Sounds Like Weird
22 May 2016
Ellora’s Cave has rebranded as EC for Books, so I’ll be using that in my headers from now on. I will keep the header graphic as it was, though. I’m torn about the rebranding for two reasons: often, a rebranding for a troubled company signals a new direction that only hastens its demise, especially in the tech world. On the flipside, the Ellora Caves are a sacred site in India, and it would be nice to let them have their google-fu back.
May has some interesting updates, so here’s a summary of them:
I’d heard excerpts of this letter for a couple of days, but hadn’t seen the whole letter until Jan Springer posted it yesterday. Because of questions surrounding one paragraph, I didn’t want to post until I’d read the whole thing.
Allison Kelley, CAE | Executive Director
Allison.kelley@rwa.org
RWA has no standing in relation to contracts between authors and Ellora’s Cave. Therefore, RWA’s role is limited to advocating for fair treatment of authors, and RWA has been in correspondence with Ellora’s Cave, repeatedly, regarding allegations that Ellora’s Cave has failed to make payments due and failed to revert rights to authors.
Contracts offered by Ellora’s Cave Publishing state “Publisher shall pay Author royalties in accordance with a schedule to be determined at Publisher’s discretion but in no event shall payment be made less frequently than three (3) calendar months.” The problem with this clause is the lack of specified period for which royalties will be paid. RWA continues to receive complaints from authors who report they have not received royalty statements or payments for many months.
Several authors who contacted the publisher about missing payments and have requested their rights be reverted have received the following response from Ellora’s Cave:Dear author or agent,
I’m sorry, you have misinterpreted the contract the author chose to sign. Breach of clause 16 regarding royalties payments (or any other contract clause) does not void the contract nor revert book rights to you. When a contract is breached, the party claiming breach has the option of waiting for the other party to correct the situation or may pursue legal action to gain correction of the situation. In such case, the court would typically set a deadline by which time the situation must be corrected (“cured”), and if not corrected the court would decide on further action.
The only conditions set forth in the contract for reversion of rights are in clause 1.1. If your book qualifies (meets all the conditions listed), you may send a request for reversion of rights, stating it is based on clause 1.1.
Therefore your request for reversion of rights is not granted. Ellora’s Cave continues to hold all publishing rights to the contracted books. The author has no rights to distribute or sell these books in any format or channels.
I am sorry, we in Contracts have no information on royalties payments. We can only advise you to email Royalties@ellorascave.com.In September 2015, RWA contacted Patty Marks who admitted “currently we are not as up to date with royalties as we want to be and will be,” and added that the company is trying to catch up.
Failure to pay authors in a timely manner is a violation of RWA’s Code of Ethics for Industry Professionals. Violations of this Industry Professional Code of Ethics may result in loss of privileges such as (but not limited to) listing in Market and Agent Updates, participation in workshops and pitch sessions, and the opportunity to advertise in RWA’s publications.
Allison Kelley notified Ms. Marks in September 2015 that Ellora’s Cave must refrain from contacting members or chapters regarding new submissions and refrain from participation in any RWA or chapter event until the company has achieved satisfactory resolution of the Code of Ethics violation.
Ellora’s Cave continues to be banned from RWA programs and services.
RWA has repeatedly contacted management at Ellora’s Cave to demand payment to authors. RWA has also requested that the publisher revert rights if it is unable to pay authors in full. The response we received was a letter signed by Steve Mastrantonio, attorney for Ellora’s Cave, in which he states, “any premature comment by RWA that Ellora’s Cave is in breach of their agreements is reckless, false and Defamatory.” Mr. Mastrantonio asserts that Ellora’s Cave is paying authors as it should, and “any false comments by RWA to harm his clients reputation will be dealt with in a forceful manner.”
Further actions considered:
There is little anyone can do without proof. In September 2015, Allison Kelley contacted an auditor who specializes in royalty reviews to get an idea of what would be involved in order for the board to consider funding an audit.
The following challenges were identified:
- An audit would not be comprehensive—RWA could provide funding (in the form of a grant) to conduct audit/s for one or two author/s who requested to have earnings audited.
- Accounting records maintained by Ellora’s Cave would have to be auditable. In the past, RWA funded an audit, and all we learned was that the publisher did not follow any kind of standard bookkeeping or accounting practices. Sales were difficult to determine, so there was no way to prove if royalties had been paid properly or not.
- We saw how vigorously the attorneys for Ellora’s Cave fought to keep the books from being audited during the lawsuit against Jane Litte.
RWA also requested legal advice related to authors’ rights to cancel agreements for ongoing uncured breaches of contract. We were told the issue would depend on Ohio state law, and the likelihood of success would depend on the outcome of an audit. Again, RWA has no standing to conduct an audit, and audits can only be done upon author request, and the findings would apply to authors whose earning had been audited.
The remainder of the letter was the RWA’s policies on use of funds, which can be seen in Jan Springer’s post.
What people were questioning was this phrasing:
In the past, RWA funded an audit, and all we learned was that the publisher did not follow any kind of standard bookkeeping or accounting practices. Sales were difficult to determine, so there was no way to prove if royalties had been paid properly or not.
I don’t believe this was about Ellora’s Cave/EC for Books, but rather another publisher. I don’t know which one, though.
Allison Kelley shared this with someone and I was given the okay to share.
I have no idea if the accounting records at Ellora’s Cave are kept in compliance with GAAP and are up-to-date. Hopefully, they are. The comment cited below pertains to another publisher. I felt I had to include that disclaimer so authors would be aware that audits do not always yield the information desired.
Where “cited below” in this case means the one I quoted above and commented on.
| Source | April Book Count | May Book Count | Net Change |
|---|---|---|---|
| Amazon | 3,049 | 2,783 | -8.7% |
| ARe | 3,089 | 2,984 | -6.0% |
| My Data | 3,055 | 2,844 | -6.9% |
(April as of April 11. May as of May 16 and 22.)
| Source | April Author Count | May Author Count | Net Change |
|---|---|---|---|
| Ellora’s Cave/ EC for Books | 764 | 709 | -7.2% |
| Amazon | 737 | 693 | -6.0% |
| ARe | 743 | 744 | 0.2% |
| My Data | 763 (current) 1049 (total) | 758 (current) 1051 (total) | -0.7% (current) |
(April as of April 11. May as of May 16 and 22. Also note that the Total Authors will not decrease as it’s the total of all time.)
Some authors received notice that they’d have stories reverting that appeared in anthologies, including the caveman anthologies. (I’m not certain if that’s all anthologies, especially since EC has some new ones out.)
The reason for the difference between Ellora’s Cave author counts and my data are simply that EC has already removed some authors from their site where their last EC books are mid-reversion. However, some of those authors may still have books available on Amazon and/or All Romance E-Books.
If Ellora’s Cave/EC for Books reverts all anthologies except those published this or last year, that will drop their author counts by 153 authors. This isn’t a bad thing, though, because paying royalties for multi-author volumes chews up a lot of staff time that could be better used for, say, writing checks.
Susan Spann’s a publishing attorney who posts about legal issues and publishing law. I just found her feed today, so I’m going through her feed, but this is one of the things she’s gotten the idea for because of claims like those of Ellora’s Cave’s/EC for Books’s authors.
Incidentally: language letting the author terminate if payments are 60+ days late is a new clause, but one I think we need to see. #PubLaw
— Susan Spann (@SusanSpann) May 22, 2016
And perhaps her most salient point:
Remember: having NO publisher is far, far better than having a publisher you regret signing with. Don’t get impatient. Be smart. #Publaw
— Susan Spann (@SusanSpann) May 22, 2016
If you’re looking into traditional publishing (and I’m lumping in digital first here), she’s got a lot of eye-opening content that could be useful to you.
Kerri Zane is one of the new EC for books authors; her first book with them came out this month. Here’s a profile of her launch party at a Porsche dealership in Beverly Hills.
It’s unknown how much, if any, EC for Books contributed to fund this launch party.