Victoria Strauss -- Blu Phier Publishing: Another Contract "Gotcha"

Some of you may be aware of the issues surrounding yet another troubled small publisher, Blu Phier Publishing.

It's a familiar story: A light bulb goes off over the head of someone with an interest in writing/publishing, but no professional experience in either. He starts a publishing company. Because he doesn't have the proper knowledge base, and can't be bothered to spend time acquiring it, he crafts a nonstandard contract (here's a brief analysis by me), provides inadequate editing and copy editing, cannot maintain professional design or production standards, and, unable to distribute or market in any meaningful fashion, puts the onus of making sales on his authors. The upshot: The publisher gets into logistical and financial trouble. Delays occur. Monies due aren't paid. Excuses, recriminations, and abrupt changes in policy ensue. The publisher limps on for a while. Eventually it goes belly up, with or without returning its authors' rights.

Well, that last bit, the belly up part, hasn't happened yet with Blu Phier. But the rest of it has. The saga has been followed at Absolute Write, and on a number of blogs, including The Rusty Nail, ButterFludget, and Cussedness. If you don't want to take the time to peruse the considerable amount of material at those links, a glance at the Publisher's Corner page of Blu Phier's website will give you a sense of how it does business. A sample:

Q: Why does your company get the rights to an author's books and never release those rights?

Answer: When an author writes a book he/she creates something very precious to him/her and they become protective and possessive of it. In a larger publishing company they generate books by the thousands and all they see is numbers and marketability. In my company however I am as attached to the books as the authors. I often get excited at the release of a new book because my money and my efforts helped bring it to the public. Once I publish a book it becomes a part of Blu Phi'er family and I get very possessive over it.

All righty, then.

The most recent controversy involves royalty statements. Per The Rusty Nail, Blu Phier recently sent a mass royalty report email to its authors, in lieu of more conventional individual royalty statements (I'll just note the huge unprofessionalism of this, and move on). Sales figures for many of the books were followed by this statement: "No royalties paid until publisher is reimbursed for expenditures."

This apparently has been a surprise to at least some authors. It shouldn't have been.

Here's the Royalties clause in an early version of BPP's contract:

[Blu Phier Publishing] agrees to pay client a royalty of 30% of the cover price per book sold, 15% of the cover price for all books sold by a wholesale distributor who [sic] has been granted a 45% or more discount by BPP (after all funds expended by B.P.P. in the production of the book have been reimbursed).

It's not what you'd call crisp wording, but it does make clear that BPP intends to recoup its production costs from sales before paying royalties. In other words, the publisher keeps what should be authors' income. Plain and simple, this is back-end vanity publishing.

A few months later, in part as a result of criticism at Absolute Write, the contract was revamped, and the Royalties clause became much more murky (all errors courtesy of the original):

B.P.P. will pay The Author royalties based upon profits obtained from net sales as reported by the B.P.P's distributors as follows: 15% of all profits. B.P.P. will pay The Author royalties based upon profits obtained from net sales from B.P.P.'s own website as follows: 30% of all profits.

The word "profits" in a royalty clause is ALWAYS a warning sign. Too often, writers assume it's just another way of saying "net income." It's not. When a publisher pays you based on net income, it's paying you based on the actual money it receives for your book (usually, cover price less any discounts to wholesalers or retailers). When a publisher pays you based on profits, it's paying you based on the actual money it receives, less costs involved in publishing and marketing your book (often not detailed in the contract, so you have no idea of what will actually be deducted). At best, this lowers the amount of money on which your royalties are calculated. At worst, it allows the publisher to manipulate your royalty payments in whatever way it wishes--conceivably, down to zero.

The Royalties clause of BPP's amended contract doesn't define what "profits" means. However, moving down to the Statements and Payments clause, we find the following:

B.P.P. shall forward to The Author via email detailed monthly statements concerning all book sales made by B.P.P. B.P.P. shall also deliver to The Author via email a statement of the total cost connected with the publication of The Work, the total profit B.P.P. will obtain for the sale of each book, and the projected number of books needed to be sold for B.P.P. to recover all publication costs.

In other words, exactly as in the original contract, BPP intends to recoup publication costs before paying royalties. Either through craftiness or ignorance, BPP never actually says so straight out. But putting this clause together with the Royalties clause, it’s pretty clear what BPP means by “profit.”

The moral of this tale? Aside from the obvious (avoid amateur publishers), there are several.

First, royalties paid on profit is never a good thing to see in a publishing contract. Second, if your publisher wants to recoup its production costs out of what should be your royalty income, it's nothing more than back-end vanity publishing. Third, read your publishing contract carefully, and consider the meaning of every word. Fourth, contract clauses don't exist in separate vacuums: They have bearing on one another. Wording in one clause can substantially change the impact of wording in another, or clarify a previous clause whose wording is vague or ambiguous.

And finally, as always: Caveat writer. It is your responsibility to understand the contracts you sign--or, if you don't, to obtain advice from someone who does.