Wednesday, July 15, 2009

The Multi-Book Deal: Is It Worth It?

Just imagine: an editor is so in love with your work that he wants to not only buy your manuscript, but he wants your next book, too. And it hasn’t even been written yet. Ahhhh….this is the stuff that aspiring writers dream of –the multi-book deal. But are these deals all they’re cracked up to be? I’m not sure first-time authors understand all that they’re getting into with these deals, for better or worse. Here are some things to consider before you sign on the dotted line.

Money, Money, Money
One of the best things about multi-book deals is that you get a higher advance than if you sold just one book, right? Well, sort of. Publishers sometimes use the multi-book deal to buy two books at a discount. For example, if you sold only one book, they might pay $10,000, but instead they offer $15,000 for two. That’s only $7,500 each.

One way to look at this is to say that if you take the multi-book contract you are guaranteed $15,000—which is $5,000 above the hypothetical single book offer. If your first book ends up tanking, this might not be a bad deal. It might be hard finding a publisher who will pay you $5,000 the second time around.

On the other hand, what happens if your first book becomes a runaway bestseller? In the case of the multi-book contract, you’d be on the losing end of the deal to some extent. If you had signed a one-book contract and the book made millions, you’d be virtually guaranteed a huge advance for your second book. Alas, if you signed the two-book deal, your advance would remain the previously agreed-upon $7,500 and the terms would remain at the newbie author level, instead of reflecting your status as a bestseller. You can take some comfort, however, in knowing that you’ll be rolling in royalties.

Creative Accounting
Multi-book contracts are accounted for a little differently than one-book contracts. This can occasionally work to your advantage, though often it doesn’t. The first way it works against you is in the payout. For those of you who are new to the world of advances, it’s important to know that publishers do not pay your advance in one lump sum. Instead, it is divided into installments. Here’s a typical payment schedule for a $10,000 advance:

      $3,333 on signing of the contract (which is paid immediately)
      $3,333 on delivery & acceptance of the complete manuscript (several months down    the road)
      $3,334 on publication of the book (maybe a year or two later)

Now here’s the payment schedule for the two-book contract described above, with an advance of $15,000:

      $5,000 on signing of the contract
      $2,500 on delivery & acceptance of the complete manuscript of book #1
      $2,500 on publication of book #1
      $2,500 on the delivery & acceptance of the complete manuscript of book #2
      $2,500 on the publication of book #2

In this scenario, you’re getting slightly more on signing, but your payouts are smaller. Considering how long it takes to write and publish a book (let alone two), it could be several years before you see the final two payments.

Another form of creative accounting in multi-book contracts has to do with royalties. Since the books were sold together they are accounted for together, which is called basketing. This means that all earnings are bundled together and treated as one unit.

For example, let’s say that your first book does well and you earn $8,500 in sales on your statement. If this was a single-book contract with an advance of $7,500, you would earn out your advance and be paid the excess $1,000 in royalties. In a multi-book deal, however, that extra $1,000 gets applied to the $7,500 advance for book two, instead. You will have to earn out the remaining $6,500 on that advance before you see a dime in royalties. As you can see, if you have a contract for many books it will take you damn near forever before you start to see some royalties.

You’re On the Clock
Before entering into a multi-book deal, it’s important to carefully and realistically examine the delivery schedule of your manuscripts. The publisher will want a deadline commitment and you’ll want to be sure you’re not getting in over your head. Committing to a schedule is a great motivator for many of us creative types and can work very well if you already have a completed outline or first draft of your next book. But if you don’t know what your next book is going to be, proceed with caution. Negotiate for as much time as possible. Beware that if you are unable to deliver your manuscript as promised, you may be asked to return that portion of the advance. Usually, by the time this happens, the money is long gone.

Job Security: The Good News and the Bad News
One of the best aspects of a multi-book deal is that you have the security of knowing when your publishing home is for the next several books. You’ll develop solid relationships within the company and you’ll have a chance to prove yourself if your first book isn’t a hit right out of the starting gate.

That’s the good news.

The bad news is you might hate your publisher. You might discover early on that you don’t click with your editor, there is too much politics, promises aren’t kept, your promotion is nil. In this case, you’re stuck through the next several books.

So Is a Multi-Book Deal Worth It?
That depends on you. If you’re a first-time author it’s hard to say no to any offer that comes your way. If you’re dealing with a good, solid publisher, then by all means take the deal—being aware of the pitfalls. Well-seasoned authors have greater options and the benefits are more likely to outweigh the risks. Either way, it’s important to thoroughly understand any contract before you sign.