Earlier this month, The Penguin Group, second largest trade book publisher in the world, sued five authors who accepted advances but never produced the promised books. The authors included:
- Elizabeth Wurtzel, author of Prozac Nation, who signed a $100,000 deal for another book in 2003;
- Blogger Ana Marie Cox, who signed book deal in 2006;
- Rebecca Mead, a staff writer at The New Yorker;
- Holocaust survivor Herman Rosenblat, whose history, as told to Oprah Winfrey, turned out to be a fabrication; and
- Conrad Tillard, who signed a contract in 2005 to produce a memoir.
Copies of the original publishing contracts were submitted with the lawsuits and showed that the total advance amounts were between $30,000 and $325,000. Publishers normally split advances into multiple payments as milestones are reached, such as contract signing, delivery of so many chapters, delivery of completed first draft, etc. None of these defendants had received the full advance that their contract provided for.
Most traditional publishing projects give the author an advance against royalties. The amount depends on the strength of the project and who the author is. New genre novelists might receive $2,500 (or nothing at all). Name-brand novelists might receive from several hundred thousand to a few million dollars, divided over a multi-book contract (where they receive a portion of the advance for each manuscript delivered). Bill Clinton (the winner so far) received a $15 million advance for his memoir, My Life.
The word “advance” means an advance against royalties earned by sales of the book. So the publisher is paying royalties in advance of when they are actually earned. If the book sells well, royalties accumulate based on the percentages given in the author’s contract.
Once the total amount of royalties earned exceeds the advance paid to the author, the publisher starts cutting regular checks to pay the author the additional royalties earned beyond the advance. That’s called “earning out.” Many books don’t sell enough copies to earn out the author’s advance. But advances are usually non-refundable. That is, if the author produces the book, and it doesn’t sell well, the author doesn’t have to pay back the advance. The publisher is taking a risk that they can sell enough books to cover the advance. That’s why people like Bill Clinton or John Grisham can collect huge advances. Their publishers are confident that they will sell enough books to cover the advance.
It’s interesting that Penguin waited between 4 and 9 years after a contract was signed to sue these five authors.
Depending on the circumstances under which a project ends—and on the amount of money in question—publishers have been known to let an author keep an advance payment as a sign of good faith for a project that just didn’t turn out as expected.
I have no quibble with requiring an author to repay an advance if the author simply did not perform. But I also take it as a sign of the times in the world of traditional publishing that the second largest trade book publisher would go to the expense of a lawsuit to recover amounts as low as $22,000.
Nicholas Wells represents new authors in contract negotiations with book publishers.