Tuesday, April 27, 2010

Terms to Know: Right of First Refusal

Come with me, dear readers, on a magical journey to... THE FUTURE.

In the year 20X6, you're signing the contract to publish your first book (hooray!) when you come upon a clause with the following (or similar) wording: "Fancy Pants Publishing House retains the right of first refusal on the author's subsequent book." (In retrospect, it's unlikely you'll see those exact words, unless my dream of founding Fancy Pants Publishing [FPP] takes off before 20X6.)

Back to the contract, though: when a publishing house requests right of first refusal, they're contractually obligating you to show them your second book before you show it to any other publishers. If they want your second book, they get it; if they don't, you can sell it to someone else, but they must see it and decline the offer first. Increasingly, clauses like these are finding their ways into many a first-time author's book contract.

Personally, I'm no fan of the ROFR because I generally dislike any contractual obligation that limits an author's future works or actions, and Tim O'Reilly of O'Reilly Media agrees. In fact, he advocates that if you come across such a clause in your contract, you actually strike it out. This is for a number of reasons: what if your first book doesn't do well and you want to try your second with another publisher? What if your first book does really well with the small house you first signed with, and you want to move on to a larger house that can offer a more substantial advance and more powerful marketing push? What if you simply have creative differences with the folks handling your book?

O'Reilly mentions that an author's refusing the ROFR isn't generally a dealbreaker for the publisher, though I'm no literary agent and can't really comment on whether or not that's the case. (If there are any agents in the house, I'd love to hear your comments!) This, by the way, is one of the many reasons you want a literary agent on your side if you're dealing with a publishing house: contracts are tricky beasts, and if you don't have a pro on your side, you may find yourself without recourse when your publisher asks that you fulfill a half-dozen legal obligations you didn't even know you had. An ounce of prevention, a pound of cure, &c &c.

You tell me, though, mes auteurs: what do you think of the ROFR?

20 comments:

  1. I think a term like this, if used, should allow the agent / author to solicit a competitive offer, and FPP would then have the option to match that offer. A match must be accepted, but a lesser offer from FPP could be declined.

    Although best option for the agent/writer is not to have a clause like this at all, and to have free reign to submit the MS to any publisher.

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  2. I don't like it for all the same reasons you listed; it just doesn't seem fair to me, and it doesn't encourage friendly relations between the author and publisher in my opinion.

    By the way, I love it when you talk contracts. ;) (lol, and yes, I realize how sad that is.)

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  3. I would love to be in a situation of signing a contract with the ROFR clause. This would, more than likely, mean that I'm signing a contract for a first novel. That would be great. And I think it would be great to know that someone would like to look at a "second" work.

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  4. Fancy Pants Publishing? That name is dumb. It sounds like it is so dumb. I go by Stinko Man. That's the name of talented fighter if ever there was one.

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  5. Eh, I wouldn't have a problem with an ROFR. I think it's a fair practice for a publisher taking a risk on your first book. And what's one book to an author? If things aren't working out, move on after the second book. In most cases, multi-book authors stay with the same house for the length of their career, anyway.

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  6. Thanks for bringing this to light. Hopefully it will help me know what to look for when I get to that point. Not there just yet as I only just finished the first draft of my first novel, but one can hope!

    Rebecca
    http://rebeccatlittle.blogspot.com/

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  7. ROFR is something that sounds better in theory than in practice. In addition to the issues that Eric addressed, a pretty common occurrence is that your editor on your 1st book moves to another house, and then the author is contractually obligated to work w/ an editor that may not be as enthusiastic or personally connected to the work.

    Also, not all ROFR are created equal. The one that Eric describes above is pretty straight forward, in that if the Pub doesn't like your next project, you are free to submit it elsewhere. But other ROFRs include a clause that says that the Author must get an equal or better offer from House 2, which can make things awkward for everyone. House 2 won't want to be considering a project that it may not be able to acquire, and the Author may really want to work with House 2, but won't be able to b/c of the contract.

    Most agents/authors will want to stick w/ an editor/house regardless of the contract. You get better backlist support and (hopefully) a stronger relationship w/ all facets of the Pub's staff, neither of which are easy to do these days. But if something goes wrong, you don't want a piece of paper telling you what you can and cannot do.

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  8. I think newbies probably don't mind the clause. After the uphill battle to get published, it would be delightfully refreshing to think Mr. Fancy Pants wants to read the second book as soon as it's finished!

    Newbies aren't thinking it's restrictive, though maybe they should be!

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  9. Glad you pointed this out. If I ever get to the stage where I'm signing a contract with a publisher, I'll know at least one thing to look for. I don't think it's fair to first-time writers to lock them into something like this.
    Karen

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  10. I have this clause in my first contract and I don't mind it (3 book contract, btw). The publisher has 60 days to look over my next proposal and either buy it or pass. While it means I can't shop that book around around or go to auction or the like right away, it's only for 60 days. After that, my agent and I can submit it where we will. But it also means that I have at least one guaranteed interested party who has to at least look at it. Whether that will result in a sale or not, I can't say, but I figure it's not a terrible trade-off. If they buy it, great; if not, I wait for two months and then look elsewhere.

    And, I can still pitch my original publisher something else, too. Refusing the next proposal doesn't mean they are dropping me -- just that they don't like that particular property at that particular time.

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  11. You just referenced a very old Homestar Runner joke! Major respect points, man.

    Good to know you can refuse that clause. I'd be a bit scared if I was obligated to show my work to a publishing house I didn't feel served me well with the first book, because they might accept. What an odd concept!

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  12. Yep, definitely another example of why you should never try to negotiate without a good agent.

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  13. -nods- I will keep this in mind. Thanks!

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  14. This is why agents get paid the big bucks :D

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  15. What makes it any different than signing a contract for your next three books and raising the same objections?

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  16. Maybe publishers should concentrate less on contractual handcuffing and more on giving authors an attractive enough deal that they *want* to come back. If a first refusal clause forces the author to do a deal they're really not happy with, I would say that is rarely going to work out to the publisher's benefit either. Creative work cannot be done effectively in a condition of contractual slavery.

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