Unless you’ve been living under a rock for the last week or so, you’ve heard plenty about the problems surrounding Night Shade Books. Now, anyone who is a member of SFWA or who has searched for a science fiction publisher over the few years probably knows that Night Shade has had more than its fair share of problems. There had been talk of de-listing it as a pro publisher by SFWA and authors have reported slow — extremely slow — royalty payments.
Well, everything came to a head last week when Night Shade announced it had decided to sell its assets to Skyhorse Publishing and Start Publishing. That’s when the storm hit the internet and all hell broke loose.
Before getting into why so many of the authors caught up in this situation are worried, let me start by saying this situation is a perfect example of a PR nightmare. It was mishandled in so many different ways. It began with a tweet by one of the owners of Night Shade basically announcing exciting new news. Then came the letter to authors which has been seen by many as nothing more than blackmail. SFWA also hasn’t helped because there has been no official — PUBLIC — statement about the sale that I can find except for a self-congratulatory note about some changes in the terms of the proposed sale (original terms they originally signed off on as best as I can tell).
While I can’t vouch for the authenticity of this “exhibit”, this does seem to be an accurate representation of the letter originally sent to Night Shade authors. Among my concerns with this are: 1) lowering of royalty rates; 2) no accounting to the authors about what they are actually owed; 3) no detailing of the number/percentage of authors who have to ratify the new contract for the sale to go through;. But what really concerns me is the rights grab for audio (and who knows what other rights) not currently held by Night Shade. The way I read the contract — and I am not a lawyer nor am I the only one with this concern — unless an author has already sold audio rights or is currently in active negotiation with someone for those rights, by signing the contract, they are handing the rights over to the new owners for no compensation except 50% royalty on net sales at some point down the line.
I’ll admit right now that I don’t know the folks at Night Shade, nor do I know the folks at the two companies that want to take over its assets. But I know a bad deal when I see it. Nor am I alone. You can read what Michael Stackpole has to say about it here and here. There is also a very informative post by Andrew Zack about the initial announcement and terms. You can find it here.
As I said, this was the “initial” offer of terms. After the internet went wild with disdain (yes, I’m being nice) about the offer to Night Shade authors, there was first an attempt to justify the offer by Night Shade and then the top dogs for the buyers offered their take on things. My biggest issue with all this was the attitude of Skyhorse and Start. We were being told they were the good guys in all this. Of course, if you keep reading, you’ll see they are also wanting to insure they are making their money back — on the backs of authors who have already been harmed by not being paid what they are owed.
So the internet exploded and all was not right in the world of publishing (as if it has been in a very long while).
Then came the announcement that new and better terms have been offered by Skyhorse and Start. From SFWA:
After continuing talks with Skyhorse/Start, SFWA is pleased that the companies have decided to adjust the royalty terms in their author agreement to be more in line with industry standards for Science Fiction and Fantasy. We see this as a positive sign that they are listening to authors and are responsive to their concerns, and we hope that continues. SFWA has remained in close communication with our members who are directly affected by the sale of Night Shade Books assets and will continue to provide them with information and support.
Note that this is after SFWA had already announced it was pleased with the initial offering. Gee, you have to wonder if the powers that be really thought their members would bend over and cough as they accepted the initial lower royalties. Also note that this only deals with royalties and not with the reporting out of the number of authors who need to agree to the new terms for the sale to go through (assuming a bankruptcy court would allow it) or the rights grab or any of the other issues that have been raised about the deal.
Now, I am glad to see Skyhorse and Start have increased the royalty rate. However, I have a real problem with their explanation of why they didn’t initially offer similar terms.
Jarred and I have been listening to and thinking through what the Night Shade authors and agents have said on blogs, on facebook, over email, and during several very long phone conversations. Skyhorse and Start now have a much more complete picture of what the Night Shade authors been through and it’s helped us to understand the reaction that many of them have had to the deal as offered.
So, they were offering to buy a company that has a history of problems with paying its authors, among other things, and they didn’t do a full investigation of what was going on? Somehow I find that hard to believe. Maybe I’m a cynic, but I have to wonder if they really thought authors would be so glad to be promised payment, any payment, that they actually thought the original royalty rates would fly. Remember, too, they had supposedly been in discussion with SFWA — an authors organization — and SFWA allegedly agreed to the original terms. Color me very skeptical.
The new royalty structure:
7 1/2 % of retail for all printing books.
25% of net receipts on all ebooks up to 15,000 copies sold and 30% thereafter
50/50 on audio, with a reversion if we don’t sell the rights in six months. Audio rights money to flow through within 30 days of receipt of payment, provided that the advance has earned out.
The assignment clause, clause 7, would only apply if the assignment is part of a sale of “all or substantially all of the assets of the company” purchased by either Start Publishing or Skyhorse Publishing.
Now, I applaud the increase in royalty rates. This is much better than the initial offer. However, I still have concerns. The first is that e-book royalty is 25% of net. If the Skyhorse/Start had any cost involved in getting the ebooks out there, that might make sense. However, these ebooks already exist. The editing, formatting, conversion, etc., is already done. Also, this is merely an announcement and we haven’t seen the actual contract language. That means we don’t know how they are defining net for either print or digital. Then there’s the fact that we still don’t know the magic number of authors who must ratify the contract before the sale will go through.Finally, it still looks like a rights grab on the audio rights. Again, we are seeing only the announcement and not the actual contractual language. Still….if it looks like a duck and quacks like a duck….
I hate seeing any publisher go under. I hate seeing lousy contract terms for authors even more. There is no reason for it in this day and age when there are so many options available to us. I feel for the authors caught in the middle of this carnival of nightmares. If you are an author with Nightshade, don’t just rely on your agent when it comes to accepting or rejecting the offer. Get yourself to an IP attorney as fast as your feet can carry you. While you don’t want to get tied up in bankruptcy proceedings, you also don’t want to give up the farm just to avoid it. All I know for sure is that this is a long way from being over.