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July 15, 2016

How Publishers Abuse Termination Fees: Sky Warrior Books

Posted by Victoria Strauss for Writer Beware


I've written before about termination fees in publishing contracts: why they are bad not just for authors, but for publishers, and how publishers can abuse them. Here's another case study in how termination fees can become a tool for retaliation.

Sky Warrior Books, "a press dedicated to publishing quality SFF, mystery, historical fiction, paranormal, nonfiction, and other genres", is run by publisher and author Maggie Bonham (who also writes as MH Bonham and Margaret H. Bonham). Among the lesser-known authors on its list, there are several books and anthologies written/edited by established SF/fantasy authors.

Sky Warrior's contract--which is problematic in a number of respects, including vagueness in the royalty language--has not one, but two early termination fee provisions:
12.a.ii.: Prior to publication, the Author may terminate this contract for unspecified reasons by reimbursing the Publisher for costs incurred, plus a termination fee of $500. Examples of costs incurred include expenses such as editorial and cover art.

12.f.ii.: Post Publication: In the event that the Author is terminating the agreement in order to sell the Work to another publisher, individual or company for publication, the Author shall pay a termination fee of 10% of the advance and royalties earned on the Work to the Publisher, plus purchase all remaining inventory at cost +15%, with no royalties paid on copies purchased under this clause.
Sky Warrior also appears to have issues with timely royalty accounting. Complaints can be seen at the Absolute Write Water Cooler and at Ripoff Report; I've gotten some as well. Two of the authors who contacted me challenged the lack of payment and pressed for answers, whereupon Maggie Bonham terminated their contracts and reverted their rights, without asking for money. A third author--the one who's the subject of this blog post--also got her rights back. From her, however, Bonham demanded termination fees.

The author--who has asked that I don't use her name, so I'll call her Eve--signed a four-book contract with Sky Warrior in early 2013. Book 1 was issued in late 2013. Sky Warrior has two royalty periods--January-June and July-December--with the publisher required to make "all efforts" to issue payment within 120 days of the period's close. But it wasn't until September 2014, nearly nine months after the close of the July-December 2013 royalty period, that Eve even got a royalty statement for her 2013 sales. As for payment, Bonham indicated, without explanation, that she wouldn't be doing that until December 31. (Here's where the vague royalty language I mentioned comes back to bite: if a publisher isn't contractually required to pay within a stated timeframe, but only obliged to make "all efforts" to do so, it can argue "circumstances beyond our control" and do pretty much whatever it wants.)

Meanwhile, Book 2 had been published in early 2014. Eve says she wasn't given notice of the pub date until 24 hours prior, and never saw page proofs, despite the stipulation in her contract that she be able to review and approve them (according to Eve, the book included many errors). Royalty statements and payment for Book 2, due by the end of October 2014, didn't materialize--nor did royalty statements and payment for the same period for Book 1.

By December 2014, Eve was fed up. She hired a lawyer and demanded contract termination and rights reversion for all four books, citing multiple breaches of contract. In response, Bonham categorically denied breach, and defended the absence of royalty payments by claiming that, because vendors take up to six months to pay, the contract's 120-day royalty payment window actually began to run six months after the end of a royalty period (even though there is no wording whatsoever in Eve's contract to support this). She admitted she didn't make even that extended deadline for Eve's 2013 royalties. It wasn't her fault, though: it was due to--wait for it--"circumstances beyond our control".

On the up side, Bonham did agree to revert Eve's rights--but on the down side, not for free. For Books 1 and 2, she invoked Clause 12.b.ii., levying a fee of $56.13, which she claimed was 10% of royalties for the first half of 2014 (an additional 10% of royalties for the second half of 2014 would be due "when calculated"). For Books 2 and 3, which hadn't yet been published, she invoked Clause12.a.ii: $500 for each book, plus $317 for assorted costs including editing. The total of $1,373.13 was due within 60 days; any royalties accrued and owing would be applied to this "outstanding balance." As the cherry on top, Bonham warned Eve that "any libelous or slanderous statements by her, her family members, or her associates" would result in legal action.

In my opinion, it's debatable whether Bonham was entitled to invoke the termination clauses, since Eve wasn't seeking to terminate the contract for "unspecified reasons" (she cited specific breaches) or "in order to sell the Work to another publisher, individual or company for publication" (she had no competing offer; she just wanted out). Be that as it may, for Bonham this is a win, whichever way it goes. She gets rid of a pro-active author, and if Eve pays up, she also gets some extra cash. If Eve refuses, Bonham gets to hold onto royalties she otherwise would have been on the hook for paying (in Eve's case these amount to several hundred dollars).

As it happens, Eve is an active member of the Science Fiction and Fantasy Writers of America. She turned the matter over to SFWA's Grievance Committee, which has a good record of mediating disputes between authors and publishers. Bonham, however, refused to cooperate, doubling down on her denial of wrongdoing and reiterating her her demand for money. She also accused SFWA and Writer Beware of a dastardly conspiracy:
After all, if we are harmed, you will have participated in the further erosion of independent, small presses, and I can't believe the rumor that SFWA and Writer Beware are cooperating with the Big Five publishing houses' efforts to destroy the independents once and for all. Although I did find it curious that Writer Beware's publisher avoid list is populated exclusively with small presses, often based in rural areas, far from the New York in-crowd.
Damn. And we thought we were being so discreet.

Seriously, though, I think Eve's experience illustrates how publishers can use termination fee clauses to retaliate against authors who displease them. The other authors I heard from who complained about nonpayment had their rights reverted without any demand for money. It's hard not to conclude that Eve was being punished for having the temerity to hire legal assistance.

The other takeaway here is the importance of taking contract language seriously. No matter how good a publishing relationship looks at the start, things don't always go on as they begin. Never assume that provisions in your contract won't at some point apply to you--no matter how unlikely that seems--or that your publisher, who right now seems so responsive and enthusiastic, won't invoke onerous clauses if things go south. To quote author and editor Jane Friedman, contracts aren’t there for when times are good and everyone is well-intentioned--they need to work for you when things go to hell. (For more on the danger of making assumptions, see my 2014 blog post, Evaluating Publishing Contracts: Six Ways You May Be Sabotaging Yourself.)

Bonham is now threatening to turn Eve's "debt" over to a debt collector.

15 comments :

Clayton Callahan said...

I am another victim of Sky Warrior. When the promised quarterly royalty statements did not come, I sent Bonham e-mails. To each e-mail the reply was a version of, "oops, sorry, we'll get that to you by the end of next month. And like tomorrow, next month never came. After four months of this nonsense, I sent an ultimatum and got the "hit the road, jack" e-mail announcing I was no longer a Sky Warrior author. It still took another seven months before I got a penny from when they were selling my book and I have no way of confirming it was an honest accounting.

Anonymous said...

If I were you, Mr. Callahan, I would question that accounting. Sky Warrior owes me for 15 months of sales, and there are entire months missing from the royalty reports.

Deirdre Saoirse Moen said...

Though we used to be fairly close, Maggie and I have drifted apart over the years. I'm quite horrified by this behavior.

Anonymous said...

I am in no way going to defend Maggie's actions, however, I can give some insight into the unforeseen circumstances. Maggie was in a horrible accident a few years back. She was thrown from and then trampled by a horse, resulting in serious injuries, including brain damage. (No jokes please. I'm being serious.) It took years and a lot of therapy for her to start actively working as a publisher again. This does not excuse any actions she might have taken since, nor excuse the wording in her contracts, but it should point out that sometimes unforeseen circumstances are actually legitimate.

Anonymous said...

Anonymous: "Unforeseen circumstances" are by definition things that happened after the contract was signed, not an accident, however horrible, in the past.

Anonymous said...

An accident in 2013 does not excuse the threats and the personal and professional insults to which she subjected Eve in the past 18 months.

Amazon pays monthly, on a less than 2 month delay, which means, for example, they will be paying out for royalties accrued in May by the end of July. You have to wonder, therefore, why Bonham can't pay her authors for a full year and more. Where's that money going?

And if she's still too impaired to pay her authors or do her job, then she should revert the authors' rights and shut down.

Anonymous said...

I'm really not surprised. I had a short story accepted to an anthology that Sky Warrior was putting out - an anthology I very much wanted to be in. However, the contract contained a couple of troubling provisions, including one that said the author was to bear the cost of defending the publisher against any legal actions brought against them due to the work. That language was troubling enough on it's surface, but it also meant I'd be on the hook for defending them against frivolous suits, and, because this was an anthology, potentially the costs of suits brought against any part of the anthology (e.g. defending the publisher if one of the other authors had plagiarized). When I balked at this and other clauses and asked for changes to the contract, I was flatly told no - there was no negotiating a contract for an anthology. I withdrew my story, rather than sign.

The whole episode - both the terrible contract and the rude and rather unprofessional way Maggie dealt with me through this process - left a bad taste in my mouth, and I crossed Sky Warrior off my list of publishers I would ever work with. I'm so glad I listened to my gut.

Anonymous said...

Interesting how many comments here are anonymous. Is it fear of her bullying?

Victoria Strauss said...

A lot of comments on my blog posts in general are anonymous. I allow them because writers who've had bad experiences are often reluctant to publicly identify themselves. (Writer Beware doesn't accept anonymous email complaints, however.)

Frog Jones said...

My experience with Maggie has been a little different than what I'm seeing in this comments thread.

Not saying anything about the validity or invalidity of anyone else's experience, but I've always been grateful to her for all she's done for my career and my wife's.

Victoria Strauss said...

Frog Jones, thank you for your comment and for offering a different perspective. Unfortunately your experience only confirms that there are problems at Sky Warrior, because you too have had to wait for royalties. And with apologies for being blunt, I have to say that this, from your post, is a textbook example of Small Press Stockholm Syndrome:

"No. The royalties don’t come quickly. They just don’t. But as neither of us need that fifty bucks right now in order to eat, that’s secondary from our perspective. And Maggie has never been anything but up-front with everyone about her payment schedule. She informs everyone at the get-go that marketing is the author’s responsibility. We knew exactly what we were getting into when we signed on with Sky Warrior, and it has worked as expected since."

Your publisher--whoever that may be--owes you a duty for the right to profit from your intellectual property. That means, among other things, paying you what you're owed and paying it on time.

Anonymous said...

I'm wondering what happened to the attorney? Is the attorney still involved at this point?

Frog Jones said...

Ms. Strauss -

Let's make sure I'm being clear on what I said, here. Maggie was very up-front about her payment schedule. It's slow, but we knew that when we signed on. Since that was part of the agreement from the beginning, she's fulfilling her duty to pay what we're owed and on time, as "on time" is a contractually defined term. So my experience is a lot different than the above ones, which are talking about not being paid according to their contractually defined schedule.

It's not Stockholm Syndrome if you go into the relationship knowing what to expect. Stockholm Syndrome occurs when the relationship abuses you so much you convince yourself it's for the best.

I think I was pretty straightforward as well. Sky Warrior isn't for everyone. But there's been a significant number of advantages I've received from publishing with Maggie, and Maggie took a risk on me when nobody else would.

So the question, from my perspective, is whether or not a quarterly schedule as opposed to a semi-annual schedule is a big enough disadvantage to outweigh the advantages I've received. For me, it is not. For others, it may be. That's all I'm saying.

Anonymous said...

I have now heard or read at least two sides to the "Eve"-Sky Warrior problems and I am not sure whether one or the other is entirely right, assuming everyone is being truthful, as far as they are concerned, but they certainly have divergent perceptions of what happened nd what got said. It does appear from the timeline, that the books were published during the time Maggie was recovering from the horse accident, and that the contract was very likely signed before it happened (though I am not certain of that).
BYW, as a freelance magazine writer, I have been required to accept publishing contracts with worse indemnity clauses that Sky Warrior's (and renegotiating contract terms seldom happens in the mag. world). It's hard for me to even imagine a successful defamation claim against one of my fantasy stories.

David Boop said...

"However, the contract contained a couple of troubling provisions, including one that said the author was to bear the cost of defending the publisher against any legal actions brought against them due to the work."

I can explain this one here based on the experiences publishing my first novel. I have a song lyric in "She Murdered Me with Science" that I had to acquire the rights for. Any sort of thing like that, lyrics, lines from movies, slanderous comments (whether fictional or not) are the responsibility of the author, not the publisher. Had I not acquired the rights to use the song lyric and the estate of the lyricist chose to sue, it would be up to me to defend myself and the publisher, not the publisher's responsibility. This is not an uncommon clause within publishing contracts.

David Boop

 
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