Why Del Rey and I will be parting ways - from Michael J Sullivan

[........]

https://www.reddit.com/r/Fantasy/comments/6f1v96/why_del_rey_and_i_will_be_parting_ways/

Snip:
So what's the problem?
We are in a catch-22 because both of us see the audio rights as extremely valuable and refuse to let them go. To give you a little background, I always try to limit the rights transferred in the primary contract. This is why I only do "World English" or "North American English" and attempt to reserve my audio rights.
When The Riyria Revelations contract was negotiated I asked my agent to retain the audio rights, she said it was a "deal breaker" for them so I caved. Same thing happened with The Riyria Chronicles. Orbit ended up selling that right to Recorded Books (a transaction that at it's most took them 10 - 15 hour to do) and the result is that I've had to split more than $145,000 with them 50/50. Not only that, but Recorded Books recently renewed the contract for those books for $400,000 and you guessed it. I only get $200,000 of that money. That kind of "hit" hurts...greatly.

Snip:
She wanted to make sure Del Rey realized that the audio books were sold, so they knew what they could have and what they couldn't -- basically the same as the last contract. As you might have guessed, the response came back that the CEO at Penguin Random House has made a corporate wide decree that states, that editors with their imprints (including Del Rey) are "absolutely, and with no exceptions, forbidden to strike deals anymore that do not include audio rights."
Now, do I really think there are "absolutely no exceptions"? No. If Rowling or Stephen King wanted to keep their audio rights, I'm sure they would be able to. Likewise, if an author is selling very little in audio, I'm sure they wouldn't care if they were kept. But I seem to be in that spot where I'm not "big enough" to waive audio and my audio sales are too large for them to ignore.
And, so that, as they say is that.

[Dolphin]

Certainly fits with the trend of tradpub houses refusing to consider more piecemeal contract negotiations like Bella Andre and Hugh Howey got back when rocks were soft (e.g. like five years ago). I wonder if they'll move on to insisting on foreign/translation rights at some point.

[EllieDee]

Looks like the publishing companies are propping up their shrinking profits by snatching up audiobook sales.  If tradpubs were doing better in today's market, would they resort to these strongarm tactics?  Hah, probably!  But they might also be more willing to give authors like Sullivan (great sales, but not a superstar like King) some leeway in these contract negotiations.

I'm glad that he's laying the groundwork to get the other books in the series out, one way or another.  His fans won't care if the novels are indie pubbed.

[carrie 123]

I think other publishers are going to be falling in line and doing the same thing. They want the audio rights but they're not prepared to pay more for them. I'm sorry it didn't work out for him, but I think he made the right decision.

Thanks for sharing.

[MKK]

The full reddit thread is well worth a read. Thanks for posting it. It's nice of Michael Sullivan to share his experiences.

[she-la-ti-da]

He used to post here, back in the day. It's a shame about the audio rights stuff, the "big whatever" just want it all, and don't really want to pay for it. I think with his fan base, he'll do fine on his own and I wish him the best.

[Douglas Milewski]

Publishers are in the business of acquiring and exploiting rights. They'd be fools to ignore money on the table.

[Jim Johnson]

Publishers are in the business of acquiring and exploiting rights. They'd be fools to ignore money on the table.

True, though the more they refuse to negotiate, the fewer writers are going to be willing to work with them. It's great that Michael is airing this. The more writers that detail tradpub's lousy deals, the better informed writers will be to make decisions that are best for their business.

[Douglas Milewski]

Even this far into the ebook revolution, the big publishers still have a target rich environment, the target being writers. I've been working under someone who went to a good business school, and he's been teaching us about how to deal with business partners. In short, their strategy is always to charge more, shift costs onto us, and dictate the terms as much as possible. I see the exact same thing happening here. As business people, we must always look to charge them more, shift costs onto them, and to dictate terms as much as possible. That's the modern business relationship.

[Cassie Leigh]

He used to post here, back in the day. It's a shame about the audio rights stuff, the "big whatever" just want it all, and don't really want to pay for it. I think with his fan base, he'll do fine on his own and I wish him the best.

Yeah, he will.  He sold those audio rights for seven figures which made walking away from the print contract well worth it.

[Elizabeth Ann West]

Is he the one who's wife ran a publishing company that didn't close very well because his books took off?

Regardless, I don't find the tone and content very professional. He's mad the publisher he works with wants to...stay in business? I mean really, a larger publisher has to have some projects over deliver to cover the costs of those that do not. It's part and parcel. Great, the third party audiobooks company situation from his point of view is going great, but he really has no idea what was involved with those negotiations. He assumes. And of this didn't go well or the company went belly up, I'm sure he sure expected that in house cousel of Penguin to take care of the problem....

Nothing wrong with wanting more of the pie for yourself, but let's be real here. He used to run the whole shebang indie, went trad pub is now unhappy the contracts he signed are paying him exactly what he agreed to get. Don't know any indies getting a $400k offer on rights from an audiobook company. Sure some indies are cleaning up in Audio rights on dozens of titles but there was not advance or additional infrastructure to protect them if things go sideways.

Going trad pub means you get some bennies but there's always a cost.... All I'm saying is go back through the Kboard archives I think his wife's name was Robin. I remember there were some very unhappy when that whole thing unraveled.

[AliceW]

Is he the one who's wife ran a publishing company that didn't close very well because his books took off?

I don't know about that but I do know he runs kickstarters for his indie titles. Usually raises 10-50k to self publish ONE title, effectively paying himself an advance and not having any up front costs. There was one kick starter where he raised so much money he took his wife on a nice holiday. It's a sweer business model if you can pull it off.

This scenario does make me wonder that if he were full indie (and never went trad) would he ever have negotiated a 400k audio book deal, to then complain he only got 200k? I've not heard of any indies getting that much for audio rights. Out of curiosity, does anyone know of comparable indie deals for audio?

[Cassie Leigh]

I know someone mentioned in another thread that they'd heard of a six-figure audio deal for an indie, but not sure where in the six-figure range that one fell.

Yes, his wife ran/runs a publisher and acts as his agent I believe.

I think he's calling it out because it's something that could have made that publisher and him money but they chose to take a hard stance on audio rights even though a print-only deal with him would've been profitable for both of them.

[Jim Johnson]

I think he's calling it out because it's something that could have made that publisher and him money but they chose to take a hard stance on audio rights even though a print-only deal with him would've been profitable for both of them.

Yeah, it's an example of the extreme rights grabs some companies are attempting. Some writers might be fine with that and accept it as business as usual, but all writers need to go into negotiations with tradpub with wide eyes and be aware of what you're negotiating and what the company might be asking for.

If nothing else, get yourself a copy of The Copyright Handbook and study up if you don't also get or have an IP lawyer in your corner.

[MikeRyan]

I agree with Elizabeth and Alice. Complaining about only getting 200k doesn't seem to be in good form. If it's that important, that's what negotiations are all about. If they insist on that audio percentage, negotiate a higher fee for yourself on other platforms. I don't think calling out a company over what seems like normal negotiations is really a sound strategy. I don't know what the normal percentage for audio rights for publishers usually is, but 50% sounds like a good deal...I could be wrong though.

[WHDean]

Is he the one who's wife ran a publishing company that didn't close very well because his books took off?

Regardless, I don't find the tone and content very professional. He's mad the publisher he works with wants to...stay in business? I mean really, a larger publisher has to have some projects over deliver to cover the costs of those that do not. It's part and parcel. Great, the third party audiobooks company situation from his point of view is going great, but he really has no idea what was involved with those negotiations. He assumes. And of this didn't go well or the company went belly up, I'm sure he sure expected that in house cousel of Penguin to take care of the problem....

Nothing wrong with wanting more of the pie for yourself, but let's be real here. He used to run the whole shebang indie, went trad pub is now unhappy the contracts he signed are paying him exactly what he agreed to get. Don't know any indies getting a $400k offer on rights from an audiobook company. Sure some indies are cleaning up in Audio rights on dozens of titles but there was not advance or additional infrastructure to protect them if things go sideways.

Going trad pub means you get some bennies but there's always a cost.... All I'm saying is go back through the Kboard archives I think his wife's name was Robin. I remember there were some very unhappy when that whole thing unraveled.

Agreed. This is not a swindle; it's buyer's remorse. By his own admission, no one tricked him. He knowingly took the deal that included audio because, at the time, he wanted the Del Rey print deal more than he wanted to preserve his audio rights. Now that he's doing better, he wishes he hadn't. But would he be in the same place if he hadn't? Who knows? This sort of thinking leads only to resentment, which has never done anyone any good.

   

[Jim Johnson]

Agreed. This is not a swindle; it's buyer's remorse. By his own admission, no one tricked him. He knowingly took the deal that included audio because, at the time, he wanted the Del Rey print deal more than he wanted to preserve his audio rights. Now that he's doing better, he wishes he hadn't. But would he be in the same place if he hadn't? Who knows? This sort of thinking leads only to resentment, which has never done anyone any good.

I reread the reddit post. I don't think there's buyer's remorse here. It sounds like Michael and Robin sold the audio rights to some of the newer books before negotiating with Del Rey for the print rights, and made it clear to Del Rey that the audio rights aren't open to negotiation, but Del Rey refuses to waive that part of it. So even though Del Rey wants to do business with Michael for print rights on the new stuff, the dictates from on high in Del Rey means they can't. He even said at the end:

Anyway, this may be of absolutely no interested to anyone. But I thought getting it "out there" would help assuage any rumors that Del Rey and I are breaking because of a conflict of any kind, or because of low sales with my books. It's ironic. We (I and Del Rey) both want to continue working together, both are finding financial benefit from the arrangement and yet we can't keep doing what we've been doing. It's a crazy business!

Really is a crazy business when part of a company wants to do business but the executive management doesn't want to budge on acquiring certain rights.

[Craig Andrews]

The tone of this thread is really... interesting. Michael J. Sullivan was one of the first indie fantasy writers, if not one of the first indies in general, to really take off and leverage their indie success into a much wider business model. He's always been incredibly transparent about how and why he conducts his business the way he does (look in this very forum to find out why he signed with Orbit to begin with), and been an invaluable resource for hundreds of indie writers dating back to at least 2013. I don't see buyers remorse here, or anyone complaining. He's simply writing a letter to his fans and fellow indies explaining why they won't be able to find his books in B&N, Powells, etc. anymore.

[Elizabeth Ann West]

Executive management is who knows if they're making payroll next quarter . . . of COURSE an editor will play the "Oh, we'd have no problem...." they can play good cop and preserve the relationship.... blame it on the big, bad executive.

I don't wish Michael ill, I think he's done a great deal to help pave the way for others.... but this idea that larger corporations with much larger overhead, corporations we DO benefit on some level for existing (um, who REALLY want Amazon to have zero competition, anyone? Beuller?), are not exploiting rights when they go we will do this deal WITH this deal, or no deal. It's their balance sheet they have to negotiate from.

This is an ecosystem. And if you take the larger animals out of the ecosystem, it actually puts all of the rest of us at greater risk. The day we go down to 3 trad publishers and Amazon imprints is the day we see 70% for indies go out the freaking window. Because what are we REALLY going to do if they drop it to 60% or 55%? Nuffin'

[LilyBLily]

It's also worth noting that quite possibly, a publisher can negotiate a fatter deal for the audio rights than an author can. In fact, quite probably. Aren't authors doing deals right now directly that only give them 40% of the audio, anyway? The reason the Harlequin authors sued a few years ago was not because they only got 50% of a sub rights deal (the standard percentage), but because through fairly devious means, they got far, far less.

And if everybody was so determined to include audio in the deal and actually do the deal, why couldn't Del Rey or Sullivan buy the rights back from whoever?

At the same time, Kensington recently bought some of Marie Force's romances that have already sold many copies in ebook and paperback, strictly self-published, to do its own print run and mass distribution.

So...I think this Del Rey thing is specific to this author's situation and to Del Rey, not to all trad publishers.

[blubarry]

Is he the one who's wife ran a publishing company that didn't close very well because his books took off?

Regardless, I don't find the tone and content very professional. He's mad the publisher he works with wants to...stay in business? I mean really, a larger publisher has to have some projects over deliver to cover the costs of those that do not. It's part and parcel. Great, the third party audiobooks company situation from his point of view is going great, but he really has no idea what was involved with those negotiations. He assumes. And of this didn't go well or the company went belly up, I'm sure he sure expected that in house cousel of Penguin to take care of the problem....

Nothing wrong with wanting more of the pie for yourself, but let's be real here. He used to run the whole shebang indie, went trad pub is now unhappy the contracts he signed are paying him exactly what he agreed to get. Don't know any indies getting a $400k offer on rights from an audiobook company. Sure some indies are cleaning up in Audio rights on dozens of titles but there was not advance or additional infrastructure to protect them if things go sideways.

Going trad pub means you get some bennies but there's always a cost.... All I'm saying is go back through the Kboard archives I think his wife's name was Robin. I remember there were some very unhappy when that whole thing unraveled.

I think you're misinterpreting what he's saying. My read is that he's discussing why he's not going with Del Rey for his books, using audio as the pivotal reason. There doesn't seem to be a lack of professionalism, rather an understanding of value and business sense. Good for him for understanding his leverage.

[Anarchist]

I think you're misinterpreting what he's saying. My read is that he's discussing why he's not going with Del Rey for his books, using audio as the pivotal reason. There doesn't seem to be a lack of professionalism, rather an understanding of value and business sense. Good for him for understanding his leverage.

That was my take, too.

[Becca Mills]

I reread the reddit post. I don't think there's buyer's remorse here. It sounds like Michael and Robin sold the audio rights to some of the newer books before negotiating with Del Rey for the print rights, and made it clear to Del Rey that the audio rights aren't open to negotiation, but Del Rey refuses to waive that part of it. So even though Del Rey wants to do business with Michael for print rights on the new stuff, the dictates from on high in Del Rey means they can't.

Yeah, that's how I read it as well: as information sharing about the shrinking likelihood of being able to sell a book/series to a big publisher without including audio rights. He got a sweet audio-not-included deal with Del Rey for the first three books in a series, was really happy with the deal and with Del Rey, and expected to be able to get the same deal for Books 4 and 5, along with a new series, but the publisher is no longer willing to do it. He's FYIing people about that. It seems like good info to have, for authors who are in Michael's league and might be contemplating deals like this.

Of course Del Rey needs to make money, but they may have to adjust their current approach, given authors' ability to walk away from the table, as Michael has done. That might mean giving authors more than 50% of the take when contracted audio rights are resold. Or maybe Michael is an outlier, and others won't walk away. Who knows? Either way, I think it's interesting news.

[BillSmithBooksDotCom]

Michael has been enormously helpful and informative to authors, especially newer ones, by sharing his insights and experiences. He transformed into a very successful hybrid author.

And now he is letting authors and readers know that the landscape has changed.

I know he made a business deal and that's fine, but I have a hard time seeing how a traditional publisher added $200,000 of value by selling audio book rights. I understand that trad pub have overhead, purport to provide added value, etc. but that's really kind of their problem, not the authors'.

I say good for him.

I have to admit, the longer I watch the evolving publishing industry, I have come more and more to believe that by the time the trad pubs have noticed you, you don't really need them anymore.

[Craig Andrews]

Yeah, that's how I read it as well: as information sharing about the shrinking likelihood of being able to sell a book/series to a big publisher without including audio rights. He got a sweet audio-not-included deal with Del Rey for the first three books in a series, was really happy with the deal and with Del Rey, and expected to be able to get the same deal for Books 4 and 5, along with a new series, but the publisher is no longer willing to do it. He's FYIing people about that. It seems like good info to have, for authors who are in Michael's league and might be contemplating deals like this.

Exactly. He's not unhappy with the deal he previously signed at all. If anything he wanted to negotiate a similar deal to conclude his successful series.

Okay, so when it came to the Legends of the First Empire books Robin decided to sell the audio rights first. That way they would be "off the table" and we'd not have to split the profits with anyone. We sold the first 4 books to Recorded books for what PW would term as a "good deal" ($100,000 - $250,000).

Getting just the ebook & print for the English language wasn't a problem for Del Rey and so every one was happy.

Del Rey owned the rights to the first three books and changed their contractual requirements for books #4 and #5. How this reads as "buyers remorse" or "complaining" is beyond me.