Monday, December 14, 2009

Negotiating Your Advance

A few different times this year I’ve been asked, through the comments section, whether or not it’s ever beneficial for the author to negotiate a lower advance and higher royalties or if the author should always go for the big money up front.

There are a lot of differing opinions on this subject and ultimately there is no right or wrong. There are agents out there who believe that an advance should never be earned out, that their job is to get the most money possible up front for their clients, and that if an advance is earned out they haven’t done their job. There are others who believe that publishing is a slow and steady climb, that selling your book for a smaller advance is better because with each subsequent deal you can negotiate a bigger advance, better royalties, and hopefully the publisher will stick with you longer and help you build a career.

Personally, while it’s rare I’ll turn down a really big advance, I’m a big fan of the slow and steady climb, especially when it comes to fiction. In my experience, I’ve seen far too many debut authors accept huge advances, write the books as per the contract and disappear from the publishing scene. The publisher had big expectations and they weren’t met, and it usually doesn’t make financial sense to keep throwing money at something that really isn’t working. My opinion on the slow and steady climb is that you will eventually make the money you were meant to make, and if your royalties are big then that only gives you more negotiating power with the next contract. All that being said, in my mind, my job is to guide the author, not make the decision. Ultimately it’s going to come down to how much of a risk taker the author is and what she really believes about her book.

Certainly I’ve been involved in a number of auctions in my time. In some cases the advance offer of one house so far outweighed what others were offering that there was no argument. I’m talking ten times the amount. In a case like that I don’t think there are many authors who would take the lesser advance and I don’t think there are many agents who would advise them differently.

In other cases the offers were almost identical. In those cases I usually encouraged the author to go with the bigger house or the house and editor who I thought were the most enthusiastic.

And in some cases, the advance was bigger at one house, but the other house was offering more on the backend (royalties and rights offerings). In those cases it was up to the author and me to really talk about what she was most comfortable with. Did she want to take the chance that she would make back the difference down the road? And how did she (and I) feel about the editors and the overall enthusiasm the house had for the work? In one case, we actually went with the house that offered the lower advance for a couple of reasons. This particular house was not able to come up with more money up front, but their royalty offer far outweighed what the other house was offering. More important, though, there was a level of enthusiasm and commitment the smaller house was willing to make that the other house wasn’t. We felt that commitment was much, much more important than money.

In other cases, I’ve had situations where we knew we were short-changing ourselves in terms of how much of an advance was being paid per book, but the author felt that she would rather feel locked in with a certain number of books (say, a four or five book deal) rather than simply a three book deal. She felt that the number of books the publisher was buying showed their commitment even though she might be slightly underpaid for the later books in the series. Her feeling was that she would make the money in royalties anyway.

There are so many things to consider when negotiating a contract that there’s no easy answer to this question. In the end, yes, I do think it makes sense to sometimes take a lesser advance if it means higher royalties. Other times, however, I’d say take the money and run.

Jessica

18 comments:

Maria Zannini said...

Ref: In my experience, I’ve seen far too many debut authors accept huge advances, write the books as per the contract and disappear from the publishing scene.

That is one of the most intelligent things I've ever heard an agent say.

I so want you to be my agent. Can't wait until you start accepting queries again.

Anonymous said...

Oh, to have such problems, huh? :)

I'm for moderate advances with an enthusiastic house. But I don't think that is often the case with most offers, it seems like in the industry, "big" advance equals enthusiasm, which I think puts the author at great risk if they don't earn out.

Interesting post.

Kimber An said...

I'm a fan of 'Slow and Steady Wins the Race' too.

But, I'm not going to expend any brain cells on right now, since I haven't even made it to the starting line yet.

writeme said...

Also, though, an editor's passion for the project can wan, too. I know of authors who thought they were the "big" title for that imprint that season, until a bigger book came along and their book (as far as marketing and publisher push went) was delegated to the sideline.

Mira said...

This is really interesting and helpful, Jessica - thanks!

I also agree with the slow and steady approach, to the point where I would be willing to completely forgo the advance. I have a job, I don't need a big chunck of mony that's not going to earn out. I'd rather build my career over time, and have people be willing to invest in me without too much loss.

But that's me. And, like Anon 8:40 said, 'oh to have such problems..'
:)

Mira said...

Oh, I should add - forgo the advance in exchange for a much higher rate on the 'back end.' If I do earn out, I'd like a fair share of profits. But I'd be willing to share the risk as well.

Casey McCormick said...

I've thought about this quite a bit and have wondered what would happen if a book had a lot of interest but the author specifically didn't want a big advance.

Would it still go up for auction, but with offers geared towards attractive royalties instead of advances? Or would it not go to auction at all, in a case like this? The choice then being made by such things as House, enthusiasm, etc.

Great post!

Anonymous said...

And when you've made these decisions: i.e. taken less in advance, etc. how did they work out in the end? Were they, in retrospect, the right decision?

Kate Douglas said...

FWIW, my first sale was a very low advance, but I was so thrilled to finally GET an offer, I didn't question it. My publisher has been terrific about building my career, I earned out quickly and future advances have grown accordingly as my books continue to sell. In my case, Jessica's slow and steady approach has worked perfectly.

Casey, an auction only occurs when two or more publishers want the same material and are willing to bid on it. I had that happen with my newest series, and it was absolutely nerve-wracking--in a really good way! It all happened a year ago this week and I will never forget what it was like to have Jessica calling me over the course of a few days with her reports on the new offers that continued to come in. It was absolutely exhilarating!

Remember, though, that an advance doesn't show up all at once. Most contracts are set so that the author gets a percentage up front, more on delivery of the manuscript and often the remainder on publication, so even a very large advance can be spread out over a number of years, depending on how many books are included in the offer.

Robena Grant said...
This comment has been removed by the author.
Robena Grant said...

I think I'd be like Kate, happy with whatever amount. Anything to give me a start. Slow and steady would be my style as I'd intend to stay in the game for as long as possible. Also, there are tax issues to consider as that advance becomes added income. A smaller sum spread over a couple of years would be just fine thank you. : )

Malia Sutton said...

"Personally, while it’s rare I’ll turn down a really big advance, I’m a big fan of the slow and steady climb, especially when it comes to fiction."

Great Post. I'm so glad you said this. I totally agree. I like knowing that I'm building and reaching higher. I also don't like the stress of being expected to earn out a huge advance, because you just don't know how a book is going to be received until it's released. I'd much rather work hard to promote and share in the back end.

SharonK said...

Looking forward to having this conversation with my agent, not if but when it happens.

Anonymous said...

Very timely post for me... and I'm interested to know, in US terms,what a "huge" advance is. I am an Australian writer whose first novel got a low 5 figures advance in Aus and (hooray!) earned out in 4 months. Now my book has been picked up by a big US publisher for a mid 5 figure sum- which scares the bejeezus out of me, actually. Is that large or small or par for the course? I'm wondering if I should have instructed my US agent (who is separate to my Aus one) to ask for a *lower* advance, b/c I'd rather have lower expectations on my first US book and the chance of earning out- thus making myself as an author an attractive proposition for my next novel. Or is that just crazy thinking?? (Chances are my agent would have just laughed at me anyway!)

Anonymous said...

PS. The novel is commercial/women's fiction BTW... I'm assuming (not positive though) that different genres tend to attract different advances?

Anonymous said...

Australian writer, yes, different genres do go for different advances.

And yes, it would have not been smart to ask for less money. Mid five figures is fairly average for a second book, considering your other factors.

This is not pointed to you, but to desperate people who are not agented yet - stop with the "I'll do it for free" comments. It doesn't make a publisher want you any more. In fact, it's quite the opposite.

You have value. And Jessica's post is a good one, but the point of it is not to beg for less or no money.

Anonymous said...

Great point, last Anon! Too many starry-eyed writers just want to see their name in print--but those of us career journalists and writers need to make a living too.

I'd def go for the bigger advance--the publisher usually spends more time & money on publicity to help earn back their investment. I say, GO for it! How many years did that writer spend without pay BEFORE they got that big advance?
It's only fair...

Anonymous said...

I'm the Australian writer at 7:11- thanks for those two responses. It's actually a first book, not a second (it had already sold in Aus, but it's the same book), but point well taken about doing it for free/asking for les money. You're right- it took me 11 years of hard work, 2 non-fic books and and 2 unpublished novels to finally sell my first novel, so I DO desrve it. Publishing is just such a frightening business to be in sometimes though that it's easy to lose sight of that.