Monthly Archives: August 2008

Authors Guild to Work With F&W/Adams Media to Review Accounting Practices

August 15, 2008. F&W/Adams Media has contacted the Authors Guild in response to our August 13 member alert about an arbitrator’s award to Guild member Sherry Argov. F&W expressed its confidence in its royalty accounting practices and has offered to work with the Guild to demonstrate that its accounting systems are appropriate. We’ll take F&W up on its offer and will be reporting the results of our review to our members.

F&W has agreed to address any royalty accounting issues brought to our attention by Guild members. We’ll only do so, of course, if our member approves of our taking this step.

Authors Guild to Study F&W/Adams Media Royalty Accounting

Internal e-mails, including an admission that Adams Media has “no system in place for tracking inbound Royalty Statements from translation rights deals,” and a recent arbitrator’s ruling in Massachusetts awarding $209,000 to an author raise serious questions about the accounting practices of F&W Publishing and Adams Media.

Authors Guild member Sherry Argov brought an arbitration more than four years ago [editor's correction: the audit attempts began more than four years ago; the arbitration began two years ago] against F&W Publishing and its subsidiary Adams Media regarding the payment of royalties for her book “Why Men Love Bitches.” The arbitrator found that F&W had purposefully withheld documents needed by Ms. Argov to complete the royalty audit to which she was contractually entitled. This amounted to an “unfair and deceptive practice” under Massachusetts law, leading the arbitrator to award $209,000 to Ms. Argov. The arbitrator’s review of the work done by F&W’s outside expert, however, led the arbitrator to conclude that domestic sales had been properly accounted for.

Accounting for foreign editions and translations appears to be a particular problem for F&W and Adams Media. In a stunning e-mail dated October 18, 2006, an F&W employee admits, “We have no system in place for tracking inbound Royalty Statements from translation rights deals. We do not go looking for missing statements from our Translation rights customers. No one is responsible for the collections on either open contracts nor balances indicated on Royalty statements.” Another employee adds, “in many cases, we have not received statements from the foreign publishers per the contracts (specifically, on Sherry’s titles, but there are lots of others).”

The arbitrator didn’t rule on foreign royalties. Instead, it urged F&W to report to Ms. Argov what amounts may be owed her for foreign editions, so the company could avoid arbitration on that issue.

For more information, please see the Publishers Weekly story.

We’d like your help on this matter.

  1. If you have knowledge of F&W or Adams Media’s royalty accounting practices, please get in touch with the Authors Guild’s legal department.
  2. If you are an F&W or Adams Media author (whether you are a Guild member or not) and would like to be kept up to date on this matter, simply send us an e-mail.
  3. Feel free to forward and post this alert in its entirety

 

Contact: legalservices@authorsguild.org or 212-563-5904.

The Authors Guild (www.authorsguild.org) is the largest society of published book authors in the United States.