Interesting story in the New York Times about a lawsuit on the way Regnery Publishing handles author royalties from book sales with book clubs and other promotional deals:
Five authors have sued the parent company of Regnery Publishing, a Washington imprint of conservative books, charging that the company deprives its writers of royalties by selling their books at a steep discount to book clubs and other organizations owned by the same parent company.
In a suit filed in United States District Court in Washington yesterday, the authors Jerome R. Corsi, Bill Gertz, Lt. Col. Robert (Buzz) Patterson, Joel Mowbray and Richard Miniter state that Eagle Publishing, which owns Regnery, “orchestrates and participates in a fraudulent, deceptively concealed and self-dealing scheme to divert book sales away from retail outlets and to wholly owned subsidiary organizations within the Eagle conglomerate.”
[. . .]
In Regnery’s case, according to the lawsuit, the publisher sells books to sister companies, including the Conservative Book Club, which then sells the books to members at discounted prices, “at, below or only marginally above its own cost of publication.” In the lawsuit the authors say they receive “little or no royalty” on these sales because their contracts specify that the publisher pays only 10 percent of the amount received by the publisher, minus costs — as opposed to 15 percent of the cover price — for the book.
Mr. Miniter said that meant that although he received about $4.25 a copy when his books sold in a bookstore or through an online retailer, he only earned about 10 cents a copy when his books sold through the Conservative Book Club or other Eagle-owned channels. “The difference between 10 cents and $4.25 is pretty large when you multiply it by 20,000 to 30,000 books,” Mr. Miniter said. “It suddenly occurred to us that Regnery is making collectively jillions of dollars off of us and paying us a pittance.” He added: “Why is Regnery acting like a Marxist cartoon of a capitalist company?”
It seems to me that this is a legitimate complaint but that it should have been worked out in contract negotiations. If you signed a contract that had these terms then you have to live with it.
As to the larger issue of equity, it does seem a tad harsh to make a pittance off a book club selection. While the recognition and wider audience might very well be worth a lot, the financial reward shouldn’t be so minuscule. That said, I am completely lacking in context or detailed knowledge about how royalties are structured.
Anyone reading with some knowledge of how this kind of thing works with standard publishers and book clubs?
Kevin,
Let me add my take based on my own experience with publishing.
While I’m not an attorney and am not giving a legal opinion on this case, the case seems very weak to me. The fundamental issue here is how many folks would have bought these books at $24.95 or whatever, if they couldn’t pick them up through the Conservative Book Club at 4 for a $1.
I suspect that many of the readers of these books acquired them precisely because they could do so cheaply. There seems to be no question that the royalties for the books sold through bricks-and-mortar retail and online retail — which are used to calculate official sales figures, and New York Times Bestsellers lists — were correctly calculated. The authors, however, believe that had the publisher not distributed so many books at steep discount through its book club, readers would have purchased the same books at full price through traditional outlets. I’m not so sure.
With my own book, royalties are calculated based upon what the publisher makes on each sale. Copies sold at discount through the major online retailers — discounts that are passed back to the publisher as part of the deal to get listed with the online retailers — generate lower royalties than copies sold at bricks-and-mortar stores. Since my book is an academic book (and so not about making money), I’m happy for whatever exposure I happen to get. If folks buy my book through Amazon or Barnes & Noble, I’m thrilled, because those folks likely would not have bought my book — let alone discovered my book — if the title were restricted to academic bookstores.
The final word is that it’s tough to make a living solely as a writer. Keep your day job, and be happy that you gained some prominence through the book’s distribution.