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