Random House of Canada, M&S do the foreign rights shuffle

September 9, 2009 by · 1 Comment 

The Canadian publishing industry was scrambling yesterday to understand the implications behind the surprise announcement that two of the industry’s heaviest hitters – Random House of Canada and McClelland & Stewart – have shitcanned dissolved their foreign rights departments and will henceforth be contracting rights sales out to a newly created agency. The new foreign sales agency, The Cooke Agency International, was born out of the pre-existing Dean Cooke Agency, but will be run wholly independently.

As a result of this move, several prominent figures in Canadian publishing have lost their jobs. Out at Random House are Jennifer Shepherd, vice president and director of rights and contracts, associate rights director Ron Eckel, and associate rights director Fiona Harvey. At M&S, Marilyn Biderman, director of rights and contracts, and Krista Willis, rights manager, are out of jobs. The rationale for this move, according to Brad Martin, CEO of Random House, is to bring down the costs associated with sales of foreign rights, which are not constant year-over-year. Martin told Quill & Quire Omni yesterday that rights sales are “feast or famine,” and that in slow years the amount of money they bring in is insufficient even to pay for the salaries of department staff members. Moreover, Martin asserts that the cost of sending a single staffer to the Frankfurt Book Fair runs between $20,000 and $30,000. In the press release announcing the deal, Martin was quoted as saying, “The reality of our business is that we can no longer financially justify maintaining a subsidiary rights department of our size to pursue as its primary duty the foreign-rights sales of the limited catalogue of titles we have to offer. This move will be a more efficient course for our foreign-rights business and for our company.” He was echoed (sort of) by Doug Pepper, head of M&S, who tossed out this gem of businesspeak bafflegab:

As the rights market both in Canada and abroad experiences transformations, and efficiencies become more imperative, it has become obvious to me that M&S’s continued success selling our authors’ rights internationally depends on fresh strategies and possible outside partnerships enabling us to combine strengths and increase our potential market leverage.

Um, right. (Given that Pepper made this statement in the context of a press release announcing the new deal, was the word “possible” really necessary?)

There are a number of reasons to be concerned about this news. The first, and most obvious, is that if two of the largest houses in Canada, both backed by the Bertelsmann multinational conglomerate (M&S is 25% owned by Random House, which is wholly owned by Bertelsmann), can’t afford to keep their rights departments, that doesn’t bespeak great confidence in the ability of the industry as a whole to weather the financial uncertainty it is currently experiencing (and will continue to experience even after the current recession is a thing of the past).

But there is also the question of how The Cooke Agency International plans to maintain transparency and avoid conflict of interest while selling foreign rights for the clients of other agencies. Dean Cooke, head of The Cooke Agency, is assuring people that the new agency, which will be run by Cooke’s colleague Suzanne Brandreth, will be a completely separate agency for the specific purpose of avoiding conflicts. However, that doesn’t address the fact that the new agency will be representing other people’s clients for the purposes of foreign sales. Agents have been holding on to foreign rights more tenaciously in the last decade or so, but when they do sell those rights to a publishing house, it is on the understanding that any subsequent rights sales will be handled by the house itself. True, rights departments employ subagents in foreign markets, but that’s not quite the same thing as purchasing the right to sell into foreign territories from one Canadian agent then turning around and handing that right to another Canadian agent. Arm’s length or not, it wouldn’t be hard for The Cooke Agency to turn to an author it had successfully sold rights for and say, “See what we can do? Maybe you want to consider changing representation.”

The Cooke Agency International insists there will be no poaching of authors. Cooke told Q&Q Omni that this was written into the agency’s contracts with Random House and M&S. And Pepper downplayed the potential for conflict, telling the National Post that his company would make efforts to “keep church and state very separate.”

Nevertheless, other Canadian agents have good cause to be concerned about this turn of affairs, and about the way it was handled. Although the idea to outsource its foreign rights had apparently been percolating in the halls at Random House for close to two years, yesterday’s announcement came as a complete surprise, not least to the in-house staffers who were informed about their departures yesterday morning. Bruce Westwood, head of Westwood Creative Artists, called the move “inelegant,” which is probably one of the more polite terms to describe it. Whether The Cooke Agency International will be successful in selling Canadian writers into foreign markets is still to be determined. But this deal leaves a lot of unanswered questions, and will likely face some close scrutiny in the days and weeks ahead.

Comments

One Response to “Random House of Canada, M&S do the foreign rights shuffle”
  1. M.C.(Bo) Olson says:

    Ironic really. The novel for which I wanted to sell Foreign Rights, is titled “Keep the Change,” sub title: “Money is Canceled.” It seems that my book explains very well the underlying attitude concerning the difference between price and value. It is always tough to hear someone losing their jobs unexpectedly.

    Yours truly,
    M.C.(Bo) Olson.