How to Spot (& Avoid) “Pay to Play” Publishing Contracts

In recent months, I’ve seen a resurgence of some terrible publishing “offers” that business-savvy authors need to recognize . . . and avoid.

Although these “deals” are legal if an author signs them, every time I see one of these contracts, I'm reminded of my law school contracts professor’s favorite saying: “You can make as good a deal, or AS BAD A DEAL, as you are able.”

And authors who accept these contract offers are making a very bad deal indeed.

Let's take a closer look:

BAD CONTRACT #1: “WE PUBLISH, YOU PAY”

This contract requires the author pay for some or all of the publisher's costs to produce the book. Often, the costs are not listed in detail up front, leaving the author on the hook for undisclosed (and often enormous) sums. When costs are listed, they often exceed the amount the author would have to pay to self-publish the work - meaning the author could hire a professional cover designer, developmental editor and copy editor . . . and still not pay as much these contracts require.

The publisher, not the author, should be responsible for all the publishing costs in a traditional publishing deal.

There are some legitimate "hybrid presses" that share the publishing costs with the author (and generally pay MUCH higher royalties--at least 50% of gross income--to offset those shared expenses). However, the legitimate ones are vastly outnumbered by the ones who simply want to make a buck off an unsuspecting author's dreams--so always have a hybrid-style contract reviewed by a publishing lawyer who works for YOU before you sign.

Beware: sometimes “pay to play” terms also lurk in the royalty language. A contract which pays royalties on “net receipts” and defines “net” as “amounts received by the publisher less the costs of editing and publishing the Work or less the Publisher’s actual costs to publish and sell the Work” is requiring the author to pay for the publisher’s costs. This doesn’t require payment out of pocket, but it’s still an inappropriate "pay to play" arrangement. 

Any time a "traditional" publisher tries to shift the costs of publishing the Work to the author—either up front or in the royalty share—the publisher is altering the traditional model and asking the author to take on an unfair share of the risk.

Legitimate hybrid publishers are always up front about the nature of the arrangement and the fact that the author isn’t being offered a “traditional deal.” Anyone who tries to tell you that the “author pays” model is a “typical New York contract” or a “traditional publishing opportunity” is trying to take advantage of your ignorance.

BAD CONTRACT #2: “WE PUBLISH, YOU BUY”

A publishing contract should never require the author to purchase copies of the finished book. Most publishing contracts permit the author to purchase finished copies, usually at a significant discount from the cover price. Some contracts restrict what the author can do with those discount copies (for example, some contracts prohibit their re-sale). However, traditional publishing contracts don’t ever require the author to purchase books from the publisher at any price.

One publishing “offer” I see a lot requires the author to purchase several thousand copies of the book and to pay the publisher for them in advance. The author must pay the publisher tens of thousands of dollars up front, but give the publisher full control over cover art, editing, and the content of the finished work. Don't do this. Ever.

Do the math: if the author buys five thousand copies of the finished work from the publisher at $16.95 apiece, how many copies does the publisher have to sell someone else to make a profit? The answer, of course, is NONE—and these publishers often make no effort to sell their books to anyone other than the authors.

NEVER sign a contract which requires a mandatory purchase of the work. Legitimate publishers just don’t work that way.

BAD CONTRACT #3: MANDATORY PAID MARKETING & "AUTHOR TRAINING" 

A few publishers offer unsuspecting authors a “traditional publishing deal” – where the publisher pays publishing costs and industry-standard royalties on sales – paired with a “mandatory marketing and author training contract” that requires the author to pay the publisher (or an affiliated marketing agency) thousands of dollars for marketing and "author training" services.

This is not a traditional publishing deal, and it’s not a good deal, either.

Once again, the author pays thousands of dollars out of pocket in return for unspecified "marketing" and "training." Even if services are specified, they usually include only things the publisher (or its “marketing arm”) can do in-house, like writing press releases, promotional Facebook posts, and other things authors can easily do themselves. Here, too, the publisher doesn’t need to sell any books to make a profit, and authors usually end up paying far more than the value of what they receive. 

Fortunately, authors can avoid bad contracts like these by following a few simple guidelines:

1.  Never sign a "traditional" contract that requires you to pay the publisher money (for publishing costs or royalties). 

2.  Never sign a contract that lets the publisher recoup its publishing costs before calculating your royalty share.

3. Never sign any contract without having it reviewed by an agent or a publishing attorney.

4. If you suspect your publishing deal isn't fair, or if something seems "not right"--be willing to walk away. 

Save your money and your work--because having no publishing deal at all is always better than having a deal you regret.

Susan Spann
Susan Spann is a California publishing attorney and the author of the Shinobi Mysteries, featuring ninja detective Hiro Hattori and his Portuguese Jesuit sidekick, Father Mateo. Her debut novel, CLAWS OF THE CAT (Minotaur Books, 2013), was a Library Journal Mystery Debut of the Month and a finalist for the Silver Falchion Award for Best First Novel. BLADE OF THE SAMURAI (Shinobi Mystery #2), released in 2014, and the third installment, FLASK OF THE DRUNKEN MASTER, released on July 14, 2015. Susan is honored to be the 2015 RMFW Writer of the Year, and when not writing or practicing law, she raises seahorses and rare corals in her marine aquarium.You can find her at her website, on Facebook and on Twitter (@SusanSpann), where she founded and curates the #PubLaw hashtag.

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