My Original Post on Crescent Moon Press and Entangled Publishing’s Contracts

This is my original Pitch University column about Crescent Moon Press and Entangled Publishing’s contracts, which I’m reposting in its entirety, followed by the comments and questions that were posted on that site. I’ll respond to all comments and questions, including those posted when the column was published last month. For any new comments or questions, use the comment box at the very bottom of the post.

This is my second column about publishing contracts. Each column reviews a publishing contract (or maybe two), and I discuss five points about each contract that are good and/or bad. (See bottom of this post to submit your contract for analysis.)

Disclaimer: My opinions here are general in nature and should not be interpreted as legal advice for any particular situation. Any recommendations or advice necessarily depends on the specific facts. If you want advice or assistance about a specific situation, feel free to contact me and we’ll discuss whether I can help you.

I had originally planned on writing about contracts once a month, but since I am receiving quite a few contracts to review, I will write as often as time allows (as long as you keep sending them to me).

Today I want to talk about the contracts offered by Crescent Moon Press, Inc., an e-publisher, and Entangled Publishing, LLC, a new publishing company.

CRESCENT MOON PRESS, INC.

I was recently asked to review the contract offered by Crescent Moon Press (CMP). Its contract is marked “confidential,” so I will not quote directly from it. However, I do want to discuss it generally with you.

In my humble opinion, this is the kind of contract that a writer should BURN, not shred.

Among its many problems is that CMP offers NO protection to the author for any copyright infringement and can’t be held liable for its failure to do so. If you’re a CMP author, and a third party infringes your copyright, you had better be ready to hire a lawyer and go to court because that’s the only way your rights will be protected.

Furthermore, my experience with publishers of a similar size and structure makes me think that CMP does not have insurance coverage (which is why it doesn’t assume the responsibility of protecting its authors’ copyrights against infringement). No insurance coverage means that for any claims or lawsuits that arise, an author is on her own. If you’re an author with CMP or a similar publisher, ask to see its liability insurance policy, including the declarations page that shows the named insureds and the types and amounts of coverage.

One other provision intrigues me. It provides that the agreement is governed by the law of one state (which is called a choice of laws clause and is standard), but that the courts of another state (actually, the courts of a particular county in that state) have jurisdiction over any lawsuits (which is called a forum-selection clause and is also standard). But when the jurisdiction whose laws control is different from the jurisdiction where suit has to be filed, one gets into thorny questions about conflict-of-laws, meaning which jurisdiction’s law controls. Plus, for reasons that I won’t get into, but which deal with federal jurisdiction, there is no way to limit lawsuits to a particular county of a state because federal courts are organized according to judicial districts, not counties.

I can understand why CMP wants this contract to be confidential.


ENTANGLED PUBLISHING, LLC

According to its website and various interviews of its principals, Entangled was formed by four authors, all of whom continue to write. Their continued writing concerns me because of the potential for a conflict that it presents. An author who actively promotes his or her own writing and also publishes and promotes the writing of authors who are clients – if the clients write in the same genre(s) – has a conflict that is going to impair the client’s rights.

Another concern is that in addition to their involvement with Entangled, it appears that the principals also have other full-time jobs, which has to reduce the time available to devote to new publishing company.

Also, I don’t see that any of the principals has any specific background in publishing or related areas, such as marketing, promotion, or editorial services, beyond what they may have done for their own books. (For example, one of the principals was a free-lance editor and still is, with Entangled. Her experience may be helpful, but it doesn’t necessarily make her qualified to run a publishing company.)

What I found particularly alarming, when I did my own research on Entangled, is the information about its financial model and business practices discussed in some Q&A with its managing editor on Absolute Write (see http://absolutewrite.com/forums/showthread.php?t=207134). You can read it for yourself and draw your own conclusions.

Another note: Entangled is interested in becoming a print publisher through print on demand (POD). I question the wisdom of that model at this point, when bookstores are dying and the printed book no longer enjoys the popularity it once had. Bookstores now stock an increasingly smaller number of titles, which makes me wonder whether a publisher like Entangled can compete effectively. In addition, since PODs are non-returnable, I question how Entangled plans to get PODs into bookstores?

Here are five provisions about this contract that you should be aware of:

Point # 1:

II. AGREEMENT TERMINATION (See page 2-3)

C. … A work shall be considered in print:

i. For a fixed initial term of eighteen (18) months after first digital release;

ii. For a fixed term of twelve (12) months after first print release;

iii. If the Work is under option or contract for publication or on sale in any edition in the United States, whether under the imprint of the Publisher or a licensee.

iv. If combined sales of all Publisher’s editions, both digital and print (from whatever technology), exceed 100 copies in any 12-month period. Should sales fall below 100 copies in print and digital editions for that period, Publisher shall have the option of paying the author $500, and thereby maintaining the book in print status on such basis for an additional twelve (12) months.

(Emphasis added.)

You’ve got to be kidding me. If all the editions don’t sell 100 copies in all editions in any 12-month period, Entangled can pay the author $500 and keep the book in print for another year. I don’t know whether to laugh or to cry.

If the book hasn’t sold 100 copies in all editions in a year, the book should go out of print so that the author can get the rights back. But it’s offensive that Entangled has the absolute right to pay the author $500 and keep the book in print for another year. You will notice there is no limitation on the number of times Entangled can invoke this provision, so theoretically, Entangled can keep a book in print (under the contract) indefinitely as long as it pays the author $500 per year. What a scam.


Point # 2:

III. COPYRIGHT (See page 3)

A. The copyright in the Work will belong to the Author. It is understood and agreed that the copyright shall be secured by the Publisher in the name of the book and the Publisher is hereby authorized to take all steps required to secure such copyright in the United States of America and other countries as needed. The Publisher agrees to print an appropriate notice in each and every copy of the published work in a place and form that the Publisher believes complies with requirements of the United States Copyright Law and to require all parties to whom it grants licenses in connection with the work to do the same. The party in whose name copyright is registered shall hold for the benefit of the other such rights as the equities hereby created may prescribe. Unless it specifically agrees to do so in writing, the Publisher shall not be responsible for securing any copyright outside the United States of America.

(Emphasis added.)

The problem is that this provision conflicts with

I. GRANT OF RIGHTS (See page 2)

B. EXCLUSIVITY. Such grant of rights shall be exclusive throughout the world.

(Emphasis added.)

So even though Entangled insists on receiving a worldwide grant of rights, it will not do anything to obtain those copyrights for its author. This is important because other countries have their own copyright laws and operate under various copyright conventions and treaties, which require an author (or publisher) to register his or her copyrights (For more information, take a look at http://www.copyright.gov/circs/circ38a.pdf). This strikes me as a provision that is fundamentally unfair to an author. If Entangled insists on receiving an author’s worldwide rights, it should be committed to securing and protecting those rights for its author.

Point # 3:

IV. MANUSCRIPT (See page 4)

A. The author agrees to deliver the most recent version of the first manuscript of the Work in English language in .rtf or docx format via email to the Publisher no later than _______.

If the Work consists of one or more book, the delivery date of a draft of the second manuscript contained in the Work shall be delivered no more than twelve (12) calendar months from the date noted herewith.

Subsequent books contained in the Work shall be released within twelve (12) calendar months of the final delivery date of the previously submitted manuscript within the Work.

I realize that these provisions use 12 months as the outside number, but they should have definite dates, rather than estimates. Instead of “no more than 12 months” or “within 12 months,” the contract should state exactly when (in months) the draft of the second manuscript, for example, needs to be delivered. Likewise, the release dates for subsequent books should be specified in a number of months from the final delivery date of the previously submitted manuscript.

This is also an example of language that an author needs to narrow. Broad, vague language generally favors the publisher, so the more that an author can narrow or even remove the language, the better.

My concern is that unless those dates are specified, Entangled has complete discretion under the contract. Thus, an author could wait up to two years between books, which makes building and keeping an audience difficult, if not impossible. Readers who like the first book and look forward to the next one are not going to maintain their enthusiasm for two years. They’re going to move on to another author whose books are released more quickly.

Point # 4:

F. SUBSEQUENT REVISIONS (See page 5)

When the Publisher considers it necessary, it shall have the right in its sole discretion to call upon the Author to revise the Work, and the Author shall make such revisions. The provisions of this agreement shall apply to revision of the Work by the Author, as though any such revision were the original Work being published for the first time, except that the manuscript of the revised Work shall be delivered in final form by the Author to the Publisher within a reasonable amount of time; further, no initial payment shall be made in connection with such revision. Should the Author not provide the revision within a reasonable time, or should the Author be deceased, the Publisher may have the revision done and charge the cost of such revision against royalties due or that may become due the Author, and may display in the revised Work, and in advertising, the name of the person or persons who revised the Work.

(Emphasis added.)

This provision means that if an author doesn’t provide the revisions within a reasonable time – which is not specified and thus is subject to Entangled’s discretion – or if the author dies, Entangled can have the revisions done and charge the author (or his or her estate) for the cost against royalties that are or may be paid. I don’t like that, but it’s understandable, particularly if the author doesn’t get the revisions done “within a reasonable time.”

But what I think is really offensive is that Entangled can display in the book and in advertising “the name of the person or persons who revised the Work.” An author should not have the rights to his or her intellectual property diminished because the publisher needed to have revisions performed. I suspect Entangled’s likely response would be that someone else would not have needed to make the revisions if the author had done so, but that, to me, is an inadequate reason to give that person(s) credit not only in the book, but in advertising.

Under this rationale, a publisher could claim that it had some interest in an author’s IP based on revisions that its editorial staff made. Don’t laugh: I encountered this issue a couple of months ago when a small publisher claimed that it shared in its author’s IP based on editorial changes to the manuscript. Fortunately the publisher came to recognize that it had no claim to its author’s IP, Entangled’s provision creates the potential for an unnecessary dispute between the author and the publisher.


Point # 5:

XVIII. RECOVERABLE PAYMENTS (See page 15)

All payments made by Publisher to the Author, whether under this agreement or not, shall be chargeable against and recoverable from any or all monies accruing to the Author under this contract and for all other contracts between the parties or their assigns.

This provision is known in publishing as “joint accounting,” and you should run, not walk, away from it. What it means is that if your first book doesn’t earn out, i.e., the book’s sales didn’t exceed the amount of the advance, Entangled can recover what it is owed for that book from future books in the series until it’s been paid. Likewise for reimbursement of its expenses. Entangled can withhold monies owed from subsequent books in a series to recoup its expenses incurred on the first book. I will say again that joint accounting offers nothing remotely favorable or beneficial to an author. Only the publisher benefits, which is why the provision is in the contract. Insist that the publisher remove the provision from the contract (assuming that you’re going to sign with the publisher).

There are a number of other provisions in this contract that concern me, such as the grant of rights worldwide, rather than on a limited basis, such as North America or specified English-speaking countries.

Also, I don’t like the arbitration provision, but bear in mind I don’t like arbitration provisions in any contract. This one, though, requires the arbitration to take place in Colorado, which is where Entangled is located, unlike arbitration provisions that typically provide for the arbitration to take place in a location that is mutually acceptable to the parties. Here, besides having to arbitrate your dispute with Entangled, you have to travel to Colorado to do it, which favors Entangled at the expense (literally) of the author.

Finally, one last point about this contract. Entangled wants all rights, and agrees to divide any proceeds therefrom with the author on a 50-50 basis. My problem is that Entangled has no history of placing any of these rights (dramatic, audio, graphic, serial, etc.), and therefore has no basis upon which to determine whether the author could sell the rights on her own at terms more favorable to the author. This is where an agent or attorney would negotiate to retain these rights for the author.

I recommend you SHRED this contract (one star on my rating scale) because, between the terms of the contract and what Entangled can provide an author, you’re better off elsewhere.

On my rating scale, I give Entangled’s contract: ☆

____________________________________________

Rating scale:

☆☆☆☆☆ Very good (few revisions needed);

☆☆☆☆ Good (some revisions needed);

☆☆☆ Fair (needs substantial revisions);

☆☆ Poor (contract is heavily weighted against the author)

☆ Shred it.

___________________________________________________

Diane Holmes, I’m the Founder and Chief Alchemist here at Pitch U!Collapse

Jeff, thank you for reviewing Crescent Moon Press and Entangled Publishing.

Writers often say, “Contracts, why aren’t they written in the writers’ favor?”

Uh, because we didn’t write them, of course. Publishers (and all
businesses) write their contracts holding their own interests at heart. That’s
their job.

Our job? Look out for our best interests. And never, ever expect a contract
we didn’t write to represent what will be best for our careers.

It is always wise to be careful who you do business with and what you sign.That said, I find myself hoping that Entangled improves their contract and becomes a champion for writers. After all, they are writers themselves. So, I hope they’re able to do great things in a way that truly partners with writers and creates career-level income.

There’s a long history of writers creating (VERY) small presses to publish what they’re passionate about (not necessarily their own writing). In fact, I co-owned a small press that did this back in the day. We gave an advance and paid royalties (for short stories), back when there was no e-anything.

But always in business there is risk, that that’s the genius of your contract reviews.

Authors need to understand the risks they’re taking and make wise decisions.Many writers “trust” publishers and don’t ask any questions. They just want to be published (by somebody else, one assumes). This trust is the riskiest way to run your writing career.

Some publishers really aren’t nice to writers. I have friends who have had their careers ruined by an agent or publisher. Some just lost money. Just money! Like any writer can afford to lose the money owed to them.

But there are publishers and agents and industry professionals who love this industry, have high-integrity, and are GREAT business partners.

So, what I love most about your reviews is the subtext: you need people on YOUR side, people who can advise you, point out risk, and make sure you are as wildly successful as possible.

Jen Tanner

Jeff…thanks for another eye-opening and informative post. Diane…you’re spot on about writer’s looking out for their own best interest. Great post!

CarrieSpencer

Excellent post. Jeff and Diane, keep this series going! We need it!

Primrose3111

I don’t understand why there is anything in a contract with these small electronic and/or pod publishers about joint accounting when they don’t even pay advances??

jink

Great post!!!

Sue T

Wow. I know a bunch of reputable agents who have sold clients’ work to Entangled. Wonder if they got these provisions changed? I do, often, wonder about authors writing and publising books and doing the same for others and how they manage the conflict of interest. So far, though, I haven’t heard of issues. Authors with Entangled seem to be pretty content.

Lily C

I’m not sure if I would want this guy negotiating any of my contracts. As most of that is all standard clause. Has he seen any of the big NY publishing contracts, like Harlequin? POD is actually returnable, by the way.

Not all contracts are perfect. The joint venture throws me off because there is no advance to even worry about. Probably just standard clause.

Also, agents are making deals with Entangled left and right— reputable agents. Obviously they don’t have any problems with the contract, and a good agent looks out for their authors. All the Entangled authors are really happy and content. Just look at their blogs and twitter feeds.

Also, many agents and editors have their own separate writing careers. Is there a conflict of interest there, too? I don’t think so. Many people is this business are passionate about writing and reading, and wear many, many different hats.

This was an eye opening post, but not how it was attended. I think some research on pub contracts is needed before giving opinions.

Oy!

Oy.


WriterGirrrl

This seems like a basic contract, the boilerplate, that’s probably given to most authors. Depending on if there’s an agent involved and who the agent is, they will work to change some of the more onerous provisions. Some agents may just let it go through, figuring they’ve got nothing to lose since there is no advance. Why bother to hustle for no payment? For the possibility of a future 15% of 5% or similar? Not worth the time to negotiate better, and if their client wants the deal what do they do? Tell them no?

My main objection is referring to these placements of materials with such presses as “sales.” They are not sales. They’re not paying anything for these books. Authors are so desperate to be published that they’ll accept the terms, which just incites more publishers to offer similar crappy terms.

The commenters are correct in that a lot of NY editors and agents have writing careers on the side. However, these editors also have a company structure behind them that supports the business side of the publishing. Their day job isn’t a hobby or something they do on the side — the writing is the sideline. No matter how well meaning a group of writers is, their limited experience and exposure to publishing doesn’t qualify them to become publishers. But this isn’t stopping a whole cadre of people from jumping in, claiming they can “do it better than NY publishing,” when their ignorance is going to lead them into complications they can’t even imagine.

Without a corporate structure behind them, these publishers at best will stumble along, learning their trade on the backs of the writers they publish. Some may survive and thrive. At worst, the writers will be screwed and unhappy with the outcome as it won’t live up to expectations.

When I worked in a bookstore, pod books were not returnable. That was the whole point. We did not allot shelf space to them, as they were mainly self-published books with little or no quality control. I would be surprised if that has changed now. To take back books there needs to be a whole distribution system (small publishers sign up with distributors or larger publishers to distribute) which is pricey. I doubt a small startup is in a position to pay for distribution. Or sales staff.

We are in an exciting time now, and there are more opportunities than ever before for both success and heartbreak. I wish this small press well. I wish RWA was as proactive as it used to be when it came to publishers. When Kensington started their imprint in conjunction with WalMart, and paid authors “only” $3000. per book, there was a huge outcry about underpayment. But people couldn’t wait to sign up because they wanted to be published. Now, they are lined up for no money at all, and RWA says nothing. Boo.

And back in the day, the RWR used to have a column by an attorney who went through contracts in just this way and commented on the good and the bad. They don’t do that anymore, either.

I want to thank this blog and this attorney for pointing out some of the problems in this contract and others. Don’t shoot the messenger. The basic contracts for big NY publishers are awful, too, but you know what you’re going to get there, and if you have a brain you get an agent.

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7 responses to “My Original Post on Crescent Moon Press and Entangled Publishing’s Contracts”

  1. Jeffrey V. Mehalic says :

    Jen,

    Thank you for your kind words and support.

  2. Jeffrey V. Mehalic says :

    Carrie,

    Thanks for your kind words and for doing such a good job on designing my blog!

  3. Jeffrey V. Mehalic says :

    Primrose3111,

    You’re right about the advances, but the joint accounting provision also applies to reimbursement of expenses, and enables the publisher to recover all of its money before it pays the author a penny.

    Take care.

  4. Jeffrey V. Mehalic says :

    Jink,

    Thank you very much.

  5. Jeffrey V. Mehalic says :

    Sue T,

    Thanks for your comment. If a writer is satisfied with the contract he or she (or his or her representative) negotiates with a publisher, then that’s great. My concern about these contracts, or any others, for that matter, is that writers don’t have enough information or knowledge to be able to negotiate effectively, which gives a publisher a tremendous advantage because it wrote the contract.

    Take care.

  6. Jeffrey V. Mehalic says :

    Lily C,

    Thank you for your comment. I’ll repeat what I wrote above, which is that if a writer is satisfied with the contract that he or she or a representative negotiates, then that’s what matters for the writer.

    But many times a writer signs a contract because he or she doesn’t know the effect of what they’re signing — and the publisher doesn’t explain the punitive effect of some of these provisions — or the writer is desperate to be published, and ends up stuck in a relationship that hurts, rather than helps, their career.

    I agree that no contract is perfect, but fortunately perfection isn’t the standard. As long as a contract is fair to both sides, then it’s accomplished its purpose.

    Take care.

  7. Jeffrey V. Mehalic says :

    WriterGirrrl,

    Very well said. The dynamic of the author-publisher relationship is that the author has more at risk. Self publishing and electronic publishing are changing that somewhat, but the fact remains that a bad contract is going to hurt an author far more than it hurts the publisher.

    And I agree that an agent or editor who is also a writer has a conflict of interest. The way to address it is by full disclosure. If a writer is willing to be represented or edited by someone who may be or may become a competitor, then that’s the writer’s decision. But if the agent or editor doesn’t disclose that he or she also writes, the writer is at an unnecessary competitive disadvantage — and the last thing a writer needs is another competitive disadvantage, particularly from someone who’s supposed to be helping them.

    Thanks again.

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