Wednesday, September 22, 2010

Options! Options! Options!

Q: How about getting out of a never-ending option clause? Say you've gone directly to a publisher. Say that publisher keeps putting an option clause in the contract that says they get first look at your next book. Said Publisher refuses to take this clause out, and Little Known Author has very little bargaining power. Is there any way out of this situation? Or is it best to just suck it up, write another book, and query some agents?
This is going to be a long one, I apologize in advance. But it is important, I swear.

Probably not everyone reading this knows what an Option clause is, so a quick definition. The Option clause (frequently just called "option") is part of the contract that essentially says that the publisher has x amount of time to look at the author's next manuscript exclusively.

I try to remove the option from contracts whenever possible. Some publishers insist on keeping it in their contracts. Seems silly to me personally, I mean, I always try to give the current publisher first crack at a next book unless there is a pressing reason not to. It is only polite... and I don't like being contractually obligated to be polite.

I do understand the publisher's perspective. They are making an investment in publishing you, and they want the opportunity to be the ones to grow your career. After all, if they liked your writing enough to buy it the first time, they may well like the next book just as much, publishing more books from you will help the sales of the first one, and why should they spend all this time and effort and money to publish you if you're just going to run away with the next book?  I get it. Don't always agree with it, but I get it.

That said, there are some option clauses that are onerous. The good news is, even if a publisher will not remove the clause, they will often adjust it... and yes, probably even for a small-potatoes author with no agent.  Personally, I do my best to remove the option, and if I can't remove the option, I try to make the terms of the option as narrow as possible.

For example, if you have written a YA novel set in a Victorian Steampunk version of the Old West, you don't want the option to be for the next book of any kind that you write. I might say that the publisher only has an option on "your next work of YA fiction set in Victorian Steampunk Old West" or "YA set in the same world" or "with the same characters." That is fair, I think, as it would naturally make sense and be for the best if the same publisher can publish what could be considered a sequel or companion book to book 1.  But this way, if you write some totally different contemporary YA, or a Middle Grade, or nonfiction, or anything else, you aren't required to give them a brief exclusive (though you still can if you want, and it is probably polite to do so if you have a good relationship with your editor).

I also make sure that the option time limit is as short as possible (30 days is ideal, NOT 90 or 120 days or anything else). And I ask to be able to turn in a proposal/sample chapters, not an entire manuscript. And I make the date I can submit be either anytime, or anytime after delivery of the first book... NOT AFTER PUBLICATION OF THE FIRST BOOK. That could keep you hemmed up for a year or more.

Also, sometimes there are nasty bits of the clause that might say, essentially, "if we make an offer but you go elsewhere, you are not allowed to take less money than we offered you" or maybe "if you turn down our offer or we don't make an offer but somebody else does, you have to come back to us first before accepting any other offer." NO. NO. UNACCEPTABLE. If you've given them an exclusive and they make an offer and you accept it... awesome!  If they decline to make an offer at all, too bad for them.  If they decline to give you the offer that you want to see and won't negotiate, you can say no, and that is the end of it.

One (invented) example of an onerous option (there may be more text or different problems than this):
Publisher shall have the first opportunity to read and consider for publication the Author's next work, for a period of 120 days from receipt of the complete manuscript, such time period not to begin before 60 days from the publication of the Work which is the subject of this agreement. If Author and Publisher cannot agree to terms for publication of said next work, the Author shall be at liberty to negotiate with other publishers, provided that the Publisher be given the option to obtain the rights to next work by matching terms which Author shall have obtained elsewhere.
One (invented) example of a decent option (there may be more text than this, but these are the basics):
Publisher shall have the first opportunity to read and consider for publication either the complete text, synopsis, or specimen chapter from the Author's next realistic YA novel set in the same world as the Work that is the subject of this agreement, for a period of 30 days from receipt of proposal of said next work, on terms to be negotiated. If the Publisher and the Author are unable to agree terms for publication, the Author shall be at liberty to enter into an agreement with another publisher.
So quick recap. You are given a contract with an option clause in it:
You may ask to have this clause removed. If they won't remove it:
* SHORT time limit on option clock (30 days max is ideal)
* Try to specify that you can turn in proposal or sample, not completed ms. & narrow down the type of book that is covered.
* Time limit starts whenever you turn in proposal, or if not, within x time after DELIVERY of first book, not publication
* If they say no, or the option clock runs out, your obligation is complete.
Remember - if you've done your best to create a good next book or proposal, and you've given your current publisher a decent crack at it according to the rules and spirit of the contract, you are done. If they take too long, you are allowed to go elsewhere. If they give you a terrible offer, you are allowed to say no. Just because you have an option doesn't mean you are REQUIRED accept any offer.

And if all this is too late for you, or you don't know what I am talking about and all this stuff gives you a splitting headache... it's probably a good idea for you to write another book and query some agents.

17 comments:

  1. Okay, this prompted me to go check my contract! Heh. A musical friend of mine was amazed that publishers will have the option clause for only one book. I guess in the music industry, companies will try to option the next 5-10 albums, or something.

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  2. That was EXTREMELY helpful! Thank you!

    Frankie

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  3. Great summary! You made it easy to understand the legalese - thanks!

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  4. What a great post! Thanks for lining it out so we can understand all the ooey ooey. Very helpful!

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  5. Thanks very much for clarifying this clause.

    Now, a question. If you offer up a ms, and your editor says no thanks for this one, are you free of the option or do you have to submit every ms until they buy the "next one."

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  6. Fantastic information as always!

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  7. Stephanie: Once you have given them the option book, and the option clock has run out, the option is over.

    The only exception to this would be if there is additional language in there specifying that they can have an option on more than one book - which might happen, as Sonia suggests above, in some kinds of contracts, though I have never seen it in a kids book contract. (Not to say that it doesn't exist or has never existed! Just that I personally haven't seen it.)

    It goes without saying, I think, that you'd want to strike such language.

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  8. Excellent post. Thank you.

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  9. Awesome post. Never saw this explained before. Thanks so much for the insight!!

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  10. Great explanation!

    Further question: What if you give them a sample of the next mss as required in the option clause, and the editor doesn't like it and asks you to rewrite/rethink the concept? Are you required to make changes, or is your option fulfilled because the editor didn't like it as-is?

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  11. Thanks for your help, Jennifer. It is truly appreciated.

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  12. Susan, it depends on the language, but generally speaking (in the example I gave of a good option) - if they turn it down or the clock has run out, your obligation is fulfilled.

    That said, if you like your editor, and you DO want to revise, it would be only fair to give her a brief first crack at the new version. Particularly if you've revised based on notes she's given you!

    Now, in the example of the BAD option in the post, you could shop it elsewhere but you would have to give them a chance to match any offer, even if they turned it down. FEH.

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  13. Thanks, Jennifer!

    I watch all these things go-down, and hopefully learn. :)

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  14. Thanks for clarifying!

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  15. Great advice. BTW, love the cover on Harmonic Feedback. Checked it out--right up my alley.

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  16. Good advice here - thanks!

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  17. I saw this one recently...

    "Publisher shall have the right to acquire Author’s next book-length work, of at least 50,000 words, on the same terms and conditions set forth in this Agreement. Author will submit a completed manuscript of such work to Publisher before submitting the work to any other publisher, and Publisher shall have one hundred-eighty (180) days in which to review the submission and determine whether or not to exercise the option. The one hundred-eighty (180)day period described above shall begin 30 days after the date of final signature of this Agreement. If Publisher declines to exercise its option, then Author may submit the work to other publishers or otherwise dispose of the work."

    Eep.

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