Questions to ask before granting rights

27.07.21

This article is the first in a series of articles where we’ll explore the questions you should ask before you sign a publishing contract. This week, we’re looking at the questions to raise before granting rights. This article will be followed up by a piece on the issues to think about when negotiating the money, and a final article on the questions to ask about your publisher’s sales and marketing plan.

Even if you have signed many publishing contracts, this refresher can be a reminder of negotiating points. If you have key questions you always ask before signing your contract which may be missing from our article, we’d love to hear from you - get in touch here! 

Are you a beginner when it comes to publishing contracts? Before reading on please see our FAQs for an introduction to publishing contract terminology and more.

A caveat before we begin: we acknowledge that authors' bargaining positions vary greatly and while we always encourage authors to negotiate for the best deal they can reasonably achieve in their particular circumstances, we do understand that sometimes publishers won't budge on certain issues, for example term of licence. This article isn’t intended to be prescriptive but we hope you find that it arms you with the knowledge you need to negotiate, where it is possible.

Publishing contracts typically require authors to grant broad rights; you are asked to grant an exclusive licence to publish your work, worldwide, for the entire length of copyright in a range of formats, with an accompanying right to allow your publisher to sub-licence third parties to also use your work. 

How do you evaluate this scope of rights?    

It’s easiest to think about the rights being granted by breaking it down into 4 categories:

1. The territories
2. The term (period of time the licence endures)
3. The formats
4. The subsidiary rights 

Territories - What territories should you grant? 

Authors/illustrators have a few options when it comes to granting territories. You may choose to carve up your international rights: granting one publisher the exclusive right to publish in Australia and New Zealand, another publisher the exclusive right to publish in the US and Canada, and another publisher the exclusive right to publish in Spain and so on. 

However, the reality is that many authors choose one entity to manage their international rights for them. For example, you might appoint an agent to represent you worldwide and that agent will deal with publishers in various countries to maximise your opportunities. Alternatively, you might grant an Australian publisher worldwide rights and leave it to that publisher to sub-licence overseas publishers to publish your book in other countries (often referred to as an ‘overseas rights sale’). 

To decide which territories to grant to a publisher, we encourage you to ask: 

1. Does the publisher have good international contacts? Attend international book fairs?
2. Is the publisher well-resourced with an active rights manager? 
3. Is the publisher experienced in overseas rights sales? Does it have a strong track record of selling overseas rights, particularly in your genre? What are some examples?
4. Does the publisher believe your book holds appeal for other markets? 
5. Does the publisher intend to pitch your book to overseas publishers? In what territories?

The answers to these questions will help you decide whether to grant rights narrowly (perhaps just in Australia and New Zealand) or broadly encompassing multiple territories, or worldwide. 

You can also strike a compromise: for example, grant worldwide rights for a limited time, say, 2 to 5 years, in order to allow the publisher a window of opportunity to exercise the rights, after which period of time all unexploited territories revert to the author.

Term of licence - How long should the licence last?

How long should a publishing contract last? Publishers typically require “the legal term of copyright” which is the lifetime of the author plus 70 years after the author’s death. Given the typical commercial life of a book, this lengthy term is almost absurd but publishers are keen to cover themselves in case you have written the next To Kill A Mockingbird. 

Questions to ask when deciding on a reasonable term are: 

1. What is my exit route? Is there a termination / reversion clause that allows me to reasonably bring the contract to an end in the event that sales have dwindled to nothing and the publisher has lost interest in the book? This is vital. Without a termination clause, do NOT accept a life of copyright term.
2. What is the publisher’s investment? In a traditional arrangement, where the publisher is paying all the costs of production, has paid you an advance and has an expensive marketing campaign prepared, of course the publisher must be allowed time to recoup its investment. If you are in a non-traditional arrangement where you are paying the costs of production, a lengthy term is not justifiable.

It is very difficult to generalise, but broadly, the ASA considers a 10 - 15 year term reasonable in most traditional publishing contracts (longer is ok if the reversion clause is fair). 

Why not try to grant a term of 10 - 15 years and then extend the term if you and the publisher are both happy with book sales and wish to do so? This gives you another opportunity to refresh the commercial terms if the book proves to be successful.

Formats - what formats should you grant?

Nearly every publisher will want the rights to publish in print, ebook and audiobook format. Audio rights have recently become far more important; many publishers will not accept a deal if it doesn’t include audio rights. 

Questions to ask:

1. In what formats will you publish my book? print edition? ebook edition? audio edition? 
2. Will publication be simultaneous or phased? Is the publication of one format contingent on the success of another prior format? Do you have agreed publication deadlines for each format? 
3. If audio rights are sought, check whether the publisher will be producing the audiobook itself (some publishers have in-house recording studios) or whether they will outsource the production to an audio producer, in which case you need to check what the subsidiary rights section (see below for more on subsidiary rights) in your contract says about audio rights before making any decision. 

Once you have settled on the publisher’s intentions, grant those rights and nothing more. If the publisher cannot guarantee they will publish in all formats, it  makes no sense to grant rights for all of them.

Specificity is your friend. Vague rights that allow the publisher to publish in “any medium whatsoever, whether now known or developed in the future” do not serve you.

Subsidiary rights - what sub rights should you grant?

As well as the primary right to publish, authors are asked to grant their publishers the right to sub-licence third parties for a range of purposes including: 

• Translation rights
• Anthology rights
• Serialisation rights (to publish in serial format, either pre or post publication, in a newspaper or magazine)  
• Dramatisation rights (for film, TV and stage)
• Audio rights 
• Merchandise rights (for example, to produce plush toys or calendars, stationery, pencil cases etc)

Questions to ask:

1. With respect to each of the subsidiary rights, what is the publisher’s intention and experience? For example, does the publisher have a good track record of negotiating for screen adaptations? Ask for examples. Bear in mind this doesn’t necessarily neatly correlate with size; medium publishers may be skilled at this. 
2. What contacts do you have? Are there any opportunities which you could reasonably explore yourself? If so, consider withholding these rights or granting them non-exclusively. 
3. What percentage share of the earnings from the exploitation of subsidiary rights will flow from the publisher to you? 

This will be discussed in our next article on the commercial terms but remember that the ASA recommends the percentage should be high, usually at least 65% and up to 80% of the publisher’s net receipts. 

A compromise might be to grant exclusive subsidiary rights for a limited period of time (again, giving the publisher a window of opportunity) after which any unexploited rights revert to you.

Summing Up 

Before granting rights, have regard to the publisher’s expertise and experience. There is no point granting international rights to a publisher who has never negotiated an overseas rights sale, or granting film/TV rights to a publisher who has no intention of negotiating for screen adaptations. From your perspective, the worst case scenario is granting rights - exclusively - to a publisher who won’t exploit those rights. They are then locked up, yet will earn you nothing. 

If you don’t know the extent of a publisher’s expertise, ask. Do it politely but don’t be afraid. You are entering into a business partnership with your publisher: it’s ok to ask questions. 

...stay tuned for our next article in this series: Questions to Consider When Negotiating the Money