The Author’s Guild issued a sharp rebuke to publisher John Wiley & Sons for delivering a sort of Trojan Horse to authors.

The “horse” came in the form of a notice to authors who had contracts with newly acquired Bloomberg Press that the company was downwardly adjusting its royalty rates. Buried inside a saccharine (“We are pleased to inform you…”) salutation was a message that Wiley was conforming Bloomberg’s royalty to the rate stipulated in Wiley’s boilerplate – an “adjustment” that would pay the authors 24% and 43% less than they were getting.The authors were invited to sign an amendment.

The Guild’s outrage that authors were being snookered was expressed in unusually strong language. “The contract amendment, which provides no threshold level of sales for a work to be considered in print, essentially grants Wiley a perpetual right in an author’s book for a pittance. The 5% of net receipts royalty rate for print on demand editions is as lowest we have ever seen.” And “This is no way to do business. The letter is shocking from a publisher of Wiley’s stature.” “In our view, Wiley should tear up any signed letters it has received and start over, forthrightly explaining to its new authors the contractual changes it is seeking and how this may affect their income and their right to terminate their publishing contracts.”

We haven’t viewed Bloomberg contracts but assignment language in many publishing contracts guarantees that an acquiring company cannot change contractual terms without the express consent of the author. Signing the amendment would do just that, and the Guild wants to make sure authors know that it is a potential trap.

The full text of the Guild’s notice is below.
Richard Curtis
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Wiley’s Deceptive Letter to Bloomberg Press Authors: “We are pleased to inform you” that we will be slicing your royalties up to 50%

John Wiley & Sons acquired Bloomberg Press, the books division of Bloomberg, in March. At the end of April, it began sending a letter to hundreds of Bloomberg Press authors purporting to inform them “about a few differences in the accounting systems of Bloomberg and Wiley that it will be helpful for you to know about.”

While this sounds innocent enough, it isn’t. If signed by an author, the letter is actually a contract amendment that will materially and adversely affect the royalty rates of many Bloomberg Press authors.

Among other things, this contract amendment would:

1. Change royalty rates based on retail list price to rates based on net receipts. We’ve reviewed several Bloomberg Press contracts. All provide for royalty payments based on the retail list price (although we understand that there may be many based on net receipts). The Wiley letter misleadingly presents this to the author as good news: “We are pleased to inform you that we will be paying your royalties on the net amount received…” This change will, for many authors, effectively slice royalties by up to 50% for some book sales. Wiley’s letter fails to disclose that.

2. Empower Wiley to keep an author’s book in print with a lowball print on demand royalty of 5% of net receipts. (Bloomberg Press had no print on demand program.) The contract amendment, which provides no threshold level of sales for a work to be considered in print, essentially grants Wiley a perpetual right in an author’s book for a pittance. The 5% of net receipts royalty rate for print on demand editions is as low as we’ve seen.

We’ve asked an independent royalty auditor to review the affects of these contractual changes on royalty income. The royalty auditor found reductions of 24% to 43% using actual sales figures and applying Wiley’s amendments. (The precise affect of the amendments will vary by title, depending on particular categories of sales of the work.)

The Authors Guild strongly urges Bloomberg Press authors to not sign this letter without careful consideration. If you have received this letter, consult your agent or a publishing attorney or contact a lawyer in our legal department so you understand precisely how this amendment would affect your rights and royalties. Important: if you have already signed the letter and returned it to Wiley, contact our legal department immediately. Non-Guild members are welcome to contact us as well. All communications will, of course, be held in confidence.

This is no way to do business. The letter is shocking from a publisher of Wiley’s stature. In our view, Wiley should tear up any signed letters it has received and start over, forthrightly explaining to its new authors the contractual changes it is seeking and how this may affect their income and their right to terminate their publishing contracts.

The Authors Guild