The Biggest Mistake New Publishers Make

 How a Non-Assignment Clause Can Hinder Growth

When the owner of a book publishing company decides to sell their company, they will need to establish the value of the business they have built. The sale price will be based on the company's discounted cash flow, the goodwill associated with the company's trademarks, and the soundness of its author agreements. 

This article is about the most costly mistake neophyte publishers make - a simple drafting mistake that can preclude the business's eventual sale. 

A well-drafted publishing agreement allows for the sub-licensing of rights and the assignment of the contract itself.  However, when starting out, some cash-strapped publishers rely on contracts found online or slavishly copy ones found in a book.   

Don't Let a Bad Contract Ruin Your Publishing Company

Publishers should think twice when agents and authors ask to insert a non-assignment clause in their contract. Be mindful that altering boilerplate provisions,  including warranty and indemnity clauses, can have profound real-world consequences.

 

When a non-assignment clause is imposed upon you by an agent or attorney, try to mediate its impact by carving out an exception for the sale of substantially all of your company's assets or the sale of the company to a related company. If you begrudgingly agree to a non-assignment clause for a particular transaction, do not use that agreement as a template for future deals. 

Aside from creating a unique brand, protecting your intellectual property, and insuring against media perils, investing in a well-drafted publishing agreement is the best way to add value to your company. Not only will it protect you against unnecessary legal risks, but it will allow you to reap what you have sown.   

Lloyd J. Jassin is a publishing attorney and entertainment lawyer.  He counsels clients on contracts, licensing, copyright, trademark, unfair competition, defamation, right of privacy, and general corporate law matters. His practice includes drafting and negotiating publishing and entertainment industry contracts, intellectual property due diligence, trademark prosecution, dispute resolution, and litigation. A Benjamin N. Cardozo Law School graduate, he is co-author of The Copyright Permission and Libel Handbook (John Wiley & Sons).  He can be reached at 212-354-4442 or via email at Jassin@copylaw.com.


Related Blog Post

A Helpful Checklist for Book Contract Negotiations

Contact:

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1501 Broadway, Floor 12
New York, NY 10036
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jassin@copylaw.com (email)
www.copylaw.org


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