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Advance on royalties . . .

philreed

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I know for a fact (having been paid an advance a few times before) that SJGames pays advances on royalties.

I also know for a fact (having paid the advance before) that my own company, Ronin Arts, has paid advances on royalties before.

I suspect these are not unusual instances of advances being paid.
 

LBrownIII

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I know for a fact (having been paid an advance a few times before) that SJGames pays advances on royalties.

I also know for a fact (having paid the advance before) that my own company, Ronin Arts, has paid advances on royalties before.
Thanks for the info, Phil. Do you know how SFJ calculates it? Is it all royalties from first print run?
 

philreed

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Thanks for the info, Phil. Do you know how SFJ calculates it? Is it all royalties from first print run?
It's any printing of the product, not just first run. So if an author writes a very popular product that has to be reprinted multiple times that author earns more money.
 

LBrownIII

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It's any printing of the product, not just first run. So if an author writes a very popular product that has to be reprinted multiple times that author earns more money.
I meant the advance. Obviously, you get royalties from all printings.
 

JLowder

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Hi:

Let me chime in here on a couple things.

Phil's right about advances. In fact, in my experience game publishers of all but the smallest sort will pay some sort of advance, and contracts tend to be structured so that larger advances are paid in installments--so much on signing the contract, so much at first ms. turn over, the rest on final acceptance.

A smart freelancer gets some sort of advance on every project, if for no other reason than it serves as a minimum kill fee if the publisher cancels the project or goes out of business.

And freelancers can be asked to return an advance, if the freelancer fails to live up to the contract. This happens most often when a publisher pays the full advance on signing, and the freelancer fails to deliver anything or drops out of the project for some reason. I've seen publishers in this sort of situation agree to a fragment of the advance as a kill fee, but ask for the rest back. The trouble this causes is generally the reason publishers pay larger advances in steps, as the freelancer hits turn-over targets.

If the publisher is the one that pulls the plug on the project, for reasons that do not involve the freelancer's non-performance, the entire advance should be considered a kill fee.

Of course, a well-structured contract will protect both the freelancer and the publisher in how the advance is handled, and spell out what is to be paid as a kill fee should the project never be published. (And should also spell out what happens to the work itself in those circumstances....)

You also note: "In the RPG industry, royalties on print books are typically paid on net sales--that is, on the amount the publisher receives, rather than the amount the customer pays. This amount is about 40-45% of the retail price. Thus, 10% net is about 4% or 4.5% cover."

I don't believe I've ever been paid a royalty on a game product based upon net sales. In fact, cover is much easier to track as a royalty base, since there are various discounts available from publishers and tracking that creates a jumbled and overly complicated statement. I've heard of publishers using net, but I donlt think I've ever seen it, even with RPG products.

You also say: "Agents have no place in the RPG industry. Fifteen percent of the little bit writers earn here isn't enough to make an agent pick up the phone or read a manuscript. They don't want to work here and we really don't need them."

Not entirely true. Many deals are so small that an agent won't touch them, but there are "name' authors who use agents in the industry.

In fact, most authors would benefit greatly from having a diligent agent look over their contracts to watch for unfair clauses. Now, many freelance game designers are not going to make enough to attract a good agent, and far too many designers are content to sign bad contracts because those contracts are so common in the RPG-end of the market, but that doesn't mean that they don't need an agent. They need someone to look over what they're signing. Badly.

Cheers,
Jim Lowder
 

LBrownIII

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Well, I thought that hedging my statement by saying that I didn't know of any publishers that pay an advance would be enough. Apparently, it should have been "offer an advance."

Since then, I noticed that Chaosium offers an advance in their guidelines. I don't see where any other publishers do (Steve Jackson mentions an advance for editing work in their guidelines). WotC pays an advance on certain projects. Phil's guidelines don't seem to be on his web page, or in the research notes I've gathered, or I'd be glad to mention Ronin Arts' policy, too.

However, yes, many publishers will pay an advance if you negotiate for it. That means that, depending on your credentials or the writing samples you provided, or the impression you make on the company, you might not merit it.

Jim pointed out the one situation in which a publisher asking for an advance's return is appropriate: the writer fails to deliver. That's true in book publishing, too.

As far as royalties figured on net sales, I have in my possessions contracts that rely on net sales from research I've done, so the payment on cover price might not be as ubiquitous as Jim thinks or as rare as I thought.

I totally agree that it's easiest to use mathematically. If the publisher wants to pay a lower rate, he should offer a lower number, but keep the figure based on cover price. Paying on net smacks of an attempt to deceive people unfamiliar with the difference or hoping that writers won't notice.

Who has an agent in this industry? I've chatted with Ed Greenwood's agent on another forum. He might review Ed's contracts before Ed signs them, but the problem there is that, because no agent works in the industry, no agent knows what is standard and what is not. Your agent's advice might be spot on for writing for Tor but a complete miss when it comes to Mongoose. Even agents pick and choose what markets they represent, and for them to represent a writer in a new market means piles of research learning that market. It's not a casual thing.

Yes, an agent can point out some unfavorable contract points to a brand-new writer unfamiliar with what a publishing contract looks like, but how often does that writer have an agent?

Yes, I would direct an RPG contract to my agent if I had one. No, I would not trust his judgment as confidently for that market as I would the market he represents. For example, many agents will tell a writer not to do work-for-hire as a default statement. That precludes a lot of RPG writing.

I agree that most writers need help with contract understanding and negotiation. It just isn't feasible for 99% of them to turn to an agent, and the agent's benefit for the remaining 1% is questionable when it comes to RPGs. In book publishing, I consider an agent invaluable and a good agent is worth far more than his standard 15% commission.
 

JLowder

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However, yes, many publishers will pay an advance if you negotiate for it. That means that, depending on your credentials or the writing samples you provided, or the impression you make on the company, you might not merit it.
Many companies--like Wizards of the Coast, for example--pay part of what you get for a project when you sign the contract. No negotiation involved. Same with White Wolf. Every contract I've ever seen from them pays something when you sign, and that's not a clause you have to negotiate. Same with many other companies.

Depending upon your credentials you can always negotiate for better deals, but an advance against royalties, or a portion of the flat fee or per word rate paid upon signing, is standard with many companies--certainly all the larger ones. It's simply incorrect to state this is only, or even mainly, a matter of negotiation. Quite the opposite--many publishers do this as a matter of course, and a freelancer should negotiate with the smaller ones to do the same.


As far as royalties figured on net sales, I have in my possessions contracts that rely on net sales from research I've done, so the payment on cover price might not be as ubiquitous as Jim thinks or as rare as I thought.
Sure, there may be some publishers that pay on net, but they are, in my experience, the exception, not the rule.


because no agent works in the industry, no agent knows what is standard and what is not. Your agent's advice might be spot on for writing for Tor but a complete miss when it comes to Mongoose.
If your agent looks at a contract without bothering to educate himself or herself about the industry standards, it's time to get a new agent. Immediately.

And a good agent will also point out that "industry standard" is not a sufficient reason to accept a contract or clause. Doing so is tantamount to jumping off the bridge, because everyone else is did it. A good agent will point out where "industry standard" is unfair or unacceptable and work to get you something that is at least more acceptable. They do this based upon their experience with publishing outside the hobby game industry.


I agree that most writers need help with contract understanding and negotiation. It just isn't feasible for 99% of them to turn to an agent, and the agent's benefit for the remaining 1% is questionable when it comes to RPGs. In book publishing, I consider an agent invaluable and a good agent is worth far more than his standard 15% commission.
There are more resources available for someone researching book contracts to work without an agent. Organizations like SFWA and HWA have model contracts or databases that list standard terms from various publishers. A writer working with a game publisher does not have the same resources, so an agent--or thorough research, conducted with a very critical eye--is vital.

Cheers,
Jim Lowder
 

Kravell

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new ideas

I'm posting on this thread because I couldn't get a new post to open.

I liked your recent article on expanding reserve feats. Good ideas are out there, you just have to look for them. I hope you're planning on submitting some of those feat ideas to Dragon. I know they aren't big on publishing feats anymore, but I bet they'd take a look at reserve feats.

Charlie
 
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