Wednesday, March 27, 2013

Does Regnery Publishing Cheat Its Bestselling Authors?

Posted by Nicholas Stix

This was discussed at the time at Althouse.

Some lefties had a field day with this at the time, pointing out that the Wall Street Journal’s Richard Miniter, who organized the lawsuit, because the publisher was, he said, making “jillions” of dollars at his expense, had written an influential article decrying the civil bar for litigation abuse.

Miniter, who said that he was only interested in “justice,” not money, welshed on his contract with Regnery, and ended up having to pay back $150,000 in ill-gotten gains to the publisher.

* * *
Conservative Authors Sue Publisher
By Motoko Rich
November 7, 2007
New York Times

Five authors have sued the parent company of Regnery Publishing, a Washington imprint of conservative books, charging that the company deprives its writers of royalties by selling their books at a steep discount to book clubs and other organizations owned by the same parent company.

Bill Gertz, author of “Treachery: How America’s Friends and Foes Are Secretly Arming Our Enemies.”

Jerome R. Corsi, co-author of “Unfit for Command: Swift Boat Veterans Speak Out Against John Kerry.”

In a suit filed in United States District Court in Washington yesterday, the authors Jerome R. Corsi, Bill Gertz, Lt. Col. Robert (Buzz) Patterson, Joel Mowbray and Richard Miniter state that Eagle Publishing, which owns Regnery, “orchestrates and participates in a fraudulent, deceptively concealed and self-dealing scheme to divert book sales away from retail outlets and to wholly owned subsidiary organizations within the Eagle conglomerate.”

Some of the authors’ books have appeared on the New York Times best-seller list, including “Unfit for Command: Swift Boat Veterans Speak Out Against John Kerry,” by Mr. Corsi and John E. O’Neill (who is not a plaintiff in the suit), Mr. Patterson’s “Dereliction of Duty: The Eyewitness Account of How Bill Clinton Compromised America’s National Security” and Mr. Miniter’s “Shadow War: The Untold Story of How Bush Is Winning the War on Terror.” In the lawsuit the authors say that Eagle sells or gives away copies of their books to book clubs, newsletters and other organizations owned by Eagle “to avoid or substantially reduce royalty payments to authors.”

The authors argue that in reducing royalty payments, the publisher is maximizing its profits and the profits of its parent company at their expense.

“They’ve structured their business essentially as a scam and are defrauding their writers,” Mr. Miniter said in an interview, “causing a tremendous rift inside the conservative community.”

Traditionally, authors receive a 15 percent royalty based on the cover price of a hardcover title after they have sold enough copies to cover the cost of the advance they receive upon signing a contract with a publisher. (Authors whose books are sold at steep discounts or to companies that handle remaindered copies receive lower royalties.)

In Regnery’s case, according to the lawsuit, the publisher sells books to sister companies, including the Conservative Book Club, which then sells the books to members at discounted prices, “at, below or only marginally above its own cost of publication.” In the lawsuit the authors say they receive “little or no royalty” on these sales because their contracts specify that the publisher pays only 10 percent of the amount received by the publisher, minus costs — as opposed to 15 percent of the cover price — for the book.

Mr. Miniter said that meant that although he received about $4.25 a copy when his books sold in a bookstore or through an online retailer, he only earned about 10 cents a copy when his books sold through the Conservative Book Club or other Eagle-owned channels. “The difference between 10 cents and $4.25 is pretty large when you multiply it by 20,000 to 30,000 books,” Mr. Miniter said. “It suddenly occurred to us that Regnery is making collectively jillions of dollars off of us and paying us a pittance.” He added: “Why is Regnery acting like a Marxist cartoon of a capitalist company?”

In an e-mail statement, Bruce W. Sanford, a lawyer with Baker Hostetler, a Washington firm representing Eagle and Regnery, said: “No publisher in America has a more acute marketing sense or successful track record at building promotional platforms for books than Regnery Publishing. These disgruntled authors object to marketing strategies used by all major book publishers that have proved successful time and again as witnessed by dozens of Regnery bestsellers.”

The authors also say in the lawsuit that Regnery donates books to nonprofit groups affiliated with Eagle Publishing and gives the books as incentives to subscribers to newsletters published by Eagle. The authors say they do not receive royalties for these books.

“You get 10 per cent of nothing because they basically give them away,” Mr. Patterson said in an interview.

The authors argue that because at least a quarter and as much as half of their book sales are diverted to nonretail channels, sales figures of their books on Nielsen BookScan, which tracks about 70 percent of retail sales but does not reflect sales through book clubs and other outlets used by Eagle, are artificially low. Publishers use these figures when determining future book deals, and the authors argue that actions by Eagle and Regnery have long-term effects on their careers.

Mr. Miniter said that when he was negotiating a book deal with Threshold Editions, a conservative imprint of Simon & Schuster, he could have gotten a higher advance if BookScan reflected the true quantity of sales of his books.
According to BookScan, Mr. Miniter’s “Shadow War” sold 46,000 copies in hardcover, and “Losing Bin Laden” sold 36,000 copies in hardback.

Mr. Miniter, who spearheaded the legal action, said he became aware of the discrepancies in royalty payments while defending a separate arbitration initiated by Regnery over a canceled contract. Mr. Miniter said that during the arbitration, which is pending, he saw royalty statements in which it appeared that about half his books’ sales had not gone through stores, and that his payments for those sales were much lower than the payments for bookstore sales. He contacted other Regnery authors and learned that they saw similar patterns on their royalty statements.

Joel Mowbray, author of “Dangerous Diplomacy: How the State Department Threatens America’s Security,” said he was particularly disappointed in Regnery and Eagle because they had so championed conservative authors. “These guys created the conservative book market,” Mr. Mowbray said. “Before them, conservatives were having to fight, generally unsuccessfully, to get books published.”

The authors, who say in the lawsuit that Eagle has been “unjustly enriched well in excess of one million dollars,” are seeking unspecified damages. But Mr. Miniter said, “We’re not looking for a payoff; we’re looking for justice.”

* * *

Regnery Authors’ Lawsuit Dismissed
By Anonymous
Human Events
January 31, 2008

A federal judge yesterday dismissed the lawsuit filed late last year by five disgruntled authors against Eagle Publishing, the parent company of conservative book publisher Regnery Publishing.

“We are vey [sic] pleased with the judge’s dismissal of the lawsuit,” said Marji Ross, president and publisher of Regnery. “We work hard to make every book we publish into a best-seller, and to make every Regnery author both successful and satisfied.”

Indeed, Regnery has had a remarkable string of bestsellers in recent years, putting together a track record that is unmatched in the book publishing industry. During the past six years, several New York publishing giants have launched conservative imprints to compete head-to-head with Regnery, but of the 72 conservative books that have hit the New York Times bestseller list since 2002, 23 were published by Regnery — an astonishing 32%, and far more than any other publisher in the country. This despite the fact that Regnery publishes a small fraction of the number of books published by its competitors, such as Random House or Penguin. The “second-best” conservative imprint had only six bestsellers in the same period.
The group of authors in the lawsuit was led by former Regnery author Richard Miniter, who acted in apparent retribution against Regnery. Regnery is pursuing Miniter via arbitration after Miniter walked out in the middle of a two-book deal. Miniter had signed a two-book contract with Regnery, but only delivered one book before signing a new contract with Simon & Schuster for the same book he had already sold to Regnery. Ironically, S&S has reportedly now cancelled their contract with Miniter for non-delivery.

“We tried everything we could think of in order to resolve the situation with Rich,” said Ross, “but once we found out he had actually signed a contract with another publisher while he still had a contract with us, we felt we had no choice but to file an arbitration suit against him. It just wasn’t right for him to keep our advance and theirs.”

For more HUMAN EVENTS coverage of this issue, visit:

[Anonymous was so jubilant over the dismissal of the lawsuit, that he forgot to mention that Human Events belonged to the same corporation as Regnery. By the time Human Events published the next story, the editor responsible for such matters remembered to note it.]

* * *
Author Ordered to Repay Advance After Breach of Contract
By Anonymous
Human Events
March 12, 2008, 6:38 a.m.

An arbitrator for the American Arbitration Association has found in favor of Regnery Publishing, instructing author Richard Miniter to repay his advance to Regnery.

In his March 10 ruling, the arbitrator concluded that Miniter had breached his two-book contract by failing to deliver the second book. Miniter then failed to return his advance, and instead signed a contract with another publisher.

“We are pleased that the arbitrator agreed with our position,” said Marji Ross, president and publisher. Ross added that the final award included repayment of the advance, as well as a portion of Regnery’s lost profits and hearing fees.

“We honor our commitments to each of our authors, and we work very hard with them to ensure their books are successful. We were reluctant to pursue Rich on this, but we felt we just couldn’t let him walk out on us and sign with another publisher without at least returning our money,” Ross continued.

Earlier this year, the federal court in the District of Columbia dismissed a related lawsuit filed by Miniter and four other disgruntled authors against Regnery’s parent company, Eagle Publishing.

“We certainly hope this week’s arbitration ruling puts this dispute behind us,” said Ross. “Our business is publishing serious non-fiction books and turning as many of those books as possible into New York Times bestsellers. That’s our passion, that’s what we’re good at, and that’s how we want to spend 100% of our time.”

Established in 1947, Regnery Publishing is the oldest conservative publisher in America. Following founder Henry Regnery’s motto, “It is our purpose to publish good books, wherever we find them,” the company strives to publish books that spark debate and ultimately make a difference in every community. Over the years Regnery has published such conservative classics as God and Man at Yale by William F. Buckley, Jr., The Conservative Mind by Russell Kirk, and Witness by Whittaker Chambers. Recent New York Times bestsellers include Bias by Bernard Goldberg, Power to the People by Laura Ingraham, and Real Change by former Speaker of the House Newt Gingrich, as well as volumes by Dinesh D’Souza, Mark Steyn, Mark Levin, David Limbaugh, Bill Sammon, and Chris Horner.

[Regnery Publishing is a sister company of HUMAN EVENTS]

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