A Contract From Alibi

So, don’t ask me how, but I have in my hands (from what I consider a reputable source) a contract from Alibi, which is the sibling imprint of Hydra, the Random House imprint that I thumped on roundly in the previous entry. You will recall that I thumped on Hydra because its contractual terms were so heinous to authors (including, but not limited to, offering no advances). Well, it appears that Alibi’s standard boilerplate contract is no less horrible than — or, more accurately, it appears to be exactly as horrible as — Hydra’s contract was reported to be. This suggests to me that the contracts for Flirt and Loveswept, Random House’s other two eBook imprints in this grouping, are likely to have similar boilerplate.

Shall we dive in? Oh, let’s!

But before we do, just to have this out there:

THIS IS A HORRIBLE AWFUL TERRIBLE APPALLING DISGUSTING CONTRACT WHICH IS BAD AND NO WRITER SHOULD SIGN IT EVER.

I’m so not kidding on this, people. This is New Coke-level badness. Everyone involved in this contract needs a time out to think on what they have done. It’s genuinely shameful that a publisher is willing to offer this contract — and for that matter, to defend it.

Got it? Great. Here we go.

0. No advance. None (which is why this is point zero, rather than point one). And already I’m all fuck this contract, for reasons I’ve noted in the previous entry.

1. Right here on the first page, the contract notes that Alibi takes the exclusive right to print, publish, sell and license the contracted work, in every possible format, in whole or in part, in every language, in the entire world, for the full term of copyright.

I would note that my agent would probably not get through this paragraph without his head actually, literally exploding, Scanners-like, all over the paper. Why? Because this is an egregious rights grab, breathtaking in its scope.

To give you some context, most (US) book contracts I sign ask for North American English Language rights — which is to say, the publisher wants the right to publish and sell the book primarily in the US and Canada, in English. This leaves me the ability to sell English language rights in the UK/Commonwealth if I want to (which is what I did for Redshirts, for example), and also to sell the book in other languages to other publishers (which is why, for another example, Old Man’s War now has 20 foreign language editions). I don’t have to share that income with the North American English-language publisher; it’s all mine.

Sometimes, I will grant worldwide English rights to a publisher — for example, as I did for The Human Division. However, when I do that, it’s for specific business reasons and I (or more accurately my agent) negotiates an advance and other compensation that reflects that I am giving up financial opportunities to by allowing my publisher worldwide English rights. That’s right! My agent makes sure I get more for letting a publisher keep those rights! As opposed, to, oh, handing them over for nothing up front. And even then, I still keep the foreign language rights. Because those foreign language rights have the potential to add up to a whole bunch of money in my pocket.

There is nothing in the Alibi contract that says that Alibi is going to do anything with those foreign rights in itself (I’m guessing it does not have a bank of translators on call, slavering to translate your work) or that it’s going to make an active attempt to sell those rights to foreign publishers (including Random House publishers across the world). It’s just… taking those rights. Because, why not? If you’re stupid enough to give them your work for nothing up front, you’re stupid enough to give them your work in every single possible language and in every single possible territory.

It’s a big enough rights grab that I’m actually surprised that the language stops with “the world.” I guess there’s a lawyer at Random House who realized that “throughout the universe” might just be tipping the hand a bit.

2. The contract says that the author and the publisher will equally share in net proceeds — which is defined as gross billings after subtracting “Net Billings,” plus amounts received from licensing (some of which are carved up differently). So what are the Net Billings?

A fee to cover sales, promotion, publicity and marketing, calculated to 10% of Net Billings (which seems self-referential and confusing; more reason to have an agent look at this thing); “title set-up costs” including plant cost, conversion fees and other expenses; and expenses relating to any possible legal actions. Likewise, if Alibi decides to publish a print version — which it totally can! You said they could! — then also in Net Proceeds are paper, printing and binding; reserves against returns (i.e., money held back while copies move about from warehouse to store) and freight and distribution expenses. Oh, and, hey: If Alibi decides to make an audiobook (it totally can!), you pick up plant costs for that, including paying the narrator.

Let’s be clear about this: With the exception of the reserve against returns (which is a complicated entity that is eventually supposed to zero out, with you getting the money you’re owed), all of those things above are things that real, actual publishers cover as part of their ordinary cost of doing business. The fact that Alibi is shifting those costs to the author is hugely significant, for reasons noted in the previous entry (i.e., Alibi is shifting an extraordinary portion of the risk of publishing onto the author’s back). But it’s also worrying to the author for two other reasons:

One, it puts the author in the hole to the Alibi for an amount which the author has almost no control over — it’s Alibi choosing how much to spend on the services and expenses which constitute the Net Billings. All the author is empowered to do (at least as I read the contract) is pay for them. It should be noted that Random House probably owns warehouses and printing presses (or has long-terms arrangements which represent sunk costs), so in effect the publisher will be charging the author for services it provides, i.e., it’s taking money from the author and putting it into its own pocket — payment for services publishers are supposed to provide as their part of the publishing equation. The contractual language does note that some expenses are to be “mutually-agreed” upon, but this just brings up another problem:

Two, it transfers the cost of these services onto the most ignorant partner in the contract — which is to say, the author. Yes, authors, I know. You are smart. But — can you tell me what “plant costs” mean? What about “conversion fees?” Can you give me a sum that you know with certainty to be in the ballpark, in terms of what those costs and fees should be? Do you know how much it costs to print and bind a book? Are you sure? Is Alibi printing them individually or in one large print run? How will that affect unit cost? What’s a reasonable sum for warehousing? You better know because the contract won’t tell you — or at least the one I have in front of me sure as hell doesn’t.

And here’s another thing to consider: When it’s the publisher fronting the costs for printing, warehousing, plant fees or whatever, it will, out of its own self-interest, they will try to lower the cost as much as possible, because not doing so will cut into its profits. But authors, when you are fronting the fees, the printing, warehousing, plant fees and everything else becomes a potential profit center for the publisher.

What impetus does Alibi have to keep those costs down? What impetus will it have to keep those costs high? And how will you know the difference? Well, if you are like most authors, you won’t — and thus, you’ll be at the mercy of Alibi in terms of what costs you owe. This is, I will note, a fine way for Alibi (or any publisher under such a scheme) to make mischief and engage in the sort of accounting that ends up making the publisher a profit and the author, well, pizza money.

3. Author copies? You get one copy, on your preferred platform. Sorry, mom! Gotta pay Amazon! Seriously, that’s just a dick move.

4. Publication rights, as noted, pretty much cover the gamut of all known printed and electronic formats (including audio) — and also the ones which may become known in the future , and also covers a bunch of subsidiary rights, including serial, book club and merchandising (i.e., toys and the like). Oh, video games? Covered. It’s up to Alibi to license these, so if they lose interest, sucks for you. This is another place where my agent, having recomported his head into something resembling its previous form, has it explode all over again. Basically, it’s all covered; Alibi gets a cut — and will get a cut for as long as the copyright exists.

5. Oh, and the next thing you write? Alibi gets to option to take that, too, for the same terms as this contract (i.e., nothing up front, charging you for all sorts of crap on the back end). If Alibi doesn’t want it, you can shop it elsewhere but cannot accept an offer that’s equal or less than Alibi’s offer. Since that offer is “nothing up front, plus we charge you for shit we’re supposed to pay for,” you should probably be fine.

6. The contract has an out-of-print clause, which could allow an author an escape route, but it doesn’t define what “out of print” means in this case — a problem because a publicly accessible file can sit on a retail server somewhere, and as long as it’s there, the book is technically for sale. This is, again, the sort of thing a good agent would flag in an instant.

Things that don’t suck about this contract? One, it doesn’t require arbitration rather than access to the courts, which vaguely surprises me. Two, it allows for auditing, which is good. Please note, however, that these are standard contract points; Alibi doesn’t get credit for having them in there. Also, it does not appear that this contract specifically requires the author to pay for editing, cover art, book design and such, but they could be covered by the nebulous “set-up costs” contract point, with its tricky “including, but not limited to” phrasing. Given everything else that’s awful about this contract I wouldn’t put it past Alibi.

And there you have it.

I want to be clear: I can say, without reservation, that this is the worst book contract I have ever personally encountered. Not only would I never sign it — which should be obvious at this point — I can’t imagine why anyone whose forebrain has not been staved in by an errant bowling ball would ever sign it. Indeed, if my worst enemy in the world was presented with it and had a pen poised to scratch his signature on it, I would smack the pen out of his hand and say to him, “I hate you, but I don’t hate you this much.”

Another way to put it: There is no way I can conceive of any minimally competent literary agent looking at this contract without wanting to immediately set it on fire and then piss on the ashes. So much would have to be changed in this contract that I don’t see a competent agent bothering; they’d just send it back with the note “please send me a contract written by someone who is not currently mainlining Nyquil.”

A third way to put it: THIS IS A HORRIBLE AWFUL TERRIBLE APPALLING DISGUSTING CONTRACT WHICH IS BAD AND NO WRITER SHOULD SIGN IT EVER. Yes, I’m aware I’ve already said this. It bears repeating. It doesn’t matter whether it’s from Alibi, Hydra or anyone. Run away from it, as fast as you can, arms flailing like a Muppet’s. It’s the only rational response.

I will note that at the moment I have in my email queue a letter from Random House, written in a “more in sorrow than anger” style, which expresses disappointment that I (for one) didn’t talk to them before writing my piece on their terrible regrettable insulting Hydra deal terms, and waxing rhapsodic about their bold new business model. It’s profit sharing, you see, not like apparently any of those other book contracts out there, which comes as a surprise to me, considering how much of Tor’s and Subterranean’s profits I’ve shared in over the years.

I am speaking for myself and only for myself when I say that I looked at the letter that the folks at Random House sent me and wondered just how incredibly stupid they must think I am to believe that just because they sent a letter that read as all reasonable and nice sounding, that would somehow change the fact that the business model of their new eBook imprints is predicated on preying on writers — and preying on the writers most at risk for being preyed upon, the new and the desperate. I’m wondering in what world I would think paying authors no advances and shoving publishing expenses onto them is somehow a reasonable business model for those authors. I’m curious why they think I wouldn’t see it for what it is: A publishing imprint built to skim the slimmest of margins off the most vulnerable of writers.

So what I will say to them is this:

Dear Random House: Today I received two pieces of writing that you created. One was a letter. One was a contract. I want you to guess which of one of them better told me what you actually think of writers.

Update, March 12: Random House changes the terms of its contracts.