The Advance

Ivan Hoffman, B.A., J.D.


   Some of you may remember, as I do, the days of “ago” when publishers paid meaningful advances.   Now, because of the fracturing of the traditional marketplace which has created significant diminution of the market share of traditional publishers and other factors, only the fortunate few are in positions to garner advances of any meaningful amount.

     Historically, the concept of the advance was an amount that was designed to compensate the author for his or her bare living expenses during the time from the signing of the agreement until the publication of the book.   That concept long ago got lost and it became part of the negotiation process irrespective of when publication was to occur. 

     However, understanding the history can be instructive of some of the issues that arise when negotiating advances. 

     Customarily (and if you read many of my articles you will know that I am not big on “customarily” since all creativity is unique and what another author got or did not get in a deal is of no relevance at all as to what this author may or may not get in a different deal) advances, in whatever amount was being offered, are paid out in steps: a percentage is paid on signing of the agreement, another percentage is paid on delivery by the author of the completed manuscript to the satisfaction of the publisher and the balance is paid on publication of the book.   

     The author in this kind of transaction would certainly want to get the larger percentages of the payments early on so as to leave as little on the “table” as possible for the last payment.   On the other hand, the publisher would want to leave the largest percentage for that last step as an incentive for the author to complete the work.  But even if the percentages are divided equally according to the above formula, that leaves 1/3 of the advance payable upon publication. 

     Publishing agreements, however, often contain a provision that recites that the publisher is not obligated to publish the book for any number of reasons including reasons related to the change in market conditions or any other reason.  (Note: this article is not about the publisher not publishing due to the failure of the author to satisfactorily deliver the manuscript.)  This of course means that the last installment of the advance is not payable.  Generally, the only remedy for the author for this publisher decision is that the publisher relinquishes its rights to the manuscript and the author is able to place the book elsewhere.   However, this is often an illusory and thus meaningless remedy since a book in “turnaround” manifestly has less value than if publisher number 1 had published it.  If the market has changed in the determination of publisher number 1, it likely would be deemed changed by other publishers.  Clearly there may be exceptions to this “rule.” 

     However, there is often a further downside to the author’s said remedy in that the publisher often requires that the author repay that portion of the advance that was previously paid to the author when the author makes a new deal and as a conditoin to the release of the rights of the first publisher.  As a practical matter, that means that the manuscript is pretty much worthless since the time delay plus the requirement of repayment often makes making a deal nearly impossible or very difficult. 

     The advance, as indicated above, historically was a “lost opportunity” payment on the part of the author.   The author not only needed to be compensated during the time of writing the book but the advance also represented the author’s willingness to take the manuscript off the market during the time from making the deal until publication. 

     So the failure to obtain any publishing commitment from the publisher has implications both in terms of the lost value of the manuscript as well as the loss of the full value of the advance provisions.   

     Thus the negotiation on behalf of the author should ideally include a provision that states that the last “step” of the advance must be paid irrespective of the lack of publication of the book and that the said payment must be made by a date certain (approximately the original publication date).    Remember, the decision not to publish is, in this article, not based on the fault of the author.  The rationale, from the author’s standpoint, is that the decision not to publish represents a significant detriment to the author.  It deprives the author of the entirety of the opportunity represented by the making of the deal in the first instance.  The manuscript has been off the market for many months.   Furthermore, it has deprived the author of the value of at least the last part of the advance, which as I indicate above, is from the publisher’s standpoint, often a significant percentage of the total advance. 

     This provision is almost impossible to obtain in any negotiation.  However, since all creativity is unique, I continue to believe that if the author has created a great work and has properly marketed it, the “we don’t do that for anyone” can become “we don’t do that for anyone…else.”   

     Remember: all negotiations, in business and other endeavors, are based on a simple formula: W3M.   This stands for “Who Wants Who More.” 

Copyright © 2016 Ivan Hoffman.  All Rights Reserved. 


This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on United States law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation. 


No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.



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