So You’ve Got a Book Deal. Now what?

Last month, Red Dog Press closed its doors.

The month before that, Sandstone Press collapsed into liquidation with rights subsequently sold on.

The result of small presses going under can be devastating. Authors (and other creditors) may not get paid. Rights to books can be auctioned off forcing authors into business relationships they never envisioned.

The knock-ons can have a lasting impact. Series get orphaned, works in progress wasted. Pipeline projects that should have been an easy sale end up taking forever to find a new home, or worse, end up sitting in the metaphorical drawer forever.

My remit when I was appointed as a CFA Admin was to represent author’s interests. I take that duty seriously and my advice, no matter who you’re considering doing business with, is simple:

Do your homework.

I know, it’s simple advice. But lots of us don’t do our due diligence. There’s a culture among authors that “being published” is the goal no matter what the cost. Authors must learn to be as picky about their publishers as their publishers are about them. Nothing is foolproof (even good publishers fail – it’s a brutal industry; and one which is full of lovely people which makes it hard to say no sometimes) but taking a few simple steps might just reduce the risk of heartbreak later on.

Have a look at what’s going on under the hood. You can see, free of charge, the publicly filed accounts of most publishers by searching the Companies House register here:

https://find-and-update.company-information.service.gov.uk/

You’ll be able to see a complete Filing History. Filtering by “Accounts” will let you see how much any publisher has made in any given year, how much cash they have on hand, and how much they owe and are owed.

If there aren’t any accounts, that’d be red flag #1. If the accounts are overdue, that’s red flag #2.

It can be confusing if you’ve never seen them before but it’s relatively straightforward. Negative numbers are in brackets so (£1000) means minus a thousand pounds.

Profitable companies will have money in the bank to cover the royalties that are coming due. If they don’t, you may not get paid. Authors are unusually exposed to this because sales are paid so far in arrears. It’s not unheard of for authors to lose out on six months’ pay (because if you’re a publisher and you’re going under, you’re gonna spend what cash you’ve got keeping your staff on the books before you pay your (author) suppliers as otherwise its Game Over).

The amount any publisher is expecting to pay out in the next 12 months (from the “preparation date” listed) is under “amounts falling due within one year”.

This is useful in two ways.

Firstly, you can see if they’re at risk of going under. If the current income doesn’t cover the currently owed creditors (inc author royalties), they need to get cash from somewhere. It doesn’t mean the company is definitely going under – sometimes they’ll get further investment, director loans, etc to bridge the gap – but it’s one of the flags to keep an eye out for. Occasionally, it’s an accounting issue (that they’ve “booked” the cost, but not the income; this is rare but it is possible).

Secondly, it gives you an idea of the total royalties a publisher is paying out in any given year. The “creditors” include other people they have to pay too so £200,000 coming due means the total royalties is at most equal to that amount but probably LESS than that (after all, publishers have other costs to pay for too). Some accounts may be broken out into “trade debtors” and “other debtors” in which case it’s the “trade” bit you want to look at.

If you divide that total payout among the number of authors the publisher has on their books, you can see how much, on average, each author is getting. This is a very crude metric as it’s only a mean average (it could be one superstar is owed £199,000 while everyone else splits £1,000 for example) but it’s the best you’ll get from the accounts.

Remember:  authors are unsecured creditors. They’re at the back of the queue to be paid. If a publisher goes under, an author might get pennies in the pound if anything. They’ll have to pay secured creditors first (like bank loans) and employees have some protection too so their wages will be paid before your royalties.

Worse, the rights they sold to the company are an asset of that company in bankruptcy and can be sold off.

If a publisher has been around a while, you can look at how their accounts have changed over the years. A growing profit margin is good, a shrinking one is bad. But remember to put it into context: £100,000 in Year One with 10 authors is better than £150,000 in Year Two with 20 authors.

Have a look at the “net assets” line on those accounts. Are they going up year-on-year are they going down? If they’re going down, ask why. It could be something innocuous (like a higher dividend being paid to the owners) or it could be a cashflow issue.

It’s not always bad news when publishers fold. Sometimes another business will take over a failed publisher and run it better than the old owners. Many authors will have negotiated their contracts so that rights revert in the event of insolvency (i.e. the author gets their book back if the publisher goes under). This is where an experienced solicitor is invaluable (and you may have free access to a contract review service if you’re a member of a writing organisation like the Society of Authors).

But a lot of the time, it will end in tears.

Here are a few tips to help mitigate that risk.

• The first is to check the accounts. If it’s not your thing, get a friend to help you pore over them.
• The second is to check in with some of the publisher’s existing authors. My advice is to talk to the small fry. Find the authors with the fewest reviews (which we’re using as a quick and dirty proxy for sales) and ask how they’re treated. If a publisher treats their least-important people well then it speaks volumes about them. Don’t listen to just one opinion but solicit several. The way publishers treat their existing stable speaks volumes about how they might treat you.
• Look at the production values too. Are the covers good? And were they made by a big-name designer (hint – the best designers ask for credit; check the copyright page)? How’s the blurb strike you? Are the reviews good on average? Does the sample chapter read well? In short, are they creating a product that you’d be proud to put your name on? Would you / have you bought stuff they’ve previously published?
• Google extensively. Look at Writer Beware and see what other authors think. There’s an extensive list of Small Press Complaints with dozens of examples of problems authors have had in the recent past.
• Look at social media. See if they’re active. You can even check what adverts a page is running on Facebook (and who they’re targeting).
• Check for conflicts of interest. If a publisher has a vanity arm (i.e. the author pays them) then be very very cautious.
• Read any contract offered very carefully. Look for reversion clauses. Check the term length. Then have your lawyer check it too. If you don’t understand a term, find out what it means. If any term of the contract asks YOU for money, it’s probably a vanity press and you should run a mile.
• Don’t put your eggs in one basket. If you’ve got multiple books, consider diversifying by having multiple publishers (and self-publishing some). That way one insolvency doesn’t derail everything.
• Be quick. If things do go south and you’re not paid, don’t let anyone fob you off. Writers often get strung along for far too long because they’re nice. But this is a business relationship. You’re a supplier, you deserve to get paid all you’re owed on time.

It’s too easy to fall into the “I just want to be published, full stop” mindset. A bad publisher is worse than no publisher. You want to partner with people who care about your book as much as you do. You want people who can sell your book (because that’s the only way you get read, even if you’re not trying to make a living) and you want it to be profitable so they, and you, can keep doing it for as long as you both want.

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