Alright, let’s talk about this, because it’s amusing. To set things clear, I first saw a version of this contract in the early part of this year. However, at the time, while I warned the author away from doing business with them, I was not allowed to publicly speak about it. Since everything was shared on a confidential basis (no NDA signed by any party though), I ethically could not speak.
Only when the author came back to me and told me I was allowed to put them on blast did I do so. I started with a simple post to the LitRPG Author’s Guild and an e-mail to Victoria @ Writer’s Beware. After that, I went about my workday (I do have a day job…) and by the time I got back to it all, Mysterious-Smell9729 had posted a contract in Reddit’s ProgressionFantasy (https://www.reddit.com/r/ProgressionFantasy/comments/1poe338/psa_shadow_light_press_contract/)
It really wasn’t me, and it was a very good PR move to post the entire contract since it started the ball rolling really (with many, many other posts, comments, retractions, etc.).
None of that is the reason for this business post though. I’m actually going to break down the contract (see above link) and what I see. Now, this isn’t legal advice, I am not a lawyer and do not play one on TV. I just have some experience with law, contract language and I read them for fun (and also keep a database of contracts I have been sent so I can compare).
What can I say? It’s fun. And it can (occasionally) be helpful. Oh, and before the breakdown… if you do want help with a contract or questions, ping me. I can’t say I’ll help everyone, but what I can do, I will.
I’ll likely do a bigger post with resources, etc. later too (many of which are free).
Lastly, PLEASE even if you get advice from others, hire a lawyer who specialises in IP Law (with experience in publishing contracts). The reasons for that specificity will make itself known in blog post 2.
Alright, now we’re really ready to talk about it.
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Please note, bolding is mine.
This Publishing Agreement (“Agreement”) is made between Shadow Light Press (“Publisher,” “we,” “us,” or “our”) and ___________________ (“Author”) regarding working titles __________________ together with its characters, settings, storylines, and IP (Intellectual Property) universe, including all subsequent books in the series, any works set in the same fictional universe, and any adaptations or reimaginings in any format now known or later developed (collectively referred to as the “Work” and individually as “Title”).
First off, this takes everything – the entire universe. This is not just a contract for the series you’ve written, but anything you’ll ever write in that universe. Want to write a standalone novel set in the universe? It’s included in this contract.
Want to guest star a character in another series? Be careful, that character is part of this contract.
Want to write a short? Ooops… included too.
This is NOT standard. Some webserial contracts try this, but this is non-standard by far. Terrible, should never be signed and should be redlined.
The Introduction is garbage, not part of a contract. Very unprofessional to include, and (see, not a lawyer) I wonder if it might affect how the contract is read if it was brought to court. Anyway, ignoring. Moving on.
License and Term
a. The Author grants to the Publisher the exclusive, irrevocable license to publish, reproduce, distribute, sell, adapt, modify, publicly display, publicly perform, and otherwise exploit the Work (as defined above in “Parties And Scope”), in whole or in part, in all formats, languages, and editions now known or later developed, including but not limited to print, digital, audio, derivative works, media adaptations, and merchandise. This license includes the right to license, sub-license, assign, or otherwise transfer any or all rights granted herein, in the Publisher’s sole discretion, in the ordinary course of publishing and distribution.
This is what is known as an ‘all rights’ contract. If you work with traditional publishing (specifically, the ‘big 5’) you can expect to see an ‘all rights’ contract crop-up.
So a few things, I’d point out. The word ‘irrevocable’ without an addition like ‘within the Term’ is very strange. It’s possible to mean that it can never be removed, even if the contract is taken out (and why you’d want to be specific). I’d assume, if you took this to court, it would NOT play out in the publisher’s favor, but again – that line ‘within the Term’ would clarify things nicely.
Now, talking of the all right’s agreement. While the big 5 might ask for all rights (including subsidiary rights), you do not need to grant it to them. Like anything in business, it is a negotiation (great big dumptrucks full of cash can change many minds), so whether you grant them those rights or not will be dependent.
However, what is commonly argued over these days include:
- translations (foreign language rights)
- special editions (thank Brandon Sanderson for that)
- audiobooks (or, if you want to get narrower, audiobooks and full cast audiobooks and radio plays)
- performance rights (TV, film, plays, etc.)
- merchandising
Next up, we have the license, sub-license, assign and otherwise transfer line. Some variant of this line is often in most contracts (especially if they intend to sub-license the audiobook to another party); but you’ll want some guardrails around this. It’d be easy to sub-license a work for $0, at terrible rates, to a non-arms length company and never pay the author. So, guard rails (often deeper in the contract) can help; but also…
You can never block every exploitation (unless you’re signing a 100+ page document and even then, humans are endlessly inventive), so it matters WHO you sign with just as much.
That said, moving on….
b. The initial term (“Initial Term”) of this Agreement shall be ten (10) years, commencing on the Effective Date. The Term shall automatically continue for an additional ten (10) Years upon the Publisher’s receipt of any new manuscript or project from the Author covered by this Agreement or any other publishing agreement between the Parties. Such continuation shall apply to all Works covered by this Agreement and any other publishing agreement between the Parties, and the Term for all such Works shall run concurrently from the date of the Publisher’s receipt of the most recent qualifying manuscript.
This is a terrible, terrible term. It’s added a wrinkle of ‘auto renew’ for any manuscript or project or any publishing agreement. And it renews for 10 years. So if you wrote a short story in universe, you’d have to give it to them and you’d renew your entire contract for 10 years from date of the short story being submitted.
If you made another agreement for a different series, it’d also renew this contract.
You would, in essence, not be able to write ANYTHING in this world till your contract ran out, or else run the risk of them triggering a renewal.
Incredibly bad. And it gets worse.
Oh, and one thing worth noting, to understand how bad a contract is, you need to read it all; from start to finish because it layers upon one another, sort of like a cake.
A giant shitcake in this case.
3. Marketing and Services.
a. Comprehensive Services: The Publisher will handle editing, cover design, formatting, and marketing at no cost to the Author*.* The publisher also provides, on an as-needed basis, developmental editing, agent services, and career coaching, supporting authors in building long-term success. These services, typically offered by third party services and agents, are included as part of our hybrid publishing approach. We believe this comprehensive support being available is essential for an author’s growth and success.
Firstly, this is contradictory. ‘Editing’ at no cost, but ‘developmental editing’ is provided as needed? Confusing, to me. Furthermore, the mention of ‘hybrid publishing’ always put me on edge. But, the fact that there’s no cost, is pretty standard (or should be!). So, fine.
The next line about Marketing, I won’t C&P over because it’s mostly fine. There’s no discussion on penalties if you can’t though, or what happens if you don’t want to. Other contracts say ‘within reasonable standards’ or might even mention not needing the author to undertake promotions at all. This one, I might want to add a small line about making sure there’s no breach if, for example, I had to go into surgery.
Especially considering the breach subjects (see below).
4. Revenue Sharing / Author Royalty
ii. Specialized Expenses – Costs incurred for the Work beyond initial editing, formatting, and cover design. These may include (but is not limited to) narration and production of audiobooks, creation of second-edition covers, substantive revisions or rewrites after publication, conversion into other media formats (e.g., scripts, graphic novels, light novels), third-party agent or licensing fees, and any illustrations for graphic novelization. Publisher maintains reasonable discretion to assign expenses to this category.
Let’s set aside the discussion of whether publishers should even be charging authors for this, just yet, but note the bolded side. Remember this line.
b. Cost Recoupment
i. The only costs that shall be recouped in advance, and in full before any other payments are made to the Author, are Marketing Costs and Specialized Expenses.
ii. Internal Costs shall be tracked by the Publisher and recouped from the revenue before any royalty rate increases apply.
Let’s be very clear. Publishers should not charge authors any costs. The point of being a publisher is the fact that you are taking a risk on the new work, for a portion of the future royalties. If you charge the author for the costs, you remove a majority of the risk on your side (as a publisher) and thus, remove any reason for you to take any royalty.
If you aren’t willing to take the risks, you shouldn’t be playing in the game.
I could break this down further, but really, this is getting long. And this entire section should, again, be deleted.
c. Net Revenue Definition
i. For purposes of this section, “Net Revenue” means all revenue actually received by the Publisher from exploitation of the Work in the relevant format, less (1) any applicable taxes, transaction fees, refunds, or platform commissions, and (2) any Marketing Costs and Specialized Expenses that are to be recouped in advance.
So, math time! The book earns $200. The Publisher spends $100 on paid ads. Your Net Revenue by this definition is $100. NOT $200.
d. Royalty Rates
i. Ebook and Print Editions – The Author shall receive 40% of Net Revenue until Internal Costs related to the Work have been fully recouped by the Publisher, at which point the rate shall increase to 50%.
ii. Audiobook Editions – The Author shall receive 20% of Net Revenue until Internal Costs have been fully recouped by the Publisher, at which point the rate shall increase to 30%.
So, I have thoughts about ebook royalty rates being 60/40% or 50/50% or worse, for publishers and author respectively). I’ll go into more detail about those views in the next blog post, but I will say that for independent publishers (small pub) which are digital first, both these numbers are not entirely uncommon. I’ve heard of individual authors getting better (30/70%) but that comes with its own downsides. See next blog post.
Now, it’s nice that there’s a ‘tiered’ system here. I like them, especially if you hit specific sale units and/or $ amounts. They can be quite useful, but I would say more tiers would be great.
Audiobook edition rates are terrible. This is 20% to authors, and what I’ve seen people like Podium and Tantor offer to some beginner authors that don’t know better. You can do better, by far.
Furthermore, since the Publisher can sub-license the audio, there is ZERO cost for them in that case. Which means they are taking 80% of whatever advance and royalties another audiobook publisher might give you. For absolutely nothing.
Terrible, terrible deal. At the very least, if I was even negotiating that, I’d have different terms about HOW sub-licensed amounts come in.
iii. Other Forms of Media (including but not limited to film, television, stage adaptations, or merchandising) – The Author shall receive 50% of Net Revenue after all Internal Costs, Marketing Costs, and Specialized Expenses have been recouped by the Publisher.
Weirdness here, because Net Revenue you’re already taking out Marketing and Specialized Expenses, so why is it mentioned twice? Unless you’re trying to charge twice? But that doesn’t seem right, since recouped is a specific term.
Just weird.
5. Termination, Breach, Reversion, and Future Earnings
a. Breach Notification and Cure Process
Not quoting, since breach terminology in my experience has varied a bit. It’s pretty standard, beyond the use of arbitration to determine if something is a material breach or not. By not specifying what a material breach might be (mostly for the Author) there’s an expense involved in hiring the arbitrator that puts the Author in a terrible position.
Not great, would change and/or remove.
b. Termination Upon Breach
i. If the Publisher Is in Breach:
2. The Publisher shall retain all revenue and rights derived from such sublicenses for the duration of their contractual terms.
Uhhh, if I’m reading this right – if the publisher is in breach, anything sublicensed (say an audiobook agreement’s advance) is theirs. And all royalties afterwards too, so if it’s 10 years audiobook agreement, it’s theirs.
Also, would it not mean that because they can assign and sub-license without asking, they could assign a sub-license to themselves / another company, and then keep the right anyway?
(PLEASE note, I’m uncertain about this. I’ve not read this part before, and a proper lawyer should weigh in on this, but it’s how I read it).
ii. If the Author Is in Breach:
1. No rights shall revert unless and until the Author repays to the Publisher an amount equal to all direct, unreimbursed costs actually incurred by the Publisher in connection with the Work, multiplied by three (3). The parties acknowledge and agree that this multiplier is intended as a reasonable pre-estimate of the Publisher’s damages resulting from breach, reflecting not only direct costs but also anticipated overhead, risk exposure, and unrealized revenue opportunities, and is not intended as a penalty
2. Until such repayment is made in full, the Publisher shall retain all rights to publish, distribute, and exploit the Work without restriction.
3. The Future Earnings Obligation in subsection (d) shall apply in full.
Not sure if the direct matters, or how much ‘wiggle room’ it would give the Publisher. The fact that any costs is being repaid by three (3) is terrible. Never seen that before.
In the meantime, while you’re getting an accounting and arguing about costs, they’re exploiting your rights. And oh, yeah… the Future Earnings Obligation comes into play.
Huge red flag. Not standard at all. Redline.
There are other ways to handle this, by far.
c. Reversion Without Breach
ii. If the Agreement is terminated early by mutual written agreement, reversion shall be conditioned on repayment of all direct, unreimbursed Publisher costs, multiplied by three (3), and application of the Future Earnings Obligation in Section 5(d).
Oh, you’re trying to get out of this terrible contract? Too bad, you still have to pay 3x their costs and pay them in the future.
d. Future Earnings Obligation
i. If rights to the Work revert to the Author as a result of the Author’s material breach of this Agreement or by early termination, and the Work or any derivative works are subsequently monetized by the Author or any third party, the Publisher shall receive twenty percent (20%) of all Gross Author Revenue from such monetization for a period of five (5) years following reversion. For purposes of this clause, “Gross Author Revenue” means all amounts actually received by or credited to the Author (or any entity controlled by the Author) from the exploitation of the Work or derivative works, before deduction of any expenses or commissions.
iii. The parties acknowledge and agree that this continuing participation is a fair and reasonable allocation of revenue in recognition of the Publisher’s original investment, editorial and marketing efforts, and the enduring commercial value created under this Agreement.
So, you cancel the contract but then have to pay 20% of GROSS AUTHOR REVENUE. Which is defined as revenue before deduction of expenses or commissions. Which would mean that any advertising expense you have, any agent fees (if you have one) or anything else cannot be taken out.
But, wait, you say, don’t they take marketing expenses out? Why yes, Timmy, yes, they do.
Oh, and I highlighted the last line of iii. because I found it so hilarious.
e. Reporting and Payment
i. The Author shall deliver accurate semiannual royalty statements and remit any payment due to the Publisher within thirty (30) days after the close of each reporting period.
ii. If payment and accurate reporting are not received within that time, the Publisher may issue written notice specifying the breach. The Author shall have thirty (30) days from receipt of such notice to cure the breach.
iii. If the breach is not cured, the Publisher may suspend the effect of the reversion and temporarily reinstate its distribution and commercialization rights to the Work until the account is brought current. The Publisher may also recover all unpaid amounts plus an additional sum equal to twenty-five percent (25%) of the revenue received from the Work during the period of noncompliance, which the parties agree is a reasonable pre-estimate of damages caused by delayed or withheld payment.
Oh, look. You get to put together reports for them for 5 years, because of the money you owe them for Future Earnings. And if you don’t, they’re going to take back all rights and charge you 25% MORE. So they’re now taking 45%.
This section is just a giant redline.
6. Author Direct Sales / Author Copies
b. If the Author engages in substantial direct sales of Publisher-produced editions of the Work—defined for this purpose as (a) listing such editions on third-party platforms (e.g., Etsy) or (b) selling more than fifty (50) units in any ninety (90) day period, including but not limited to sales at conventions or online—the Publisher shall be entitled to its standard royalty share on the net receipts actually received by the Author from those sales, as set forth in the Royalty section of this Agreement. “Net receipts” means all amounts received by or credited to the Author from such sales, less only actual shipping charges and applicable sales taxes collected from the customer and remitted to a taxing authority.
This and the next section basically means that if you sell more than 50 copies, list it online or on your own site and sell copies, you have to pay them a royalty rate for those copies. They might charge you above cost, so that they can get their cut beforehand. This isn’t exactly egregious, since getting copies for resale on other contracts are generally just done at ‘wholesale’ prices.
7. Series Commitment: The Author shall deliver a minimum of _____ manuscripts in the Series, each of which shall be subject to this Agreement and all rights and obligations herein. This minimum does not limit the scope of this Agreement; any additional manuscripts that form part of, are derived from, or otherwise fall within the definition of the Work or the Series shall also be covered by this Agreement.
Just a reminder that this entire thing restarts every time you send a manuscript. So if you signed for 5 manuscripts, sent them every 2 years, when you get to manuscript 5, it’s still 10 years left.
10. Payment Schedule: The Author shall be paid their full share of profits on a quarterly basis, with adjustments made for anticipated marketing expenses, service costs for upcoming releases, and additional related expenses. These adjustments will be estimated by the Publisher to ensure sufficient funds are available to support the continued promotion and success of the Work. It is important to understand that distributors like Amazon typically impose a delay of several months on royalty payments. These initial royalties are often reinvested into marketing efforts to bolster the series’ success. This approach continues until sufficient funds are accumulated, allowing for the distribution of profits.
I quoted this whole section, because remember that part in 4 (ii), Specialized Expenses about ‘within reasonable discretion’? Well, note how you don’t have audit rights here. They could assign anything in there, and you would not have the right to audit the books to tell WHY and how much was actually charged.
Ooops.
Never mind the fact that you should have an audit clause anyway, but when they are charging expenses? Not being able to audit them is a huge red flag.
Then, you have this entire section about ‘service costs for upcoming releases (taking money for covers for new books for example), ‘anticipated marketing expenses’ which could be anything and doesn’t HAVE to be spent and can change at the publisher’s expense. This entire section is just… ugh.
Tradpub will withhold for printed copies (what they call the reserve fund), but in a good contract, that amount is designated and limited. So it might be, for example, 5% of royalties received. This has NO guardrails on what could be set aside, for now and for the future and what they could call expenses.
11. Creation of Derivative Works (Unfinished Series Clause).
b. Creation of Derivative Works: In the event that the Author is unable or unwilling to continue the series for any reason—including, but not limited to, health concerns, personal circumstances, or death—the Publisher shall retain the right to produce derivative works based on the original Work and its universe. This includes, but is not limited to, prequels, sequels, spin-offs, adaptations, and other content utilizing the characters, setting, and intellectual property established in the series. This clause ensures the long-term stewardship and expansion of the intellectual property while honoring the Author’s contributions and ensuring ongoing benefit to their estate.
They can steal your universe, write in it or IF you finished the series, it sold really well and they want to milk the series more, even if you don’t agree…. they can STILL force you to write in it. Or they can use an AI writer.
i. the Publisher will make reasonable efforts to consult with the Author in good faith regarding the selection of such writer.
ii. The Author shall be notified in writing of any proposed ghostwriting or continuation arrangement and may issue a written veto within seven (7) days of notice, provided such veto is not unreasonably withheld and includes a written intent to continue the series within a commercially reasonable timeframe, not to exceed eighteen (18) months. If no such veto is received within the seven-day period, the Publisher may proceed at its sole discretion. Notice shall be deemed delivered upon sending to the Author’s last known email address. A lack of response shall not delay or prevent the Publisher’s right to act.
You get 7 days. If you don’t answer them, they’ll do what they want. And if you do, the ONLY way to stop them is to use a ghostwriter.
As a writer, with completed series, this one makes me want to vomit.
c. Profit Sharing for Derivative Works: If the Publisher elects to continue the series or create derivative works with a new author, the original Author will receive a share of the net profits remaining after deduction of reasonable production costs. This share will be determined by the Publisher in good faith, taking into account prevailing industry practices at the time, the extent to which the new work draws upon the original Author’s material, and any other relevant factors. The intent of this provision is to ensure that the original Author is fairly recognized and rewarded for the enduring value of their contribution, while allowing the Publisher the flexibility to produce new works sustainably. This amount typically ranges from fifteen percent (15%) to twenty-five percent (25%) of net profits, adjusted to reflect the extent to which the new work draws upon the original Author’s material.
Oh, look. You get 15-25% ON THEIR DETERMINATION.
14. Artificial Intelligence Compliance
I’m not quoting. It basically says that they’ll do what the law says (uh, duh?), and that’s it. Not that they won’t use it, just that if the law says stop, they will stop.
15. Confidentiality.
a. Confidential Information: The Author agrees to strictly maintain the confidentiality of all proprietary and confidential information disclosed by the Publisher during the term of this Agreement. This includes, but is not limited to, financial details, marketing strategies, unpublished content, and any other sensitive information, including but not limited to all of the details of this Agreement. Disclosure of such information by the Author is prohibited unless expressly authorized in writing by the Publisher on a case-by-case basis.
b. Duration: The Author’s obligation to protect and maintain the confidentiality of the information shall remain in effect indefinitely, surviving the termination or expiration of this Agreement.
So, some confidentiality stuff is fine. Royalties, financial details, even cool marketing strategies (or personal information of say specific influencers). Not talking of this agreement, however, while common (sadly); is also terrible. ESPECIALLY because of cases like this where they can’t even ask if they got shafted.
Oh, and this is forever.
This is one of those clauses likely to be tossed in court. But see below…
16. Non-Disparagement: Both parties agree that, during the term of this Agreement and for two (2) years thereafter, they will not publish or communicate, nor cause others to publish or communicate, any disparaging, defamatory, or materially negative statements about the other party, including their affiliates, employees, or business practices, whether publicly (including but not limited to social media, forums, publications, or interviews) or privately to third parties.
I hate these clauses. This is a gag order so you can’t say bad things, even without details, about them. Also, it lasts for the term (remember that rolling term?) and 2 years.
18. Dispute Resolution: In the event of any dispute or disagreement between the parties arising out of this agreement, the parties shall first attempt to resolve the dispute through good-faith negotiations. If the dispute cannot be resolved through negotiation, the parties agree to submit the dispute to mediation. If mediation fails, the dispute shall be settled by binding arbitration under the rules of the American Arbitration Association.
So, you have to negotiate. Then get mediation (who pays?). Then arbitration.
While some of the NDA and non-disparagement stuff might not hold up in court, you might not have a choice but to deal with arbitration first. And that (in general) has often favored the company.
Also, this has to happen in Phoenix, Arizona.
19. Non-Competition: During the Term of this Agreement, the Author shall not publish, distribute, license, or sell any work that is substantially similar to the Work, or that features the same or materially similar characters, settings, plot, themes, or other protectable elements of the Work, without the prior written consent of the Publisher. This restriction is intended to preserve the commercial value of the Work and to prevent market dilution or confusion with competing content. For clarity, this provision does not prohibit the Author from creating and publishing original works that are wholly unrelated in characters, settings, and intellectual property to the Work.
So, this is a terrible non-compete. Very broad, potentially quite limiting. See, the issue is that you can’t write anything that ‘materially similar’ to ‘settings, plots, themes’. Which, when you think of what a setting is (Scifi? LitRPG) or plot (Hero’s Journey) might mean not writing at all. Not without going into really random other genres.
At the narrowest, you probably wouldn’t be allowed to write a LitRPG without signing a contract with them.
20. First Look
a. Because the Publisher and Author have an established working relationship, the Author agrees to offer the Publisher the first opportunity to review and consider any new manuscripts created during the Term of this Agreement before offering them to other publishers or proceeding with self-publication.
b. If the Author receives interest or a formal offer from a third party for a new work during the Term, the Author will first share the details of that opportunity with the Publisher. The Parties will then engage in good-faith discussions for thirty (30) business days to determine whether they wish to proceed together on the project.
So, this is a first look clause, but it’s for ANY work. Not just confined to scifi or fantasy or LitRPG, but if you wrote a romantasy, you’d have to show it to them. They could then bid on it, and counter/try to match any terms for any third party publishers and basically, slow you down for 30 days.
Not great, and too broad; but actually not the most onerous item here. I’ve seen worst option clauses (though it is made worse by the auto-renewing term). Also, don’t forget that the term itself will renew for your original work if you sign.
Sample Costs of Production
Some of these are really high, some are what I figure should be fine. Don’t forget that anything they put in here, can be used to justify expenses and why you can’t go to your next tier. And you can’t audit them to say ‘Hey! You didn’t spend that much’.
It’s not even a material breach of contract if you do that.
Okay, there’s a lot more to write. Mostly about the things that aren’t in here (like the audit clause but more); but this is a HUGE file. I’ll be tackling those aspects in the next 2 blog posts anyway, so keep an eye out.
Oh, and if you’re a lawyer and want to correct anything I read here, do tell me. I’ve been told (many times) that what I think something says is not right (by actual lawyers) or that I don’t have to worry about it because something else in the contract has neutered my concern.
And no, I don’t know when I’ll get to the next blog post. Probably soon, because I’m having fun, but no guarantees.
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