Business Musings: Time and Money (Again)

Business Musings: Time and Money (Again)

And so it begins.

I received three different emails this week from writers, wondering what to do about delayed or non-payment. These writers are smart enough to ask. I have no idea how many others aren’t asking at all, but believing all will be Just Fine Eventually.

At the end of April, I wrote a blog post titled “The Trainwreck.” It’s mostly about traditional publishing, and at the end, I gave traditionally published writers advice. The main advice I gave them was this: Make sure you split payments with your agent. In other words, have your traditional publisher pay you directly and pay the agent’s 15% directly.

I know a lot of writers didn’t take that advice. A few wrote to me, as writers always do when I give that advice, and tell me they don’t want to offend their agent. I used to sigh and write those writers off. Now, I tell them this: If your agent is so easily offended that a standard business request, such as splitting payments, bothers them, time to get rid of the agent.

For years, I’ve been telling writers to get rid of their agents and to hire IP attorneys to handle the final steps of contract negotiation. I’m still branded as a wacko for giving this advice, even though agents are not regulated and not bonded and somehow writers trust them with all their money. Writers who never run a background check or a credit check or anything.

As if agents have magic fairydust that will make books sell in a very tight market. Agents don’t. They are a remnant of days when long-distance phone calls cost a fortune and the internet did not exist.

Writers don’t need agents, shouldn’t get agents, and should get rid of any agent that they do have. Before regular readers of this blog leave because they’ve seen this rant before, I’ll get off my soapbox and link to some of the agent posts. There are several here. If you want to dive in, start with this one.

Please, writers, do yourself a favor and learn how to handle your own business.

Especially now.

The writers who’ve contacted me about non-payments or delayed payments have no idea where the problem is in the financial chain. All three of the writers have agents, although two hired them for subsidiary rights only. One of the writers hired the agent for everything.

Here’s the issue: In all three cases, a publisher owes the writer payment. The payment is significantly delayed, more than in the past. In all three cases, the writers have asked the agents to get the money. In all three cases, the agents have reported that the publishers are in financial trouble and have no idea when the money will arrive.

I had an agent give me that exact same message once, after one of my overseas publishers had published a book and sent me copies of the book. There was an advance payable on turn-in, and it had never arrived.

I couldn’t quite square the idea that the publisher would send me books directly if they were still sitting on my money—and had been for nine months. I said this to the agent, who responded that publishers do silly things sometimes, and she would make sure the publisher never sends me books directly again.

Also, a strange response.

So, I contacted my editor, thanked her for the books, and asked her directly about the payment (in a polite way). She sent me the payment stubs from nine months before, when the money was due. She had sent the money to the co-agent in that country.

Dutiful but now suspicious me sent that information to my U.S. agent, who immediately paid me the money, and sent a letter saying that Look! It was the foreign agent! They sat on it!

Only…this was in August. And I knew for a fact that the foreign agent was on holiday (as was half of his country) because he and I had talked about vacation destinations. I also knew that in the hours between me sending my email and my U.S. agent receiving it and forwarding the money, there was no chance that a wire from overseas would have gotten through.

So…if the foreign agent had been in the office (or checking his bank account on a local holiday) and if he had managed to get the funds out of a bank in his country and if he had sent a wire (in the days before most people used PayPal or online payments like that)…the payment still wouldn’t have arrived for two weeks.

If the U.S. agent wanted to impress me, she should have said that she fronted the money out of her own pocket. Instead, she made it very clear that she thought I was an idiot and that she would have sat on the money, maybe forever, until I noticed it was missing.

After that, I went through all my payments from that agency, noticed that as eagle-eyed as I am, I still missed some late payments, and asked about them, getting a similar runaround each time. All of these were foreign rights payments from various countries and I was told over and over and over again that foreign publishers never paid on time. (Whoops. I’ve since learned that most pay in a much more timely manner than U.S. publishers.)

I finally threatened to audit the agency, and that’s when they kicked me to the curb. Overnight, “firing” me as a client, and saying they no longer represented me on anything, sending letters to all of my publishers to that effect…except my foreign publishers.

See the pattern here? This was after my previous agent also embezzled my foreign rights money. I’m not the most unlucky person on the planet. The previous agent was sued time and time again for fraud and embezzlement, and he always offered a large payment to settle out of court, with a non-disclosure agreement.

These events happened in good times, when the economies of the world were on solid footing and traditional publishing was doing well.

I shudder to think about what’s happening right now.

No, I know what’s happening.

If publishers aren’t paying, agents aren’t making their rent or mortgage payment. They’re not able to keep the lights on in the office and they’re not getting groceries.

If publishers are paying—a third on the dollar, as one big publisher told its writers recently—then the agent still isn’t getting the percentage she’s used to. I’ve known one or two good, ethical agents. I’m sure they’re passing the funds through.

The rest of them? They’re using the money to pay those rents and mortgages, to keep the lights on, and groceries in the fridge—thinking they’ll be able to catch up later “when everything returns.”

But you’re thinking Not my agent. I have one of the reputable ones.

Maybe you do. The agent who embezzled all that money from me, the one my foreign publisher and I caught red-handed, works at one of the best and now biggest agencies in New York. She’s still with the company, handling foreign rights, even after I informed the owners of the agency of her light fingers.

Tells you something, doesn’t it?

But how do you know your agent is reputable? Why should you be in the position of verifying the truth of what’s going on with your money? You should have done all of that beforehand, but of course, you were too happy to get an agent to do the due diligence, run background and credit checks, and figure out if the agent was trustworthy then. You figured, as I did when I hired Embezzler #1 that the writer who recommended the embezzler to me was such a pitbull in business that he would never get screwed.

Turns out I was wrong about the writer pitbull too. He didn’t know his arm from his ass when it came to business. Sadly. Even though he had a reputation for being one tough S.O.B.

So…back to the problem at hand. Publishers aren’t paying. And you are owed money. In fact, you need the money. Everyone does right now.

You need to go through some steps.

  1. You need to find out if the publisher has paid the money. That means you need to contact someone at the publisher to see if a check has been issued on a particular contract.

And here’s a problem: Some really big publishers (Randy Penguin is one) won’t tell you if your money has been paid, because your contract stipulates that the funds go to the agent. And they claim that the agent is the only one who can ask about the money.

Lawyers who read this blog, you might want to weigh in here. That sounds like bullshit to me, but it might not be, because it is in the contract. So, you might have set up your own barrier to finding out information when you signed that contract.

In that instance, go to your editor. Don’t tell them the sob story about the lack of payment. Just ask if the payment’s been sent. The editor will tell you if it was issued. Or if they put in for the payment. Or they’ll give you a song and dance about everything being shut down right now.

If you get the song and dance, they haven’t sent payment. If you get a positive response on the payment being issued and/or you’ve been told they put in for payment, the problem isn’t your publisher.

It’s your agent.

That’s where the money has been bottlenecked.

Rather than angrily confronting your agent about this, tell them you spoke to the editor and that it’s clear the payment is on the way and/or got “lost in accounting.” Then call and write every few days until the payment is in your hands.

Once the payment is received, I’d fire the damn agent. You probably still think your agent is fine and it was “just a mistake.” Even so, tell your agent that you’re splitting payments and then you send a notification to your editors of the change in policy with the agent, asking if you need an addendum to the contract to make sure the payment comes directly to you.

  1. If the publisher hasn’t sent the money, tell your agent you’ll be handling the collection. Split payments with your agent anyway (going through the steps above) and then you do debt collection with the publisher, making sure they send the money to you directly.

If you’re dealing with the publisher, you’ll know if they’re on solid financial footing or if they’re constantly making excuses.

If they’re in financial trouble, scour your contract for escape clauses. Generally speaking, contracts are set up with consideration. If you do x, they pay you y as a result. If y is not paid, then the contract is in violation, and you can ask for the rights back.

  1. So, the publisher owes you money, and they won’t pay you, and they’ve already published the book. What now? Many things. Again, they’re probably in breach of the contract. You can pull the book. They’ll try to keep the book in print, but if they’ve violated the contract, the contract is canceled and they have no right to the book any more.

You can take them to court, in their country or the U.S. or wherever the contract says the jurisdiction is. Or you can wield a bigger stick.

Tell the publisher you will be letting Amazon and the other online book distributors the publisher is violating your copyright.

Trust me, if that publisher has money to pay you, they will.

If they don’t, you need to make good on that threat, but in this instance (and the one above), I’d hire a good IP attorney for an hour or two of their time, to write letters on their stationary to get compliance.

If you’re dealing with a foreign translation, chances are the translator hasn’t been paid either, and they will partner with you. I’d do it, because they might willing to let you indie publish the book after you’ve wrested it from the publisher.

  1. Time, Time, and More Time: All of this legal crap takes time. If you’re fighting over a few thousand dollars, you might simply want to write it off as bad debt on your (U.S.) taxes and move on. Why? Because you can lose all of your writing time for months (years) going after this stuff, and at a certain point, it’s not worth all your time to go after a bad debt.

Here’s what I told all three of the writers.

Figure out your hourly rate. If you can’t figure it out, or it makes your head hurt trying, use the number Mike Resnick gave me and Dean twenty-five years ago now. Figure your time at $500 per day.

Then, keep track of your hours going after this money. At some point, going after the debt will cost you more than the debt is worth.

Putting this in real money terms will help you keep your time under control.

For example, let’s say that Your Trad Publisher owes you $5000, which they pay through your agent. Which means you get $4250 after agency fees.

Using the $500 per day figure, if you spend 8.5 days (at 8 hours per day) on tracking this money down, you’ll break even. If you spend more than 8.5 days, you’re losing money.

Yeah, yeah, yeah, you say. It’s the principle of the thing. No, no, no it’s not.

You’re writer. You need to write, particularly right now. You need to create new works, not chase deadbeats who owe you money for other work.

Here’s what you focus on:

  1. Get rid of your agent. You don’t need them in today’s world. Best case, they will hold you back. Worst case, they’ll pocket your money in these tough (and getting tougher) economic times. If you can’t quite bring yourself to do that, then split payments. Please, please, please. Split payments and protect yourself.
  2. 2. Get your rights back. Who cares about the money, really? I mean, yes, you need it to pay your bills, but guaranteed, if you signed a traditional book publishing contract negotiated by an agent in the past 10 years, you signed a very bad contract. In fact, you’ve lost almost all rights to your work.

No agent is going to renegotiate that contract for you, because that contract makes sure they get 15% of the monies (and sometimes 15% of the copyright).

Tell your publisher that if they cancel the contract, they won’t owe you a dime. If the book is already published, give them permission to sell the remaining paper copies in their warehouse, but they have to take down the ebooks. (You will need an accounting of how many books are in the warehouse before you agree to this.)

Since most trad pub contracts now buy rights in all languages, you will now be able to license the rights the publisher never exercised. You’ll probably make more money on that book if you handle the contracts and marketing yourself.

I would suggest that you learn how to indie (self) publish your novels. Trust me, you’ll make a lot more money than you would have with traditional publishing, particularly if you already have an audience. We offer a Publishing 101 course, so you can learn step by step. (And you’re in luck! We started a short sale on all the workshops just this week.)

There’s a lot to learn. But you’ve already done the hard stuff. You’ve learned how to be a good storyteller. You’ll be able to handle the publishing and distribution, because it’s much easier now than it was 20 years ago.

If you get your rights back, you can negotiate foreign rights deals, audio rights deals, movie rights deals. Chances are, you don’t have that opportunity right now with your traditional publisher because of the contract your agent negotiated and you signed.

  1. Learn Business. It’s long past time for you to learn how to run your arts business.

Right now, we writers are lucky. So many careers in the arts are either on hold or have been destroyed by this virus. People are still buying books. They’re still reading. We writers—particularly those of us who publish our own work—are doing much better than any other artist out there.

Capitalize on that. Take the time to learn the most important part of your profession.

Don’t let the trainwreck that is traditional publishing crash into you.

Protect yourself. Now.

I started this post with “And so it begins.” I thought the economic hardships from the bad deals in traditional publishing would hit in the fall. Turns out so many agents and publishers were on a financial edge in 2019 that six months into the disaster that is 2020, the economic hardships are hitting already, and everyone is taking it out on the writer.

This is only going to get worse, my traditionally published friends. Please take control of your careers. Don’t become a coronavirus arts casualty.

Revamp your business…while there’s still time.

*******

I blog about the writing and publishing business weekly on this website and have done so for 11 years now. Like you, I’m grappling with the new reality we find ourselves in and I’m writing about it.

I also realized that it’s time for me to revamp The Freelancer’s Survival Guide. I’m (slowly) updating it for the new world we live in, and I’m putting the new or heavily revised chapters on Patreon for my backers only. I’ll probably put a handful here, if I think the posts will mean something to everyone. But most of the revised Guide will be available there, until the newly revised book comes out sometime in 2021.

Please remember that this blog is reader-supported.

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If you liked this post, and want to show your one-time appreciation, the place to do that is PayPal. If you go that route, please include your email address in the notes section, so I can say thank you.

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“Business Musings: Time and Money (Again),” copyright © 2020 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / mmaxer.

 

17 responses to “Business Musings: Time and Money (Again)”

  1. Jean Lamb says:

    I’ve been trying to build an audience as a strictly indie author, but it’s been a pretty hard, slow slog. I’ll keep at it, but it feels like pushing pudding uphill.

    • Mark Schultz says:

      It’s very hard, Jean. I promote books and I tell authors that marketing and promoting books is an ultra-marathon rather than a sprint. I also suggest that an author set apart an hour or two of writing time, every week or two to focus on promoting a book or books. The opportunities are many, but they all require time. Many good blogs have been written on that very topic, and there is not a one-size-fits-all solution.

  2. Felix J.Torres says:

    Thanks for the note about the publishers offering 33% payment instead of in full.

    I’ve long suspected that publizhers payment lag was to let them play the float game.
    Problem with that is they now need to pay last year’s royalties with today’s revenues.
    (Give or take a few months, right? )

  3. Olivier says:

    About getting rid of agents: what to do then about publishers who won’t deal with self-represented authors?

    • Seriously, why is that important? They offer such terrible contracts.

      If the publisher won’t deal with a self-represented writer, then hire an attorney. It’s not a blanket policy, by the way. If some NYT bestseller wants to represent themselves on sales, who would say no and tell them to get an agent.

      Forgive this frustration in my post, but jeez. Why are writers so damn worried about someone who wants them to hire an employee before they will do business with them?

      Writers have to stop acting like they have no power here. THEY are the ones with the product the publisher wants. NOT the other way around.

      • Olivier says:

        Going indie can be great if you already have an audience. The poster case for this would be Rachel Bach (disclaimer: I read mostly SF, fantasy and horror), who also seems to relish the business aspects of going solo; not every author does, just like freelancing in IT isn’t for everyone. Adam Nevill also comes to mind.

        But if you are completely unknown then color me skeptical. As a reader the vast bulk of what I read still comes from trad publishers because sifting through the mountains of stuff on Kindle or Smashwords is too hit and miss. Off the top of my head I can think of only two authors (in the genres mentioned above) who got big while starting as indie: Andy Weir (of The Martian fame) and Josiah Bancroft (the Sendlin trilogy) and eve those I discovered only after they got picked up by trad publishers.

        • You can be skeptical all you want. It just means you haven’t been following what’s happened in publishing for the last 10 years. Writers like Lindsay Buroker have not been traditionally published and they outsell and outearn traditionally published writers by factors of 100. Maybe you should start looking at things like 20BooksTo50K to learn what’s going on outside of the traditional publishing limited worldview.

          By the way, writers who don’t relish the business aspect get screwed, especially in traditional publishing. They’re the reason I started this blog 11 years ago, before I learned that most of them don’t want to learn business. They want to be taken care of. People who are taken care of lose every dime they make and generally lose their copyrights too.

  4. C.E. Petit says:

    This response is going to be a bit disjointed. It is not legal advice for anyone’s particular circumstances and is not an offer or solicitation of representation. (That should give away that “JD” behind my name doesn’t stand for “juvenile delinquent.” Well, not only “juvenile delinquent,” anyway.)

    (1) Part of this nonsense about “availability of audits” is wound up in the “sale or license” issue. The lawyers at Random Penguin know damned well that a licensor has audit rights that cannot be limited or restricted by contract under New York law. (They can be gilded with cumbersome extras and notice requirements, but they’re for three years and can reach back to inception if a systematic error is found in calculations.) And it’s not just at Random Penguin.
    This is one of the reasons that the concept of a “sale” in publishing, when anything less than the entire copyright has been transferred (as under the 1909 Act), is so damaging… because a seller does not have those guaranteed audit rights. But it’s only been forty-two-and-a-half years sense all publishing transactions that did not result in the publisher owning the entire copyright became “licenses,” even though the statute doesn’t use that term. That’s just not enough time to expect the entrenched industry to recognize that something has changed to its disadvantage.
    The key point to remember is this: Just because there’s a line in a contract that says “You only have these rights” does not make that right enforceable. This morning, a judge in the Appellate Division in New York made that very point in noting that the mere existence of language that might restrict Dr Mary Trump from disclosing… something… may not be enforceable. And a confidentiality clause in a settlement is nothing but a contract clause dressed up for court.

    (2) Our Gracious Hostess was unduly kind to her unfaithful agent(s). Legally, there is a much worse consequence that would have occurred: The agent and agency would have forfeited all compensation (their 15%) reaching back to the date of the first improper withholding. That’s a bedrock principle of New York agency law (and that means “agent” in the legal sense, not “literary agent”): That once an agent breaches his/her/their/its fiduciary duty to the principal, the agent has lost all right to compensation unless and until formally excused for that breach. That means that during the period that the “agent who gave me that exact message once” was improperly withholding foreign-rights payments, the agent/agency was not entitled to its percentage on any other deal.
    Naturally, the statute of limitations is long gone, and the only real winners when this theory gets litigated are… the lawyers.

    (3) In response to Jean Lamb’s question above, again I believe Our Gracious Hostess is being unduly kind… not to Ms Lamb, but to the publishing establishment. Leaving aside whether “no unagented submissions” policies violate either antitrust law or civil rights laws (hint: under some circumstances they do, as in the WormyFruit/”Agency Model” litigation that smacked both the publishers and Apple with a splintery 2×4 demonstrated), those policies are counterproductive and the result of inept beancounter analysis. The publishers claim that it’s “too expensive” to pay enough staff to go through those huge slush piles, and offload that to the agencies who are presumed to perform the same function. Leaving aside whether that creates a conflict of interest in the agencies — it’s an opaque and convoluted inquiry to which I answer “well, maybe” — there’s a structural question that authors should be asking about publishers who make that calculation: What does the publisher’s willingness to allow a third party to regulate its supply chain imply about the publisher’s willingness to cut corners elsewhere, such as in sales-and-marketing support, in print-quality control, in having enough employees on hand (or working remotely!) to answer author inquiries about late royalty payments?
    In short, I’d never submit to a publisher with an “agented submissions only” policy because I consider that publisher to be unprofessional. Admittedly, I’ve been in this game nearly as long as Our Gracious Hostess, in one role or another, but still…

    (4) And now back to another issue related to point 1. As soon as the publisher claims that “only the agent can ask for this,” call the bluff. The contract is between the author and the publisher (the agent is not a party with an enforceable interest, as Lampack v. Grimes made all too clear and the entire industry is trying its best to bury). The publisher is using the author’s property. There is a statutory right to information on the use of that property, notwithstanding anything in that contract that says transmission of that information to the agent is sufficient fulfillment of the publisher’s duty. (That phrase relates only to the timeliness of information, and for that matter payments; the substance remains open to inquiry at any time, despite the misleading wording of these clauses, and before anyone asks I’ve seen Random Penguin’s boilerplate as of early April.)

    Sorry this has gone on, but these are complex issues that are nowhere near as simple as the dismissive responses coming from the Manhattan echobox make them seem — especially since many of those making those dismissive responses are either willfully ignorant or outright liars. (I get to say that because I know them.)

    • Thanks, C.E. Thanks also for confirming what I knew (but can’t advise, since…not a lawyer!), that the publisher has to provide the writer with the information about payment. Fortunately, that’s one idiocy trad pubs have never foisted on me, but generally, by the end of my career in trad pub, they were more or less terrified of me…

  5. Too bad you still have to repeat yourself; still have to perform the soapbox opera ‘Agents & Publishers’. It seems that Don Quichotte may not retire yet …

    We have an expression: ‘Met aardige mensen worden de grachten gedempt’ / ‘The canals are filled in with nice people’. (The beautiful canals in our old Dutch towns aren’t always appreciated…). Meaning something like ‘don’t be gullible; there’s people out there selling the moon to nice and friendly people’, all for their personal gain. (Always) Be aware folks!

    As a former owner of an employment agency, I know how important audits are. Even then, you should realize that such audits are often based on annual reports from the previous (tax) year (!). You will have to continue to follow the current (financial) news and respond alertly yourself.
    But even then … My company lost tens of thousands of €uros in the bankruptcy of one of the largest customers. A company that worked in technology worldwide; had great annual figures and was in the news weekly because they had brought in new projects and / or taken over companies. Companies can grow very quickly, but can go down much faster …

    Based on my own experiences (not to mention the great blogs of you and Dean) I consciously chose ‘going wide’ and not exclusive. Nevertheless, I still have a gut feeling about distributors / aggregators. Successful, worldwide players. As the tech company mentioned above… Maybe I am mistakenly suspicious. Frankly, I find it strange that a sale of an ebook (in my opinion a ‘direct’ and ‘non refundable’ sale) is only paid after 30 – 60 or sometimes even 90 days. Not to mention the elusive numbers and payout of subscriptions such as KDP Page reads and KOBO Plus. Mind you, no complaints on payout thusfar. Checking numbers however is a disaster. (The latter is quite successful, and a ‘tidy’ payer, in The Netherlands / Belgium; learned that KOBO Plus will also be activated in France in August and later this year in Canada. This service does not require exclusivity, as KDP does. You determine per story whether you participate).
    Recently learned about Payhip. This service promises to pay directly (via PayPal). Just posted the first stories on this site; therefore no sales / experience yet. Because this service runs through your own website, you obviously have less reach than through the aggregators.

    I work with 10 different aggregators. You may call it paranoia; I call it ‘ spreading risk’. I am very curious about the experiences other writers have with aggregators. Perhaps a good topic for a blog?

  6. James Mendur says:

    Another interesting (for Chinese curse values of “interesting”) thing has been happening recently, too. A number of authors have found themselves facing online mobs for past bad behavior. In amidst the uproar, at least one agent has dropped an author because of the accusations. Can you imagine trying to wrangle with an agent for your money after they do that to you? And you have to wonder what was in that contract between the author and the agent and the publisher about rights and ownership and money. And if you’re reliant on agents, can you imagine having to look for another one in that kind of environment? Because they’re reliant upon agents, this could end up killing more than one author’s career, even if they use secret pen names for future works.

  7. Jean Lamb says:

    What trad publishers will even look at your manuscript without an agent? There aren’t that many of them any more. (I’m indie published and probably will stay that way, because my life is too short to play Dances With Agents, but this is a real problem).

    • It’s not a problem. You market the work yourself to the publishers. But I’m not going into depth on how to do that, because I don’t advocate that writers go to traditional publishers right now, at least in the U.S. If you want to market overseas, look at this and learn it. http://smithwriter.com/FML_article Learn about licensing. It’s your career. That you need an agent is a Big Nasty Myth.

  8. Mark Schultz says:

    Excellent post! Thanks for highlighting these oh-too-common pitfalls that so many writers walk into without looking. A writer has to have the frame of mind that every person they have business dealings with will take care of themselves first and foremost.

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