On Foreign Rights

This is a topic sparked by questions I received after I posted my Aussie covers a couple of days ago. It’s one of those nuts and bolts issues in publishing that beginning writers usually don’t think about until someone sends them their first contract. So, what’s it all about?

Consider Joe Author, who has just sold his new book, The Great American Mystery, to St. Martin’s Press. On the advice of his agent, Joe cedes his publisher World rights. What does that mean?

Contract clauses vary, but typically a writer ceding foreign rights to their publisher does so on a 50-50 bases. In other words, if Joe’s North American publisher sells the rights to his mystery to a British publisher for $1,000, Joe will only get $500 of that. Actually, Joe might not ever see that $500. Because the sale comes under Joe’s contract with St. Martin’s, the money from the British sale won’t go directly to Joe; it will be applied against his advance. Only when Joe’s mystery earns out will he receive his $500 from the British sale. (Except of course that, even then, Joe won't get the full $500; Joe only gets $425 or $450, depending on whether his agent takes a 10 or 15 percent commission.)

Now, compare Joe’s experience to Mary’s. Mary signed a contract retaining all of her foreign rights. Mary’s agent sells her French language rights to Paris for $1000. So, how much of that does Mary actually get? Agents typically take 20% of foreign sales, simply because they’re more time-consuming and therefore more expensive to negotiate. But Mary still makes $800 out of her foreign sale, compared to Joe, who only made $425.

From this you might conclude that it’s a no brainer for authors to retain their foreign rights. Well, like so much else in the publishing industry, it’s not that simple.

First of all, sometimes a house will refuse to budge on foreign rights. You can either sign over all your foreign rights, or go find another publisher. Hmmm.

At other times, a house will pay more for a book if it comes with world rights. The thinking here is, We THINK this book will earn out if we pay $30,000 for it, but we’re not sure. If we hedge our bets and hold onto World rights, we can up our chances of covering our asses if the book bombs. So the publisher tells the editor, “Offer Joe $25,000 for North American rights only, but $30,000 for World.” Again, the author has a choice to make. It’s possible he could insist on retaining his world rights and then never make a single foreign sale. Bzzzzz. You lose $5,000.

A lot depends on the author’s agent. Large, prestigious agencies like William Morris have dedicated foreign sales departments. Their clients typically—but not always—retain their foreign rights. On the other hand, most small, one-man agencies are seldom equipped to make foreign sales. Their clients are best advised to sign over their foreign rights to their publishers and be happy with 50% (minus the agent’s 10-15%, of course) of whatever rights their publisher sells.

Frequently a publisher will insist on retaining World English rights. This means the author can sell the book to be translated and sold someplace like France or the Czech Republic, but only the original North American publisher can sell the book to Britain or Australia.

That’s the nuts and bolts. What’s my personal experience? When I first started out in this business, I was with William Morris, and they saw to it that I retained all my foreign rights. When my agent, Helen, left William Morris to marry a Hollywood producer and move to California, I went with her. Her agency is small, but she works with a dedicated foreign sales agent who is very effective. We usually retain foreign rights, but we sometimes cede World English. More about that later.

Just how lucrative are foreign sales, anyway? I know some authors who’ve sold to German and French publishers (typically the best-paying markets) for six figures. That is rare. Most foreign sales are for $1-5,000. But if an author sells to fifteen or twenty different countries, that can add up. Particularly when you figure this is “found” money—essentially gravy on top of whatever you made from your sale to your North American Publishers.

Of course, not all books sell well overseas, and not all overseas markets are easy to enter. I’ve found that romances sell much better than historical mysteries; I’m STILL selling my romances to new foreign publishers. I’ve also found that Britain is a really, really hard market to crack. My advice to beginning authors is, If your publisher wants World English rights, let them keep them. For some reason, publishers seem to have more success selling to Britain and Australia than agents.

There are lots of other rights that authors and publishers wrangle over at contract time—film rights, large print rights, audio rights—lots and lots of rights. But for every author who sells her book to Hollywood, hundreds more will make a foreign sale. So while we all dream of seeing our book made into a movie, we’re more likely to find ourselves renting storage space to have someplace to go with all those boxes and boxes of books in Russian and Dutch, Italian and Chinese, Romanian and Bulgarian, Spanish and Swedish, Danish and Slovakian…