It’s All in the Fine Print
Writing and negotiating custom publishing contracts is about as much fun as going on a diet. It takes discipline and patience but the outcome is worth all the effort. These contracts, of course, are longer and more detailed than insertion orders, but they don’t require a ream of paper. In fact, for a sub-$1 million project, the shorter the better. Six to 10 pages can cover everything. Custom publishing projects are built on relationships, not legalities. A good contract lawyer, with publishing experience, should help you develop the template and should review all contracts you initiate or receive prior to signing.
Here are 11 points covered in our custom publishing contracts:
- Specifications of the deliverables. This section covers who does what. For instance, we just signed a magazine contract with an organization for which we are managing all aspects. The client is working with us on strategic editorial decisions, is providing us the names of and access to renowned sources in the subject area and has final authority over the content. This is spelled out, as are the number of pages, paper stock, frequency, page count, and interactive deliverables with allowed changes to specs made in writing.
- Services. This section details the services provided. For instance, editorial management would include assigning the articles, copyediting, proofreading and fact-checking.
- Length of the contract. Length usually varies from one to five years. Obviously, the longer the contract, the better. For clients who insist on one year, incorporate an automatic renewal unless notice is given 60 days before the end of the term.
- Rights usage. For some projects, we own the content. For many, the client owns the content. The section needs to also spell out the rights of freelance writers, who normally work for hire, and for photographers and artists who usually grant one-time usage, plus appropriate Web usage. This section can get tricky since some clients want more photo usage than one time in the magazine, or one year on the Web in the magazine format. Anything is possible, as long as clients will spend the appropriate money to make it happen.
- Payment. Spell out the agreed-to price and your terms for payment. Custom publishers get paid many different ways: half up front and half when the deliverables are complete with 30-day terms; monthly retainers; or in one-third increments. In some instances, we receive 100 percent up front, and I know another publisher who requires it. It has to make sense to the client as well as the custom publisher.
- Cancellation. There are numerous ways to attack this. Some custom publishers insist on a no "out" except for cause. We don’t believe in that concept. For an alternative, James Offel, vice president and general manager of DCP, a San Francisco Bay Area-based custom publisher, recommends assigning a kill fee. If the client cancels the contract for any other reason than cause, the client has to pay a percentage of the per-issue base fee for the issues the client cancels. "Custom projects can take into account amortization of some of the start up costs over the term of the agreement and that the price to do a single issue (for example) would be considerably higher than the price per issue in the event a client was committing to doing twelve quarterly issues over three years," says Offel.
- Confidentiality. All contracts have a clause that prohibits both parties from divulging information about the other. It also usually says that press releases and announcements need prior approval.
- Non-solicitation. Our contracts state that during the course of the contract and for one additional year we can’t recruit or hire someone from the client staff and vice versa.
- All that indemnification stuff. Don’t even ask. Just have your lawyer put it in and negotiate with the client lawyer.
- Litigation or arbitration. Identify which state would house litigation or arbitration if problems arise.
- The masthead. Make it clear. Will it say you or the client is the publisher? Sometimes we are listed as publisher on behalf of a client.
Jane Ottenberg is president of The Magazine Group, a custom publishing firm headquartered in Washington, D.C. She is on the board of the Custom Publishing Council.