I heard a disturbing rumor -- and I have to repeat, this is a rumor, not something I saw personally -- about an agency contract that takes a standard commission on an author's self-published books. Self-published. So the author would be contractually obligated to pay 15% of their self-published royalties to the agent even if the agent has never laid eyes on the book.
The theory behind this is that the agent is "building" the author's career through traditional sales, and the author benefits from that in direct published sales, so the agent is entitled to a cut.
This is utter garbage, of course. Not every tenuous connection creates an entitlement. What's next -- if you write on your day job, they can take 15% of your day job salary, too? Agents act as brokers, selling books to publishers and earning a commission on those sales. Why should they ever be entitled to earn anything without performing the work?
You know what's really going on here? They're gambling that you're more desperate than they are. They're pretty desperate, some of these agents, because sales and advances are falling across the board, so agents are taking hits just as much as anyone in this business. Or, to put it another way, 15% of nothing is nothing. Actually, that's 15% of 8% or whatever your trad pub contract calls for. But your direct pub royalty rate is probably anywhere from 30% to 70%, depending on how you distribute and price the book, so 15% of that is a bit more of a cut to the agent. As an added bonus, it's free money because they didn't have to lift a finger to earn it.
But there will be some writer out there who's been struggling to break in and who sees this as the one chance to do that. And they'll sign away their kidneys and lungs if they think that will get them a good book deal. So what's 15% in perpetuity on work the agency never sold? As long as the agent signs you, it's all good, right? No. Not right at all. For one thing, you don't know that this agent will ever sell a single thing for you. Plenty of authors are signed but never sold. You don't know whether this agent will treat you well or screw things up for you -- and if you don't understand that agents can screw up a writer's career, you haven't spent much time talking to writers about agents.
Don't get me wrong. A good agent is worth every (legitimately earned) cent you pay them. If you get a good agent, thank your lucky stars and buy them chocolate. But how do you know what kind of relationship you'll have with your agent when you're at the signing stage? Oh, you can go by reputation. Maybe Agent Alice has a great reputation because she represents a bestseller or two. But sometimes these powerhouse agents focus all their attention on the stars. They take you on in the hope they can get a star deal for you, too, but if they can't, they're stuck with you just as you're stuck with them. That's how their stables get filled with authors who wonder why they can't get a call back.
And reputation only tells a partial story. In this business, in public, we're all quick to praise and slow to criticize. (Notice, for example, that even though I'm not hiding my annoyance at this contract provision, I have not named the agency or the agent. I might be mouthy, but I'm not that stupid.) If you don't share a confidential relationship with at least one of the agent's clients, you might not be hearing the whole story.
Be smart, kids. It's a cruel and treacherous world we're living in.
ETA: Since this post went live this morning, I've received confirmation of two agencies doing this. One was the original agency that prompted this post, and the other is a mid-sized agency with questionable ethics. Anybody know what the AAR has to say about this?