Monday, August 15, 2011

Agencies for Sale--Or Not

A few weeks back, I opened up a Publishers Lunch Deluxe email and found myself, via my blog, quoted heavily in an article on agencies for sale and what happens or might happen when an agent dies without a succession plan.

I appreciate the attention, but I was somewhat surprised by the quotes taken...and that I hadn't been called to discuss the article before I was so heavily quoted.  But let's ignore the journalistic oversight and jump right into discussing what the article missed that was more important than what it said.

In the article, the author (
"But Zack represents the agent's position in such a contractual interpretation: He says Scalzi's letter "implies that the administrators have a continuing obligation to the authors beyond servicing their current contracts. If this position were somehow upheld in a court of law, it would radically and permanently change the relationship between authors and agents." Zack writes that "certainly anyone must agree that if a contract was signed naming the agency as the agent of record, then the commission has attached."
Ralph Vicinanza Literary Agency and the implications of what it said.  And Ms. Weinman appears to miss that most-important implication.

SFWA appears to believe that if an agent dies, the agency stops taking on new clients and selling new works, and there is no further active representation of the client by the agency, then the author has a case to cease paying commissions to that agency on deals already signed.  It was in response to this point that I stated, "If this position were somehow upheld in a court of law, it would radically and permanently change the relationship between authors and agents," and not to anything Mr. Jassin said.

Industry standard practice is that when an author signs a contract for a book represented by an agent, that agent is entitled to commission on that deal for the term of the contract, which in most cases is term of copyright.  This has been true for decades, if not a century or more, in the publishing business.  However, the implication of what SFWA states is that if an agent terminates representation of a client or the client terminates representation, then the agent should no longer receive his or her commission on prior deals signed, as he or she is no longer "actively" representing the client.  This position, if taken up by other writers' groups or even by a few heavy-hitting clients (hello, J.K. Rowling, who just quit one agency) could absolutely change the way our business operates.  Agents would no longer be guaranteed their commission for the life of the contract.  Authors might find that agents were no longer willing to space out how they took their commissions, e.g., upon selling a novel for $100,000 with a payout of 1/3 on signing; 1/3 on delivery & acceptance; and 1/3 on publication, and agent might insist that his or her entire fifteen percent commission come out of the first third, thus ensuring if the client left in the middle of the deal, the agent still got paid.

Or potentially some agents would simply stop working on commission and move to a project-based rate (like publicists, who earn thousands per month) or an hourly rate, like attorneys or accountants who earn hundreds per hour.  How will the AAR argue against reading fees if and when agents become project- or hourly-based?  How will poor authors find agents if they can't afford to pay the fees?

Now, it could be that Weinman was actually talking about something that I, in fact, never touched on in my original blog:  the subject of "unsold rights."  Under some representation agreements or clauses, if an agent does a US deal for a novel and the client leaves the agent, the agent continues to represent the unsold rights to that novel, e.g., foreign, audio, etc.  Yet that's not a legally maintainable position.  An author can't be contractually forced to allow an agent to represent him or her.  However, an author can be contractually bound to pay a commission on such rights, a position my firm has never taken.  While some agents will argue that it was the sale in the US that added value to the work and thus made it attractive to UK and foreign publishers, as well as audio and film companies, the simple fact is that  I would never want to work with a client that doesn't want to work with me.  Hence, if a client leaves my firm, his or her unsold rights go with the client.

So the really stunning part of the entire SFWA/RVLA situation to me and what I think Ms. Weinman missed in her article is what a game-changer it could be if SFWA and other writers' groups start pushing this point about ending commission payments if the representation agreement terminates.  Thanks to lawyers like Mr. Jassin, who made the point that the right to commission is about the only thing that will hold up in court under certain circumstances (versus the right to continue to represent unsold rights), I imagine that agents will soon be rewriting their agreements with their clients to be far more specific.  And I imagine that the entire discussion is one that will weaken agent/author relationships and further exacerbate the often we vs. them attitude that so many writers' groups seem to take.

In the end, the author/agent relationship should be a partnership born out of trust and mutual respect.  It's a shame that some agents don't prepare succession plans, but barring a failure by the agency to keep paying its clients what they are owed, I see no positive results for our industry if writers' groups or authors begin lobbying that agencies can be separated from their commissions upon termination of representation.

Z

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