Option Clauses: Pros and Cons

A writer recently asked me whether option clauses in publishing contracts are objectively good or bad.

The answer, as always, is: “It depends.”

Sure, if a publisher includes an option clause in your contract, they are signaling an intention to invest in you and your career—a preference that you share your future work with them before you take it out wider to other publishers.

That’s a great feeling, right?

The downside is that if you end up not liking the publisher, or if the editor you enjoy working with leaves and you’re stuck with a new editor you don’t like, or some other unintended event happens that makes you less happy with the house, you may be stuck with them for your next book.

Sydney Pollack (as talent agent “George”) tells Dustin Hoffman as Tootsie in the movie of the same name: “It’s a one-way option—theirs!” This comment is about locking Hoffman’s character into a role he only landed by disguising himself as a woman. He needed the money, but doesn’t want to spend the rest of his career hiding behind the “Tootsie” persona.

OK—that’s an extreme example but it does illustrate how an option works. The option clause gives the publisher the exclusive right to consider your next work. It doesn’t give you any particular rights, and if you don’t want to work with that publisher again, you’re potentially out of luck.

Many options simply require the author and publisher to negotiate in good faith if the publisher wants to exercise the option. If the author isn’t happy with how the negotiations end up, the author can usually reject the offer, but may then be limited in the terms they can accept from another publisher on the same book. Some option clauses don’t allow the author to accept less favorable terms from another publisher if they don’t end up taking the offer from the original publisher.

Of course, the option gives you more flexibility than a multi-book deal. If you sell more than one book to the publisher in the initial contract, you are locked in to keep working with that publisher on those other books. Multi-book deals are common in series contracts but also often for standalone books where the publisher really wants to commit to working with a particular author (and to lock in that author’s next work so the author won’t go elsewhere with it).

What’s wrong with being locked into a particular publisher?

Nothing in particular. If your relationship with the editor(s) is going well and you’re happy with them, it’s definitely a sign of their good faith and interest in your work that they want to keep working with you.

If you don’t have an option, does that mean you can’t show the publisher your next work? Of course not. If you like working together and your contract doesn’t include an option, you should definitely talk to that editor/publisher about your next project if it’s potentially a good fit for them.

What if your next project isn’t a good fit for your original publisher?

Well, if you don’t have an option clause, it’s not a problem—you just send it to whoever you like.

If you do have an option clause, you have to go back to your contract to see what the option covers. If it covers “your next work” period, then you have to show the publisher your next project whether they’re likely to be interested in it or not. For example, if you sign with a children’s publisher for a picture book and your option says you’ll give the publisher an exclusive look at your next book, even if your next book is a memoir, you theoretically have to show it to them first. They likely won’t want to publish it, so that will effectively kill your option. You’ve shown them the next work; they’ve passed on it, so now you can send it to anyone else and your option no longer exists. You fulfilled your obligations under the clause by showing them your next work and they didn’t want it. End of story.

This is why many agents and attorneys (and savvy authors) suggest narrowing the option clause to the kinds of books the original publisher is at least interested in, and maybe even further than that. Options can be as narrow as “the next book with the same characters as this book in the same genre” or “the next book set in the same fictional universe of this book.” Sometimes they’re a little broader and cover a particular genre or market category: for example, “the next picture book” or “the next nonfiction picture book” or “the next nonfiction picture book biography.”

Narrowing the option can be a good idea if you can negotiate it because it’s a show of good faith and interest in working together in the future on both sides—author and publisher—but it doesn’t lock you in for work you may not want to share with that publisher. It also doesn’t stop you from sending other work out to other publishers while you’re working on the first book.

Many authors write across different genres and don’t want all their projects held up by a single option clause. It can take a long time to publish a book and these authors don’t want to wait until edits on the first book are finished before they can do anything with their next book. Many option clauses won’t require the original publisher to consider the next book until major edits are finished on the first book. That’s another downside of options or at least options that are very broad.

So options are neither good nor bad. But they should be negotiated thoughtfully upfront to avoid problems and holding up other work down the line.

And of course my usual disclaimer applies: nothing in this column is intended as formal legal advice, but hopefully it is helpful by way of background information.

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