeah, we’re in the middle of a series on branding. But I just sat down at my computer for the first time today, at the time I usually quit writing. It’s the only day this week when I can write my blog, and while I have two in the can (and you can get them if you support me on Patreon), I don’t want to post them yet on my website for a variety of reasons.

As you can probably tell, the day did not go as planned. We have just gotten two new cats, and I expected some troubles with our older cats. I did not expect three hours at the vet this afternoon. We thought we were going to lose our fifteen-year-old cat today; turns out his chronic health problem (that he’s had for three plus years) flared up in a way it never had before. We usually manage it with diet. Sometimes he needs medication, like he did today, to get him back on track. But manageable, and nothing unusual, given the stress of new cats in the house.

Relief!

Then I had some things I had to get done at the office. I did those first, figuring I had the branding blog in my brain. I knew what I was going to write. I thought it would be easy.

The problem was, when I sat down here to write it, the brain whined: That’s too complicated. Can we do something else? Pretty please?

I have learned, after decades of writing, that forcing my subconscious to work when it’s this relieved and this tired is a recipe for several frustrating hours at the computer.

Rather than spend those hours wrestling a branding blog to the ground, I’m going to point you to someone else’s blog and show you a few things that I think are just plain brilliant.

Bestselling writer Michael J. Sullivan wrote a post on Reddit titled “Why Del Rey and I Will Be Parting Ways.” (One of my readers sent me this link—and for that, I thank you. As I’ve said many times in the past, I am grateful for how much you all interact with this blog.)

Michael J. Sullivan self-published his early novels, before the big increase in self-published books. His books were available when the new ereaders hit the market, and readers were looking for good content. He sold a lot of copies very fast. He also got an offer from New York, and took it—a sensible move in 2010, when no one knew how this entire indie thing was going to pan out.

He also continued to self-publish. He used (and uses) Kickstarter in creative ways. And, because he and his wife—who is his partner in this—printed paper books the old-fashioned way (before CreateSpace), they learned a lot about the way the publishing industry works.

His website chronicles his history as a writer.  You might want to take a look. His history is a lot more complicated than I’m making it sound, but it’s fascinating too, because it shows how a writer can build a career.

Anyway, his blog post about his relationship with Del Rey is candid and helpful. Usually, I read posts about negotiation written by writers—indie or traditional—dealing with traditional publishers, and I want to shake some sense into the writers.

Here, I want to applaud Michael and his wife Robin for their negotiating skills and for their attitude.

To summarize the highlights of the blog about Del Rey, for those of you who haven’t jumped over to read it, Michael and Robin learned from their first major contract with a traditional publisher to retain audio rights. Michael and Robin didn’t do so on that first big contract, and then the audio rights sold for $400,000, of which Michael and Robin saw only $200,000 (subsidiary rights in a standard publishing contract are split 50/50 with a publisher).

So…and here’s a nice bit of brilliance… Michael and Robin didn’t want to lose audio rights again. When the time to negotiate a new Del Rey contract came around, Michael and Robin had already sold audio rights to those books, taking those rights off the table entirely.

They thought through what they wanted, and rather than argue over the rights, or get the print publisher to bump an advance, or go through all of the little tricks that people on the other side of the table do when negotiating, Michael and Robin were proactive. They made sure they got what they wanted with audio first.

I know of no other writer who has ever done that kind of thing in a major publishing negotiation. Mind you, I know a lot of writers who have lawyers instead of agents, and I know nothing about those negotiations. (Except two things: those writers never discuss their deals, and those writers are generally richer [and savvier] than their agented peers who also happen to share a bestseller list with them.)

That little bit of negotiation would’ve been worth a mention in any blog I wrote on negotiation, just for the sheer sensibility of the maneuver. By negotiating the audio rights first, those rights were off the table in the negotiations with Del Rey. Those rights were unavailable because they’d already been licensed.

Excellent. Smart. Something you all should keep in mind, even if you never plan to do a traditional publishing deal. I just did something similar in a negotiation I’m doing for film adaptation rights to a project. I’ll be a little less cagey about that negotiation in some future blogs after everything shakes out.

Remember, I always say that when you negotiate something, you need to know what you want, what you need, and what you can compromise on.

You don’t necessarily tell the person on the opposite side of the table those things, unless they come up. But you have to know those three things firmly so that you take the appropriate action when the time comes.

And if you can’t trust yourself to take the appropriate action, then you need to do a little manipulation of yourself. Sometimes that means you hire a negotiator for you (a lawyer! Not an agent. See the agent posts here). Sometimes that means you sell the audio rights first. Or do whatever it is you need to do, for you, so you don’t even have the opportunity to negotiate against your own interest.

Let me add one other thing about negotiation: always do it by email, never by phone. It’s easy to forget what you want when you’re talking to someone. With email, you have time. You can print out the discussions, spend a few hours (or days) thinking about things, and craft your answers just like you would craft a short story.

You can also see the reasoning behind your position and the position of the person on the other side of the table. And if you need to hire an attorney to write a deal memo or a contract, that attorney can look at the emails as work product.

So kudos to Michael and Robin for their previous deal.

Then comes 2017. It’s time to renew the partnership with Del Rey. And as before, Michael and Robin sold the audio rights ahead of time. But, as Michael writes, “[Robin] wanted to make sure Del Rey realized that the audio books were sold, so they knew what they could have and what they couldn’t — basically the same as the last contract. As you might have guessed, the response came back that the CEO at Penguin Random House has made a corporate wide decree that states, that editors with their imprints (including Del Rey) are ‘absolutely, and with no exceptions, forbidden to strike deals anymore that do not include audio rights.’”

In other words, Del Rey couldn’t even negotiate a new deal—even though they like Michael, his books are selling extremely well, and both parties are happy with the working relationship.

Here’s where the attitude I was discussing comes in. Michael makes it clear as he talks about the end of the deal.

So, what does all that mean for my books going forward? Not too terribly much. I wouldn’t have made that gamble without other alternatives.

Exactly. A good negotiator should always look at the possible responses to an offer before making that offer. Michael and Robin were going to offer six books to Del Rey. I’m pretty sure Michael and Robin were surprised that they couldn’t even talk about a deal without the audio rights—that part was probably unexpected. But the fact that Del Rey did not make a new contract—that wasn’t unexpected, as you can tell from Michael’s comment above.

I just “lost” a major TV deal—at least that’s what most people would think. I had been negotiating the damn thing since January, and I couldn’t get terms I liked. In fact, the terms offered were awful. (Partly, that’s because the company I was dealing with was relatively new, and partly, that was because the lawyer the person on the other end had was extremely bad.)

I’m the one who terminated that deal. I walked away, because it was better to have no deal than it was to have this company license my books. A lot of people who knew about the negotiations were stunned that I walked away. But I do that often.

And just as often, I make great deals, for me. (I’m signing a different TV deal this week; the negotiations were very smooth for that one.) I make the choices, based on what I can live with, not on what others believe is good for me—or based on the fact that the company won’t deal with me if I don’t give them such-and-so rights.

The large media conglomerates, which now include traditional publishers, want to own IP. In fact, they want as much of it as possible. (I’ll have a blog post here on that later in the summer; that’s one of the Patreon blogs.)

Which leads me to the only part of Michael’s post that I disagreed with. He writes,

Now, do I really think there are “absolutely no exceptions”? No. If Rowling or Stephen King wanted to keep their audio rights, I’m sure they would be able to. Likewise, if an author is selling very little in audio, I’m sure they wouldn’t care if they were kept. But I seem to be in that spot where I’m not “big enough” to waive audio and my audio sales are too large for them to ignore.

Knowing the CEO at Penguin Random House, I’m not sure that anything in that paragraph is true. I know many major bestsellers who are fleeing Penguin Random House because of stringent (and ridiculous) contract terms. I also know that big names are fleeing in general. Remember, Nora Roberts, who had been with the company for two decades, decamped from Penguin Random a year ago, when her contract needed to be renegotiated.

Here’s what she said in a blog post last year titled “Ch-Ch-Changes,” “There were changes in the house I worked with, lived in, was part of for more than twenty years, and with those changes I no longer felt at home there. Home, for me, is the center, the core, personally and professionally, so I need to feel comfortable and in place. I need to fit and feel connected.”

I can’t tell you how many times I’ve been hearing something similar from my writer friends about Penguin-Random—which includes Del Rey, which includes Berkeley. It’s gotten ugly over there. Don’t be surprised if more of your favorites either become hybrid, go indie, or move to another publisher.

Nora’s first book from St. Martins Press appeared in February. I hope she’s happier there.

One last point on negotiation: sometimes you will come across a completely unreasonable person on the other side of the negotiation. That’s what I encountered in that TV deal I mentioned. Those people wanted to own everything, even though it was my series, not theirs.

Penguin Random wants all of the growing markets—moving audio (a big growth market) from subsidiary to major right might make sense to them from a business perspective, but that also means they’re forgetting that the writers are their publishing partners, not someone who works for them.

Negotiating can be hard in the moment. But you have to learn how to do it. Once you do, you’ll realize just how much control it gives you over your own work and your own career.

The more control you have, the more opportunities you have. And in this new world of publishing, we writers have more options than we have ever had before.

And that’s a fantastic thing.

 

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“Business Musings: A Small Post On Negotiation,” copyright © 2017 by Kristine Kathryn Rusch. Image at the top of the blog © Can Stock Photo / Kudryashka.




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9 responses to “Business Musings: A Small Post on Negotiation”

  1. […] thing as a self-published author – that’s so 20th century thinking! ? And also this small post on negotiation is a good way to remind us that traditional publishing is still tricky. And if we want to tackle […]

  2. Jean Lamb says:

    I have to agree about phone calls vs. email. My son, who produces non-commercial DVDS (but only the ones he has rights to) once called up Filmation and asked about rights to He-Man and She-Ra. They said, “We’re going bankrupt. You can have them for free!” The next thing he said was, ‘Um, could you please send me an email confirming that?” “Oh sure!” And that email came in very handy when the FBI agent came by, trying to crack down on intellectual property theft on the word of someone they’d arrested and was naming the names of everyone else she knew in the biz.

  3. Hey Kristine,
    Thanks for posting about this issue. I think the more writers that are aware of what is happening in the industry is a good thing. Knowledge is power!!

    As to the exception thing, (or lack there of) who knows for sure. It’s a relatively new policy (I think), so I’m not aware of anyone other than myself who has raised the red flag. I’ll keep my eye out to see if anyone else is able to break audio away from a newly minted PRH contract.

    In any case, at a minimum this means several things (a) audio rights are getting much more lucrative. I’ve received two deals recently one north of 1/2 a million (for two books) and the other was seven-figure for three books. Now, I know that my audio sales tend to skew high, but I think in general the audio producers are being very generous with their advances right now. and (b) selling audio rights first could be a coffin’s nail for print/ebook rights at many (if not all) of the big-five). I know Harper Collins is already steadfast on this, and I was unable to shake Hachette loose from audio in 2 deals I did with them. Now we are seeing PRH clamping down.

    In the long run this is a bad thing for traditionally published authors, especially when the offers aren’t increasing even thought the rights grabs are getting “more grabby.”

    The good news is there are all kinds of alternatives. Self-Publishing, print-only deals, independent presses. It’s a great time to be an author…but you also have to be aware of the landscape, be smart, and be nimble.

    That’s my take at least 😉

    • Thanks, Michael, and thanks for doing the original post (and all of your business posts). Most trad pub writers never talk about their deals. Some are contractually unable to, and others have been told by their agents not to, and listen to that silly advice. It may be a new official policy, but in the past 2 years, they’ve lost several other deals by refusing to budge on subsidiary rights. (I know from some writer friends; can’t talk about the specifics, though.) The others can’t, won’t, or never think of raising red flags. It used to get you blacklisted, and lots of writers still feel the sting of that.

      Which is why I love writers who are hybrid, who understand business, and realize that knowledge is power. The trad pubs knew that too, which was why they shut writers up about sharing their deals. Back in the day, 10 of us writers who had come in together used to meet in someone’s hotel room at cons and go over each other’s deals. Didn’t dare get caught. Boy, did we learn a lot.

      In the long run this is a bad thing for traditionally published authors, especially when the offers aren’t increasing even thought the rights grabs are getting “more grabby.”

      The good news is there are all kinds of alternatives. Self-Publishing, print-only deals, independent presses. It’s a great time to be an author…but you also have to be aware of the landscape, be smart, and be nimble.

      I agree, 100%. Thanks again for your post, and for posting here.

  4. […] THE SOUND OF MONEY. Kristine Kathryn Rusch pointed her readers to bestselling writer Michael J. Sullivan’s a post on Reddit titled “Why […]

  5. Kate Pavelle says:

    The “be willing to walk away” part is important. A German house wanted to translate something of mine, so I asked for terms, and discovered that they wanted “everything.” Mindful of the “slices of the pie” concept, I said no, you may have e-book and print, if you want audio, video, etc., you can buy an option, and I suggested terms. Surprise: “That’s fine, we’ll take all non-print items out.” Now they are deciding what to translate. We’ll see what happens next. Meanwhile, I’m writing. Thank you for all the blogs, Kris!

  6. antares says:

    Years ago, I represented a writer. Come contract time, her editor called up and told me the terms. My side of the conversation was limited to ‘Mmm-hmm”, “Uh-huh”, and “I’m sorry. Say that again, please.” As soon as we finished the call, I sent him a memo by email to memorialize our conversation. (Important act that, memorialization. Timing was important, too. ‘Substantially contemporaneous.’ Absent correction, the other party may be deemed to have accepted the memo as accurate.)

    The funny thing was, I never negotiated any changes. The writer I represented befriended the publisher — or the publisher befriended her — and when the writer flew to Rochester to discuss updates with her editor, the publisher always took her to lunch. By two in the afternoon, they had eaten and written a new contract. The publisher called her secretary with the changes, and they returned to her office and signed. Both walked away happy.

    And the editor never did catch wise.

  7. Suzan Harden says:

    I’ve been hearing things are getting bad at Randy Penguin. If Nora’s situation in the chocolate sauce, Michael’s story is the cherry on the sundae.

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