The Conflict of Interest: Agents as Publishers

On Monday, The Bookseller reported that literary agents in the UK are “privately discussing removing a clause preventing them from acting as publishers.” This could be a troubling development. Yes, for publishers, but more importantly for authors.

It is very honest of UK agents to identify this as a change in practice and to discuss making this change. It is a major shift and deserves some scrutiny. What is really happening when an agent publishes her author? Let’s break this down.

Until recently, when an author signed with an agent, the commission structure was based on a rights sale. If rights were sold to a publisher, the agent earned a commission on the advance and royalties. Usually agents charged the author for the expenses of pitching, including photocopying and shipping of manuscripts, but they didn’t bill for their time. If the rights weren’t sold, the agent didn’t make a fee. This was clear-cut incentive. It was also the agent’s job to advocate for the author through the entire publishing process, from editing to publicity to rights reversions. If a publisher dropped the ball on something, the agent often caught the issue, stepped in and put pressure on the publisher to fix the problem.

If the same agent now wants to publish books for an author, things get a little more complicated.

If the agent wants to be a publishereven just an e-publisher, which I would argue only works on backlist because no publisher in their right mind should only buy print rightshe should buy the rights from the author, establish a royalty rate and negotiate a contract. But how is this contract negotiated? Who represents the author in these negotiations? If she want to provide services that are competitive and best for her client/author, the agent must also be prepared to provide expert production/conversion, publicity, marketing and sales services if she wants to provide services that are competitive and best for her client/author. Are most agents qualified for these crucial roles?

And of course there is the most sinister question of all: Would an agent who’s company stands to make a better profit through their own publishing wing rather than through commission on a small advance still recommend a modest deal with a smaller press to their client/potential author?

On the logistical side of things, I’m also wondering where agents will get the staff and training necessary to provide comparable services to those offered by a publishing house. That’s a substantial investment in personnel.

But what are the chances that agents will actually purchase the publishing rights from the author? (To be fair, I don’t know that agents currently publishing authors’ books do not already pay them an advance.) But if they don’t, what are we really talking about here? Will the agent front the costs of professional production, editing, marketing and retailer management, like a publishing house does, or will they charge these expenses back to the author?

If the authors pays, then the author is effectively self-publishing and paying a services manager. If the agent/services manager charges a flat fee without royalties for organizing production, publicist, retailer sell-in, things are somewhat palatable. But if in addition to this agents also deduct a royalty from the author on copies sold then there’s another big conflict. In that case, the agents/services manager would be billing like a trade publisher without providing what a trade publisher provides. The writer gets dinged twice. Why would a self-published writer pay for services and then pay royalties? It just doesn’t make sense.

Nor is it clear why the writers will want to use middlemen to self-publish.

I recognize that this idea is still in its infancy, but it’s difficult to see how it works. As agents venture into publishing, authors will have to keep a close eye on things and read their contracts very carefully. Thankfully, at least in the UK, it sounds like agents would need to have their authors sign new contracts to expand the business relationship beyond representative to publisher. But publishing houses may also want to be careful when dealing with agents who are direct competitors.

I’d love to hear what you think about this development in the comments section.