Why money should not flow to the writer

Yog’s law states that money should flow to the writer. It’s an old aphorism in the publishing industry, from a time when self-publishing was synonymous with vanity publishing. According to this 2003 post by Theresa Nielsen-Hayden:

For years now, we’ve been dinning Yog’s Law into young writers’ heads: Money always flows toward the writer. Alternate version: The only place an author should sign a check is on the back, when they endorse it.

Scalzi, who is also one of the more outspoken proponents of Yog’s Law, added a corrolary in 2014 in response to the argument that the rise of indie publishing renders it invalid:

I disagree, however, that it means Yog’s Law no longer generally holds. I think it does, but with a corollary for self-publishers:

Yog’s Law: Money flows toward the writer.

Self-Pub Corollary to Yog’s Law: While in the process of self-publishing, money and rights are controlled by the writer.

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So, Yog’s Law: Still not just a law, but a good idea. The self-publishing corollary to Yog’s Law: Also, I think, a good idea.

Here’s the thing, though: there’s a difference between money that flows to the writer like a meandering stream from the mountains to the ocean, and money that goes to the indie writer first and from there flows outward to the writer’s various publishing projects.

In the last couple of weeks, a massive scandal hit the publishing world when it was revealed that an accountant working at Donadio & Olson, a major New York literay agency, had embezzled millions of dollars over the course of decades from major bestselling authors, including Chuck Palahniuk, author of Fight Club. According to Kristine Katherine Rusch, this is not an anomaly:

Unfortunately, as I have been telling you all for years now, embezzlement and financial negligence is rampant at big name agencies. Almost none have systems set up to prevent it. Of the four agencies I worked with over the decades, two actively embezzled from me.

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The last time I threatened one of those agencies with a forensic accountant they threw me out of the agency overnight. By the time I got up in the morning, they had severed my relationship with them and informed all of my publishers that the payments should go directly to me. Just the threat of an audit did that. This is one of the biggest agencies with some of the biggest names in the world. Ask yourself why they were afraid of a standard business practice. You know the answer.

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Sorry, folks. I’m not crazy. I didn’t have a bad break-up. This type of financial mismanagement, the kind that led to the embezzlement, is common in these agencies. It’s becoming visible now, because traditional book sales have declined, and so it’s harder for an agency to pay one complaining client with another (non-complaining) client’s advance.

But here’s what I want you to see. I want you to look again at Palahniuk’s apology.

I apologize for cursing my publishers.  And I apologize for any rants about piracy.  My publishers had paid the royalties.  Piracy, when it existed, was small scale.

Now, I want you to think about how many big-name writers you’ve seen railing against piracy and how it’s cutting into their book sales. I want you to think about how many big-name writers blame Amazon (!) for ruining the book business and causing book sales to decline.

I want you to think about how many big-name writers who have said there’s no money in writing, not like there used to be.

All of those writers have agents. All of them.

Money should not flow to the writer. It shouldn’t “flow” at all. It should go to the writer directly, passing through as few hands as practically possible. When it does have to pass through someone else’s hands, the writer should be able to track it at all times.

The problem with Yog’s Law is that it treats a writer’s cashflow like a bunch of tributary streams, meandering lazily from the mountains until they combine into a mighty river. Only after the river flows into the ocean does the writer see any of that money. How much of it was diverted along the way? Siphoned off by unscrupulous agents or publishers? Lost to things outside of the writer’s control?

Cashflow is the lifeblood of any business, and writing is a business. Writers should know exactly where their money is at all times. A system that allows money to “flow” in such a way that the writer cannot track all of it is a fundamentally broken system, even if it follows Yog’s Law.