Negotiating the Bottom Line: A Closer Look at University Press Contracts

Helen Stephenson, April 1991

In 1869, a press was founded at Cornell University for the sole purpose of publishing scholarly works by faculty members who were unable to find trade book publishers because of the limited commercial value of their work. Leading figures in the specialized field of university press publishing today contend that the original purpose has never changed and to this day remains the fundamental reason for the existence of such a press.

Much about the industry, university as well as trade, has changed since 1869, however. Funding reductions of the 1970s and 1980s have forced university presses to become more business-oriented in order to survive. Reduced funding from parent institutions and the government, a more stringent grant process at the National Endowment for the Humanities and some foundations, and the extraordinary shrinkage of library budgets have forced university presses to rely less on subsidies and focus more on sales as a main source of revenue. Since scholarly monographs or esoteric studies rarely generate high volume sales, university presses with increasing frequency have turned to the publication of trade books. The renaissance of the independent bookstore has also helped foster the broadening of lists of university presses. Further, despite the deep discount requirement, academic press books are more and more becoming a part of the Ingram/Baker & Taylor distribution network for trade books.

In the past, many scholars did not bother to take time to understand the contracts they signed. Nonacademics publishing with academic presses, who may have meticulously reviewed their commercial book contracts, often never bothered to read a university press contract. However, as academic publishing becomes more business oriented, the twin phrases, "Sorry, it's not in the contract" or "Sorry, it's in the contract," may be heard more commonly in academic publisher-author relationships. It is important for authors to take academic contracts as seriously as they would any other publishing contract.

The following information was derived from a survey of U.S. academic and university presses. Sixty-eight of the presses surveyed responded and sent copies of their standard contracts for analysis. The results of the survey are tabulated in Table 1 (page 5). The study reflects no changes authors may have been able to negotiate with various publishers.

Royalties in university press contracts are nearly always based on net receipts as opposed to list price, the standard in the trade book industry. "Net receipts" is the amount received by the publisher from wholesale distributors and bookstores, and represents a substantial discount off the cover price of the book. Thus a "10 percent of net" royalty on a $200 book sold to a bookstore at a 30 percent discount (a typical discount in the academic publishing world) will yield the author $1.40. An author receiving royalties based on list price would receive $2.00 on the same book. Furthermore, net receipts are variable, making verification of royalty statements difficult.

The vast majority of university press contracts provide for registration of the author's copyright in the publisher's name. Consequently, when a book goes out of print, not only must documentation of reversion of rights be obtained from the publisher, but the further formality of notifying the Copyright Office of reassignment of copyright must be observed. Also, the retention or retrieval of specific subsidiary rights by the author becomes a more complex matter.

The area about which there seems to be the least disagreement between university and trade presses relates to "warranties and indemnification." As with trade contracts, this clause can be found in nearly all university press contracts. With one rare exception, all contracts having the clause place the burden of expense for libel, invasion of privacy, copyright infringement, and related causes of action on the author. In only one contract submitted is the author covered by the publisher's insurance and initially liable only up to a specific dollar amount. On the other hand, all major trade publishers, except one, have covered their authors (subject to varying deductible requirements) under the publisher's umbrella liability policies since the early 1980s, affording authors some protection against nuisance libel and related suits. While such suits are more common in the commercial publishing world, academic authors are certainly not immune from such actions. Moreover, until the ambiguities of "fair use" and the ability to quote from unpublished copyrighted material are resolved, academic writers may be in more jeopardy than they realize under the typical warranties and indemnification clause, which transfers the publisher's costs for defending and/or settling even a nuisance libel or infringement suit or claim to the author.

Division of subsidiary rights is normally dealt with simply by splitting all income 50/50. This includes not only print-related matter such as book club and mass market reprint rights but, unlike in the tradebook world, also movie, television, stage, and commercial merchandising rights. While the 50/50 split on print rights always remains the same, over a quarter of the contracts surveyed allow for a more favorable division of subrights income on dramatic and commercial rights. The more generous splits on these rights ranged from a high of 90/10 (the division traditionally contained in the adult-trade boilerplate of commercial publishers) in favor of the author to a low of 65/35. Perhaps because most subrights possibilities are infrequently exploited in the university press setting, some university press contracts do not even address the issue of subsidiary rights.

Advances, usually given first and most immediate attention in trade book contract negotiations, are almost never included as a standard provision in university press contracts. Authors with some clout are able to negotiate advances into the contracts of some of the larger academic presses, but for the less well-known author or the college professor, caught in the "publish or perish" bind, advances usually are non-existent or negligible at best.

University press contracts generally provide that royalty statements will be sent out once a year as opposed to the standard two times a year in trade book contracts. As with all other contract provisions, there are variations. Payment can be expected to arrive anywhere from two weeks to five months following the end of the accounting period. Trade authors with some large commercial publishers may also endure as much as a five-month lag. However, the biannual reporting tradition in the trade produces a royalty report in eleven months (still inexcusable) as opposed to nearly a year and a half in the academic time frame. While the seventeen-month horizon may not be insupportable if sales are low, an author, whose academic publisher hit the literary lottery through a sale of massmarket subrights to a large paperback house, may lose patience waiting for monies due.

Consistent with trade practice, the author is expected to pay for all permissions, illustrations, and—usually but not always—indices. And while it may be provided that the preparation, manufacture, and marketing of a particular book will be done with the author's "consultation," and less frequently with the author's "approval," usually the press maintains total control over decisions in these areas as is the case in trade publishing.

Although present in the overwhelming majority of university press contracts, the infamous "satisfactory manuscript" clause is not found in all of them. This clause, which typically gives the publisher the ability to reject a manuscript if it is not "acceptable" in the publisher's sole judgement—i.e., under a totally subjective standard—is a highly contentious issue with trade authors. Upon rejection of a manuscript by the publisher, any portion of the advance received to date is generally fully and immediately refundable, leaving the author (who may have been working on a book for a number of months or years) with extraordinary financial exposure. The acceptability process may be less of a problem in academic publishing because there is seldom an advance, because few authors sign contracts based only on an outline or proposal, and because manuscripts are often reviewed by other experts in the field before the academic publisher offers a contract. Yet, it is precisely because of these practices that academic publishers should be more easily persuaded to introduce an objective standard (such as "professionally competent and fit to publish") for acceptability.

Option clauses, which appear in the boilerplates of all major commercial publishers, are not common in academic press contracts (only about 25 percent of our sample). An item that in all likelihood will never be found in a typical trade book arrangement is the boilerplate in two university press contracts, which goes like this: "Finally, although we hope and expect that our association with each of our authors will extend through the publication of many books, we do not believe in requiring commitments for the future and so do not ask for options." "Option clauses" are a particular irritant to authors because they provide one-sided provisions, binding the author to offer the publisher a next manuscript without obliging the publisher to publish the work. Unlike with other kinds of options, for example in the film world, no consideration is paid for tying up the new property.

On the other hand, the "non-competition" or "non-compete clause," a clause that has proved to be less than pleasant for a number of textbook and special interest (cookbook, travel, etc.) authors, does appear in most academic press contracts. Often broadly drafted and enforced only when a book becomes economically successful, the non-competition clause prohibits the author from publishing another book that might "compete" with the first unless the publisher gives its consent. A cookbook author, for example, would be advised to strike the clause if possible or at least limit it to prevent the author from publishing, say, another Greek cookbook within two years, rather than leaving the typical open-ended clause that could bar publication of any new cookbook with another publisher. Like special interest trade writers, academic authors—who have high levels of expertise in a specific area—could be closed out of further publishing in their field. While textbook authors who publish with some of the large commercial textbook companies have been challenging the clause as "restraint of trade" violation, the issue is by no means resolved.

A clause that should appear in all contracts but was missing from about 30 percent of our sample is the "out-of-print clause," which provides for reversion of rights to the authors when the publisher takes the book out of print. An author of a book published under a contract that did not provide for reversion of rights could be in a difficult situation if a long out-of-print work came back into vogue and he or she wished to resell it to another publisher. Furthermore, when a book does go out of print, the author should take the time (many do not—in both the academic and commercial worlds) to obtain written notification of reversion. Authors who wait until there is a new deal on the horizon often find the original publisher reticent to comply because suspicions are raised that there may be money to be made.

University press contracts are, by and large, less complex than comparable trade book contracts. Because academic publishers traditionally have focused on publishing important works irrespective of profitability and there rarely has been any money involved for the authors, the need for all-encompassing contracts simply has not existed heretofore.

Even though the primary focus in academic publishing remains the dissemination of important knowledge, the tension now developing between publication for transcendent reasons and profit potential (or at least break even) should give authors the impetus to understand and actively negotiate contract terms with academic publishers. This is true for both academic authors and nonacademic writers publishing with university presses.

University presses, to their credit, tend to keep books in print much longer than is the practice in the commercial publishing world. Yet, with books in print longer, contracts also remain in force longer, including undesirable clauses such as the option and non-competition clauses. Moreoever, as university presses increase efforts to work subrights, both mass market and foreign rights, as an additional source of revenue, inattentive authors who never bothered to understand their contracts because they were not being published by a commercial publisher may be in for a rude awakening. At the very least, the author should insist that copyright be registered in the author's name and that the contract contain an out-of-print clause in order to obtain at least minimum control of the work.

Helen A. Stephenson is executive director of the New York City-based Author's Guild.

The above article is a revised and updated version of an article that appeared in the Authors Guild Bulletin, spring 1990. If you would like more information about the The Authors Guild, please write to the organization at 330 West 42nd St., New York, NY 10036.