News on Regnery Publishing and a Contract Tip

The following comes, with permission, from the newsletter that publishing attorney Anthony Elia has started. Five writers had brought suit against Regnery Publishing, a conservative publisher, alleging that the parent company:

...entered below market value deals with other wholly owned subsidiaries of Eagle Publishing - in some cases transferring the books at or below cost. Because the authors' royalties were based on a percentage of funds received by Regnery and not on sales by the subsidiary, the authors lost royalties as a result of the shuffle.

In addition, the suit claimed that the company was diverting sales from retail markets to its own subsidiaries, again lowering the royalty payments. The suit was dismissed. Why? Because the contract obligated any dispute to work through arbitration.

Folks, this is not the first time writers have alleged such things, nor will it be the last. I remember a case a few years ago when a book publisher was selling at a steep discount to the distributor that it owned, again artificially reducing the royalty amount. You've got to read your contracts and, in the case of something as complex as a book contract, preferably get a lawyer to go over them.

Anthony's current issue (you can sign up for the newsletter at his site, linked to his name above) also has a tip on language to include to find out more about what happens in subsidiary rights deals.