Demystifying the Mystical Art of Negotiation
I’ve been staring at the screen trying to figure out how to start this article. “Show me the money!” Seems too clichéd, especially since we all know we won’t actually see the money for a couple of months after negotiation…one, at least, in which to get the contracts and haggle out any remaining points, send said contracts to the author for signature and get them back to the publisher, and another few weeks for the publisher to process the contract and payment. So I went looking for good famous quotes on negotiation. There was a surprising dearth of quotes. Apparently, the concept of negotiation is either not terribly inspiring or the great negotiators like to play their wisdom close to the vest.
Finally, I found the following on ThinkExist.com, attributed to Dean Archeson: “Negotiation in the classic diplomatic sense assumes parties more anxious to agree than disagree.” This, of course, is the essence of negotiation. Parties come to the bargaining table because they want to make a deal. In the publishing sense, the publisher wants to buy a book or series and we want to sell it…for the right price.
There are as many ways to arrive at that price as there are stars in the sky. And it all starts well before the words “Here’s our offer” are even uttered.
It starts, really, with a great idea well executed and worked over by the author and then, likely, revised again once the agent has gotten his or her hot little hands on it. It’s a competitive market; I don’t need to tell you all that! It’s important that works be in their very finest form before they go out on submission. It could be the difference between making a sale or not, having multiple bidders or just one, days vs. weeks or months of waiting for responses. So, first there’s the polish, then there’s the submission.
There are all kinds of submissions.
Option material (the next book or books in a series or genre, depending on the terms of your contract, that you’re obligated to show your current publisher before anyone else):
There are two basic ways that offers on option material come about. In the first, the editor makes a preemptive call to say, “Isn’t it time to talk about Author X’s next book?” This means the author is doing well and the publisher doesn’t want to let any grass grow under its feet before signing the writer to a new contract. You may be talking about works in a continuing series or, sometimes, a completely new concept, in which case generally an idea will be discussed before things are finalized, though a formal submission of material may or may not commence before the negotiations, depending on what kind of clout the author carries.
In the second, the agent or author makes the first move, submitting option material to the editor. This doesn’t necessarily mean the publishing house is any less eager for the material, only that someone else got the ball rolling. Now, the offer may come in right away or take some time. It depends on several factors: how excited everyone is about the new material, how much sales information they have to go on for books that have been or are about to be released, how quickly PNLs (profit and loss) statements can be pulled together and how soon the editor can get in to see the person or people who need to sign off on the offer. Then once an offer is made, the agent and author will confer on the terms, decide what they might counteroffer or even that the offer isn’t what they’re looking for and potentially decide to decline or see what they can get elsewhere. An option means that you will give the publisher the first look, but not necessarily that you’ll decide to accept their final offer. Sometimes you might ask them to hold the offer open or they may ask if they can have the floor, which usually comes with topping privileges, which I’ll get to in the section on auctions.
New or out-of-option material:
Material that’s exempt from option for any reason (you’re a brand new writer, it’s a new series or genre not covered within the terms of your current contract, the option has been declined, either by you or the publisher…) will be going out on submission. Now, it might be a single submission or a much broader marketing. It really depends on the material and the discussions/decisions made by the author and agent. If there’s a particular editor or house that the author and agent feel would be perfect for the project they may grant an exclusive first look, in exchange for which the editor will respond very quickly. Like option material, it doesn’t mean that an offer has to be accepted if it’s deemed not commensurate with the project, either in terms of compensation or publication/promotional plans. The alternative to a single (or exclusive) submission is a multiple submission. It might be a select multiple (to only a few houses, either because they’re the best fit or because the agent and author are trying to gage the market) or a broad multiple (to all the houses appropriate to the work). One of the advantages to multiple bidders is, of course, to bring about the very best deal a publisher is willing to make. A little healthy competition never hurt anyone.
You perked up, didn’t you, at the mention of auctions? I admit that reading this article over, it’s not up to the entertainment value of my earlier pieces. But negotiation is serious bizniz, yo. (Okay, okay, I promise not to try that again. Sooo not street.) Anyway, here’s where it gets exciting. There are all kinds of auctions. There are those where the agent and author allow a publisher to set a floor, which gives a base starting point to an auction that anyone interested in participating has to top, sometimes by a particular percentage or monetary mark. The advantage for the publisher offering the floor is that they’re generally granted a boon in return, like topping privileges, which means that whatever the highest offer is when all is said and done, the publisher with the floor has the right to top, also by a certain percentage, like 10%. In other words, if bidding has leveled out at, say, $500,000, the publisher with the option to top must make it $550,000 in order to walk off with the prize. Otherwise, the top bidder will probably win. Now, I say probably because there might be other considerations when deciding to accept an offer. It may be that the auction has been set up so that the author is free to consider all terms in making a final decision. For example, format, publication date, promotional plans, rights granted, the suitability of the line and many other factors may come into play.
The same can be said for “best offer” auctions, where publishers are asked to submit their best offers by close of business hours on a particular day. Such auctions may or may not include a second round of bidding. For example, if two offers are substantially the same, the author or agent may want to go back to publishers A and B and give them a second chance to make their offers stand out. Again, the final decision may be based on more than money, though, let’s face it, it’s hard not to equate enthusiasm and expectations with the size of a publisher’s purse.
There are also auctions that began with bidding rounds, whether they’re formalized with rules about how offers are to be submitted or informal with the agent calling each of the players every time a new bid is placed to see if they want to up their bid. For example, publisher A offered $10,000, so the agent goes to publisher B, who comes back with $15,000. Armed with that, the agent calls publisher C and jots A a quick note that s/he’s still contacting the others but that the top bid is now $15,000 and so on. Publisher A then decides if it wants to raise to $20,000. Yes, it’s a lot like poker.
And here’s where preempts come in. Publisher C decides “to heck with this back and forth, I’m going to preempt.” Now, you’re read about these on Publishers Lunch, but what exactly is a preempt? It’s when a publisher decides to offer enough money to get a novel or series taken off the table. It’s the offer that makes the auctioneer cry, “Sold!” Though, of course, it’s up to the agent and author to decide whether to accept the preempt…whether it’s enough, whether this is the publisher they want to go with, etc.
Head spinning yet? So far, I’ve basically been focusing on the monetary aspects of an auction, but there’s so much else to consider and negotiate…North American volume rights versus world English or the all-inclusive world, subsidiary rights like audio, film, television and merchandising, and bonuses. Pay-out and option and deadlines, oh my! A contract negotiation doesn’t truly end until the contract is all signed, sealed and delivered. Even after the basic terms have been agreed to and a contract generated, there’s generally some haggling to be done—wording that needs to be smoothed out or a clause that’s been left in or stricken when it shouldn’t be. There’s generally at least a round or two of tweaking even at this final stage before an author gets to apply his or her John Hancock, return the Agreement and get paid.
Negotiation, it’s a dirty job, but someone has to do it. A wise woman once asked me, “Do you want to be respected or do you want to be liked.” You can’t always be both and until you’re okay with that, you’re going to want to stay out of the crossfire.