Q: I have just had a novel published by a small publishing house in Montreal, and there is already talk of adapting this into a film. The original publishing agreement does not include subsidiary rights, and the publisher — who is in touch with the movie interests — wants to write a separate deal between me and him over the movie rights. I have no fundamental objection to this, but don’t know what the split between author & publisher should be. Can you tell me what is usual/standard in such cases?
A: The usual/standard in such cases is to try hard to develop a fundamental objection to this. It’s customary for many publishers in the US and Canada not to acquire film rights to the books they publish. The custom in Europe and elsewhere is just the opposite: publishers acquire not only publication rights but also film, TV, and other “subsidiary rights.”
It seems that the only rights the publisher acquired to your novel are the publication rights. And you retain film and other “subsidiary rights.” If that’s the case, the split between you and the publisher should be 100/0, in your favor. Film rights to your novel are your property, and there is no reason why you should cut in the publisher. Why stop at film rights? Maybe you should also split with the publisher the proceeds from the sale of your boat?
The only reason you would share the proceeds from the sale of you boat with your publisher is if the publisher acts as a broker in the sale of the boat. You could rationalize the split of the film monies the same way. Maybe it the publisher acted almost like a talent agent for you and drummed up all this film interest. Of course, more likely, the publisher didn’t lift a finger — someone probably read your novel and called the publisher.
So I would recommend the following two-step approach: first, write him an especially warm, straight from the heart, thank you note (I can email you my standard thank you language I copy and paste when I’m grateful somebody unsuccessfully tried to take advantage of me); second, repeat the first step until the publisher stops calling you.
But assuming you have too much cash already and want to throw some at the publisher as an act of misdirected charity, I suppose nobody could stop you. You would have to look at it as a talent agent type situation — if you engaged a talent agent to sell movie rights to your book, you’d pay 10%. So if you have to give the publisher something (because you’re bad at business, are under a vow of poverty, or the publisher hypnotized you to), it shouldn’t be more than 10% (maybe even 5%) of the cash that you actually get for the film rights and that is left after you first pay all of your related expenses (like legal fees you should pay some entertainment lawyer to review the papers you will be signing); and in any case, what you pay the publisher should be capped at the amounts the publisher paid you.
If you decide to cut the publisher in, the separate film deal must be crystal clear that you don’t need the publisher’s permission to sell film rights and that all film rights are exclusively owned by you and not the publisher. By the way, under these circumstances, in the US, your payment to the publisher would constitute a gift (for which you’d have to pay a gift tax); that would be different, if the payment was not a gift but truly a finder’s fee or some sort of talent agent compensation.
This blog was originally published as part of Legal Ease, Film Independent’s weekly column on legal matters pertaining to the entertainment industry. To see other LEGAL EASE columns please click here.