Business Musings: What It Feels Like To Have An Agent

Business Musings: What It Feels Like To Have An Agent

My heart is breaking.

Michael Peck sent me a link to an article in The Guardian about Chuck Palahniuk. Palahniuk is one of the clients of Donadio & Olson, the agency that had a bookkeeper embezzle a minimum of $3.4 million from writers over the past seven years. Palahniuk is one of those writers.

I blogged about this agency and the embezzlement in last week’s post.  Unfortunately, as I have been telling you all for years now, embezzlement and financial negligence is rampant at big name agencies. Almost none have systems set up to prevent it. Of the four agencies I worked with over the decades, two actively embezzled from me. I was anal with the latter two by constantly monitoring money, so I know they didn’t embezzle. They didn’t have the chance.

But the agencies that did are probably still stealing some of my money. Licensed properties (tie-in books) are tougher to get to switch the paperwork/finances switched away from the agent, so those royalties from some of the smaller companies have never shown up.

At some point, when I’m feeling litigious, I’ll have my attorney and a forensic accountant go after them. (The last time I threatened one of those agencies with a forensic accountant they threw me out of the agency overnight. By the time I got up in the morning, they had severed my relationship with them and informed all of my publishers that the payments should go directly to me. Just the threat of an audit did that. This is one of the biggest agencies with some of the biggest names in the world. Ask yourself why they were afraid of a standard business practice. You know the answer.)

Anyway, this morning, I received a link to The Guardian piece. And in that piece was a link to Chuck Palahniuk’s blog post on the theft. The post breaks my heart.

Palahniuk says he’s “close to broke” because of this. The “close to broke” situation is not something he discovered just this week. He’s been struggling financially for years now.

And, as a result, he apologized to his fans. That’s what breaks my heart. He’s apologizing because someone stole from him and lied to him, and he’s apologizing for believing the lies. Poor man.

Here’s what he wrote:

So on the minus side, I apologize for cursing my publishers.  And I apologize for any rants about piracy.  My publishers had paid the royalties.  Piracy, when it existed, was small scale.

     I do hereby humbly apologize.

Palahniuk has published 24 books that I can see on his site. One of them became a major film (Fight Club). I’m sure there are ancillary rights sales that I’m not seeing here.

But as bestsellers go, he’s not that prolific. Nora Roberts publishes a minimum of four books per year, sometimes more. Jeffrey Deaver and Michael Connelly publish a minimum of two per year, sometimes more.

When you have a cushion of dozens upon dozens of published books, and those books have sold ancillary rights and a few have been made into TV shows and films, and the sales continue, then you are making a boatload of money.

If your agent is stealing from you and still paying some of the money, then you might be making a small boatload and to you it feels like a ton of money. If the agent wasn’t there, you would be making a fleet-of-yachts money. But to most writers, most of whom have been poor, a small boatload is a great deal.

I’m not going to pick at Palahniuk’s post. I’ve been where he is, although not to that extreme. He trusted his agents and the agency deeply. When his publishers told him they had sent the money they owed, and his agent said the money never arrived, he believed the agent.

I would have believed neither, and asked for proof of the money being sent. Then I would have tracked it down…the first time it happened.

When Dean and I hired the big agency that embezzled from us, we demanded that our money come to us the moment it cleared the agency’s account, no more than ten days after it arrived. Then we monitored. Those were expected funds—advances, timely royalty payments. So, the agency got creative. When it stole from us, it did so with things we had no way of knowing about, payments that were actual surprises—something selling better than expected in, say, Germany, for example, so that a company that had paid no royalties in the past (but sent statements) suddenly paid thousands. And we were told that “this year, they forgot” to send royalty statements, but there was no payment  just like previous years.

See how easy that is? Even when someone is monitoring the agent?

It feels terrible to be the victim of theft. When I was 18, someone broke into my dorm room and stole the quarters my roommate and I had saved up for laundry. I was more concerned about my wallet, which the thief had tossed in the bushes near my dorm. Once I found the wallet, I was fine, but my roommate never got over the feeling of violation. She would put a chair in front of the door every night, worried that someone would break in.

That was a one-time theft. We learned from it. We checked to make sure our door was locked whenever we left it.

But the on-going continual thefts? Embezzlement? That leaves you feeling like a fool. You should have seen it. You should have known. Especially once all the signs fall into place, all the little things that bothered you.

Palahniuk writes about that feeling so eloquently. And I feel for him. Because I felt all of those things too.

It’s one of the reason I blog so strongly about agents. Don’t hire them, people. They’re not regulated. They have sloppy business practices. They probably aren’t insured against this kind of thing.

As Palahniuk acknowledges at the end of the post, going after them legally (which it seems that he’s doing) is an iffy financial proposition. I decided not to sue the first embezzler so I can give you his name and the name of his agency. I do, when I teach in-person workshops. I tell anyone who asks.

You see, many of my friends have gone after him legally, and have gotten a settlement—which he paid out of funds he stole from other clients. He also demanded a nondisclosure agreement as terms of the settlement. I refused to participate in either of those things.

As for the second embezzler, I wanted out of the agency. So when they threw me out after I threatened them with an audit, I got what I wanted. But it’s clear to me that they’re continuing to steal from me. So, as I said above, they will be facing legal action from me eventually. I get to pick the time and place. I’ll be doing it so that I can blog about it, not to get money from them. (It’s thousands, not tens of thousands, these days.) But I’ve told a number of their clients that I caught them embezzling and they all say a version of what Palahniuk said:

I’ve worked with the same team of people since 1994.  To suspect anyone was stealing, I had to be crazy.

I’ve been accused of having a “bad breakup.” I’ve been accused of “being crazy about agents.” I’ve been accused of lying about this.

Sorry, folks. I’m not crazy. I didn’t have a bad break-up. This type of financial mismanagement, the kind that led to the embezzlement, is common in these agencies. It’s becoming visible now, because traditional book sales have declined, and so it’s harder for an agency to pay one complaining client with another (non-complaining) client’s advance.

But here’s what I want you to see. I want you to look again at Palahniuk’s apology.

I apologize for cursing my publishers.  And I apologize for any rants about piracy.  My publishers had paid the royalties.  Piracy, when it existed, was small scale.

Now, I want you to think about how many big-name writers you’ve seen railing against piracy and how it’s cutting into their book sales. I want you to think about how many big-name writers blame Amazon (!) for ruining the book business and causing book sales to decline.

I want you to think about how many big-name writers who have said there’s no money in writing, not like there used to be.

All of those writers have agents. All of them.

All of those agents pay New York rents. All of those agents have lifestyles to maintain. All of those agents have unfettered access to millions of dollars.

Look at Palahniuk’s apology again.

The publishers paid. Piracy was small.

As I said, this breaks my heart. Because on top of the financial loss and the hurt and the difficulty, there’s a major betrayal. Embezzlers create friendships, but aren’t friends. They’re thieves.

They don’t break into a dorm room and steal quarters. They pocket hard-earned cash from a writer’s dream. They destroy success. And they smile and smile and smile when they do it.

Here’s how Palahniuk puts it:

He seemed like a good guy.  Like a prince of a guy.  Like man-crush material.  And then he wasn’t.

Yeah. That. Over and over again. It’s heartbreaking.

And I’m sorry all these writers are going through it.

So I blog about this.

Don’t hire literary agents for anything. Not foreign rights. Not movie rights. Do not hire them at all.

Get an attorney to do a single job. Learn the business yourself.

Or you will experience what Palahniuk is experiencing.

And believe me, that’s not an experience you want.

Ever.

******

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“Business Musings: What It Feels Like To Have An Agent,” copyright © 2018 by Kristine Kathryn Rusch. Image at the top of the blog © Can Stock Photo / dmitrimaruta.




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21 responses to “Business Musings: What It Feels Like To Have An Agent”

  1. […] Kristine Kathryn Rusch wrote a forceful and impassioned argument for artists to become better at the…. She also advised authors to never, never work with an agent. […]

  2. Wayne Borean says:

    Ouch. Poor Chuck. That really sucks.

    I may not comment that often, but I religiously read your business posts Kris. Truly great stuff. And your Freelancer’s Survival Guide is fantastic resource.

    Wayne

    PS: I also edit, if anyone needs editing.

  3. Christoffer Petersen says:

    Dear Kristine

    I have been lurking on Dean’s website for a while, and have finally – about time, too – discovered your website, and I just want to say that I am learning so much from both of you. Your latest posts about agents, and Dean’s posts and book about sacred cows in trad and indie publishing have helped me make a lot of decisions, and yet, that “myth” of having an agent is truly ingrained. I have a series of books generating some interest with a publisher in a foreign market. They wanted my agent’s details. I found an agent, got very, very excited, and even did the whole “of course, rewriting makes so much sense” speech. Now, things have cooled a little – as has my head – and I am waiting on a hard copy of the contract to sign …

    So, I haven’t signed anything yet, and my books are selling on Amazon with no marketing beyond a single Pay-Per-Click on Goodreads. And all the “signs” are saying “don’t”. 🙂

    I just wanted to reach out and thank both of you for posting valuable information that helps to make informed decisions in the current world of publishing. I still have yet to make that “final decision”, but I’m getting there.

    Thanks!

    Chris

    • The agent wanted you to revise after someone else wants to buy it? That’s seriously bad advice. And…just an observation…it’s really easy for agents to embezzle on foreign sales…

      I’m glad you’re rethinking. Thank you for the kind comments. Congrats on all the good things that are happening with your writing. And let me point out that you did all those things on your own, with no help at all. (For the rest of you, when someone asks for your agent, tell them you have none and they have to deal with you. It’s that simple. {and that hard})

  4. […] Why are some agents able to steal from their clients? […]

  5. David Kudler says:

    Ouch. Just… Ouch.

    I’ve had positive and business-like dealings in all of my personal interactions with agents — though there’s never been much money for them to steal. (That is, they never sold much. How funny that that’s a positive.)

    But Joseph Campbell Foundation (for which I have been the managing editor since 1999) had looooong battles with a pair of agencies that had been ripping them (and before he died, Campbell himself) off in just this manner for decades.

    JCF represents its own rights, licenses, and permissions now. Amen.

  6. […] course of decades from major bestselling authors, including Chuck Palahniuk, author of Fight Club. According to Kristine Katherine Rusch, this is not an […]

  7. It feels terrible to be the victim of theft. When I was 18, someone broke into my dorm room…

    It does feel terrible when that happens. When I was 24, someone broke into my apartment and stole the money I was keeping for a support group I was a member of. I remember still how outraged I felt that someone would steal money I was safeguarding for that group. I remember the sense of violation, knowing that a malevolent stranger had entered my home.

    That was small time stuff, but my maternal grandmother had her life completely turned upside down when her father’s business partner embezzled so much money that the business failed. My grandmother suddenly had to leave college and get a job in order to support her invalid mother.

  8. I’m a barely out of the gate (fictionwise) writer on the indie-side with no plans to query agents, not after reading your descriptions of the pitfalls, Kris. I admit freely I know only these sorts of horror stories, along with the 15-percent for life and submit in triplicate and revise ’til we like it hoops posted on agent websites, so I can only really watch the conversation and shake my head in wonder.

    That said, I did have a question (in longer form at my place here) that should matter to anyone who’s either still tangled up with that side of the business, or trying to rationally get into the agent/big publisher side of the business: Where are the audits?

    How do they get away with not opening their books? And why do writers let them get away with it?

    If this is standard, then revealed preference says agents (and big publishers, likely) aren’t “respecting” writers for anything but their ability to be fleeced as easy marks.

    • Teri Babcock says:

      ‘And why do writers let them get away with it?’
      Because friends don’t audit friends. Or dare to imply that they have done anything wrong.
      A lot of writers are oblivious, true, but also they are afraid to damage their relationship with their agent, who they think walks on water. They wouldn’t want to be seen as disloyal. After all, their agent made their career, picked up all the pieces when the author fell apart, and practically wrote their best-selling books for them!

      If writers are afraid to hurt their agent’s feelings, they could at least contact their publisher and ask them for numbers.
      If I were a publisher, in the interest of not enabling fraud, I would start sending out payment summaries directly to my authors every quarter. Here’s what we paid on what date for what time period and which books.

      • Hi, Teri, thanks for the reply. I understand you to be describing the idea, not necessarily endorsing it, so I’m just noodling below on how much the result costs a writer caught up in it.

        Thing is, I can sort of understand that mindset. Let’s face it, we’d all sort of like to be able to trust that there’s somebody there to look out for us.

        But I couldn’t quite leave it there. So I did something perhaps a little evil. I did some math (more details here if anybody wants the nuts and bolts).

        And what I come out to is that a novelist with a high-midlist agent, someone who gets 40K advances anytime they want to, is basically getting about 2.5 weeks total of their agent’s time for each novel sold. And I mean total over the lifetime of a contract for that novel.

        A first-timer, getting a 5K advance, is getting about about 2.5 days, total, from her agent, again over the lifetime of the first sale.

        Um.

        This is friendship?

  9. […] Kristine Kathryn Rusch has blogged her warnings about literary agencies multiple times.  Read her thoughts here. […]

  10. Mirtika says:

    I really hope this is a wake-up, epiphany moment for authors with agents. To keep an eye on business and to immediately demand that publishers send the author their 85% directly, not through an agent. No reason at all in hell for an agent to have to be an intermediary. They are serving the authors. Authors should get paid first or at the same time–split payment. Or pay the author and let the agent wait for their check. Or just get rid of the agent and keep it all. Someone as well-known as Mr. Palahniuk should not even need an agent anymore. He’s been in the biz a long time and an editor isn’t gonna refuse to look at his manuscript sans agent. Keep the 15%, Chuck.

  11. Kessie says:

    This whole article makes me mourn other authors (with agents) who have railed against “piracy” before. Seeing as “piracy” seems to be agent code for “embezzlement”. Maggie Stiefvater, a popular YA author, wrote this blog ranting about how much piracy hurt her sales.
    http://maggie-stiefvater.tumblr.com/post/166952028861/ive-decided-to-tell-you-guys-a-story-about

    But now, with this big case coming to light, I wonder if she shouldn’t just audit her agent instead. Wow, I hurt so much for all these authors right now.

  12. lfox328 says:

    I’m at the beginning of my writing career. I’ve only, so far, indie-published 2 short stories. I have a complete novel I’ve set aside (the revisions are beyond my current skill set – I’ll pick it up after I write a few more books), and am planning the next.
    So, for me, this is not immediately critical.
    However, I’ve already learned so much about the business of writing from your blog, that I will put blog contributions on my to-do list. It’s been worth it, just for these cautions (not be mention your Free Fiction Mondays, which just MAKE the start of my week).

  13. Vera Soroka says:

    It’s too bad that happened to him. But I can see clearly now that you must treat your writing like a business and that is where these writers fail. They trust the publisher and these agents to look after them. I don’t know where that ‘look after’ thing came from but any that do end up getting screwed over-many times. You don’t see that in other businesses so why would this be different?
    Just read Dean’s post and I automatically thought of L.J. Smith-author of the Vampire Diaries. She lost everything as well and then almost died in 2015. Have not heard from her since. I wonder how she is but no posts to let readers know if she is still here or what. It’s very sad.
    Another YA author is absolutely convinced that piracy hurts her. She even put up fake copies of her book to prove her point as she writes in series and in trad that is an iffy game. Her series was flailing and she blamed piracy. My first reaction was if they didn’t charge so much they wouldn’t pirate it but anyway, the whole agent and traditional publishing thing is just a bad game right now. Stay away from both.

  14. Sam says:

    Most publishers require agents to submit work to them. How do you get around that if you have a lawyer instead of an agent? Or did I misunderstand you?

    I’m really sorry about all your troubles with agencies. I never would have imagined this could happen–silly me. Thanks for sharing your story.

    • A lawyer can act as an agent. Or better yet, submit it yourself…if you still want to be traditionally published. Go to conferences, make the connections with editors, ask to submit, and then follow-up. It’s really simple in this modern world. Many places take submissions by email as well. The note to have an agent is a rule designed to make writers go away. If you’re persistent, someone will look at your work. After all, you might be the next bestseller. But make sure you hire an IP attorney to negotiate your contract, after you’ve done the research on the rights you should license. (See my columns on how to do it here: https://kriswrites.com/business-musings/contracts-and-dealbreakers/)

  15. When I mentioned this crime in another social media place, and said I didn’t trust agents (and I am very glad glad I ditched mine before they could do long-term damage), I was accused of being a delusional indie. Of course, that person was running a literary agency. Funny how he was so defensive…

    I stepped away from that conversation. But I am warning my writing friends, I’m sharing your articles in my writing coaching group, and I won’t ever hire an agent again.

    • Allen F says:

      “Of course, that person was running a literary agency.”

      Ask him if he’s willing to have an audit done on his books right now. After all, if you’re a ‘delusional indie’ he has nothing to hide – right? 😉

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