Build a Foreign Rights Revenue Stream Part II

Getting a Good Deal

Bob Erdmann

When a foreign publisher makes an offer to acquire rights to your book for its country, the game is on. Negotiating a deal that is good and fair for both sides, however, can be confusing if you’re inexperienced.

The best general advice is: Be realistic and know the norms.

Don’t swallow the latest gee-whiz story you heard at a seminar or in an Internet chat room. The first thing you must realize is that value will vary from book to book, and from country to country. If your author’s name isn’t John Grisham, don’t expect your book to be valued the same way his are. And don’t expect a developing third-world country to value it the same way an established world power would.

How do you know whether an offer from a foreign publisher who wants to translate and publish your book in its own country is fair and reasonable? The rule of thumb is simply this: Multiply the total number of copies contemplated for the first printing by the estimated retail price to get the gross revenue; then multiply that by the royalty percentage (somewhere between 5 and 10 percent) to get a figure for a typical advance.

For example:

First printing 5,000 copies

Retail price $10

Revenue from 1st printing (gross) $50,000

Royalty percentage 6%

Typical advance $3,000

For uncomplicated transactions, this formula will generally work. But you should also be aware of elements that can change the deal.

Here are some specific pointers that should help you improve your bottom line:

Always use a contract you provide, not one provided by a foreign publisher or agent. But don’t try to create your own. Have an intellectual property attorney who specializes in publishing matters draft one that suits your needs.

Stipulate the rights that you are granting. Be sure you know exactly which rights the foreign publisher is seeking in addition to the language and country. Does the publisher expect book club, electronic, and other rights to be included? Value goes up for each of these if it is.

Define the advance. Always try to get the entire royalty from the first printing as the advance, using the formula above.

Set a term. Three to five years is the typical time for a grant of rights to a foreign publisher. Occasionally a publisher will ask for more, perhaps seven, eight, or ten years. If you agree to tie up rights to your book for longer than three to five years, the foreign publisher should make its offer better than the standard.

Be deferential about format. You may have published your book as a hardcover or an 8″ _ 10″ trade paperback. In some countries, a hardcover would necessitate a prohibitively high retail price, and an 8″ _ 10″ size can’t be produced. The foreign publisher wants its edition of your book to succeed even more than you. Let the publisher make the right choice for its market.

Set a schedule for accounting. Reporting of sales and consequent royalty payments should be every six months, although more and more foreign publishers insist on reporting annually. I don’t consider this a deal breaker, but if a publisher insists on annual, then you should insist on a higher advance to cover the longer period between royalty payments.

Specify payment currency. Payment should always be in U.S. dollars. Although the U.S. dollar has dropped considerably against the euro, I still feel better getting paid in our currency.

Be very specific about language and territory. Spanish-language rights, for example, might apply to many countries. If you are granting rights to a publisher in Barcelona, should those rights be worldwide or limited to Spain? If the publisher insists on world rights, find out whether it has adequate marketing and distribution in Central and South America (and possibly the U.S.). If so, world Spanish rights will be worth more than rights only for Spain, and you should get more money. If not, and the publisher is willing to license rights only for Spain, then you may not make as much on this deal, but you could make additional rights sales to Spanish-language publishers in Central and South America (and possibly the U.S.).

Be aware of the flat-fee agreement. This interesting foreign rights concept allows a foreign publisher to pay you a one-time flat fee for printing a specific number of copies, and that’s all. The amount of the fee is usually determined by the formula I used earlier (print run _ retail price _ royalty percentage). If you agree to a flat-fee agreement, specify that it terminates whenever the inventory of the printing is depleted or after a specified period (which should be shorter than the normal three to five), whichever occurs first. Or provide a clause that allows reprints under the same payment terms, or provides for renegotiating terms for future printings.

Consider artwork. If a book includes illustrations, photos, or other artwork, it may have higher value for a foreign publisher. But before you offer rights in artwork, be sure you are in a position to grant them. They may have been granted to you by another party for your use only, and granting those rights to a third party may require permission and compensation to the artist, illustrator, or photographer.

Charge for providing a CD. Foreign publishers who wish to use your cover (or other artwork) may ask you to provide it on a CD. And English-language foreign publishers (in the U.K., India, and Singapore, for example) may also ask for a CD, which would greatly simplify production for them. You are entitled to compensation for this, either in the form of a separate CD-use fee or in the form of increased advance and royalty payments.

Take account of taxes. Some countries may require their publishers to withhold for taxes anywhere from 5 to 20 percent of payments due to you; others may not require that anything be withheld. Plan your negotiations accordingly. If an Indian publisher is paying you a $500 advance and withholding 20 percent, you are netting only $400. If you’re paying an agent’s commission of another 10 to 20 percent, you won’t have enough left to go to Starbuck’s.

Some countries are participants in a treaty with the United States to “avoid double taxation.” Those will require you to submit an Internal Revenue Service (IRS) Form 6166 to them. These can be obtained from:

Department of the Treasury

Internal Revenue Service

U.S. Residency Certification Unit

P.O. Box 16347

Philadelphia, PA 19114-0047

215/516-7135; fax 215/516-1035, 215/516-2845

Request a Form 6166 for each specific country that you’re dealing with. Getting the forms will take four to six weeks (at best).

Respect cultural differences. There are nearly 400 countries in the world, and each has its own way of doing things. It’s important to understand that the world doesn’t march to the beat of our drum. Sending a letter to a Japanese on gray stationery carries a very upsetting message. Bargaining in many countries is expected, but it is insulting in others. Try to learn about the cultures of the various countries that you may be dealing with. I have made some incredible lifetime friendships with people from all over the world as a result of foreign rights activities, people I never would have met otherwise. Negotiating foreign rights deals can be fascinating and rewarding in many ways that go beyond the obvious.

Publishing consultant Bob Erdmann is a five-decade veteran of book publishing and a two-term past president of IBPA. Through his popular Foreign Rights Programs he has successfully negotiated more than 3,500 foreign rights sales for clients. Visit to learn more and see photos, or contact him via or 209/586-1566.