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.