How Ghostwriters Are Paid

The Association of Ghostwriters (AOG) gets inquiries on a daily basis from individuals with terrific stories to tell but who need help turning them into a book. Some are memoirs about triumph over adversity, others are rags-to-riches tales, or important lessons learned in the C-suite. They all sound interesting. Some might even have movie potential.

Most would-be authors are interested in pursuing a traditional publisher for their book – meaning they are hoping to interest a big name publishing house in paying them an advance and then producing their story. They have a story they think will have mass appeal, and they need a skilled writer to work with them to translate their memories or ideas into compelling reading that flows logically.

So they turn to the AOG for help in pairing them with a ghostwriter who can gather up all their stories, thoughts, observations, recollections, news reports, and other research and turn them all into a book. (There is no cost to have a project description sent to all our members.)

The vast majority of authors offer a share of the proceeds when the book sells or the movie deal is signed as payment. Many offer what probably seems like very generous compensation packages.

I have the uncomfortable task of telling them that that doesn’t work for experienced ghostwriters.

Here’s why.

Very few publishing houses today have the luxury of being able to take a risk on an unknown author – a first-timer or relative newcomer without a publishing track record. Unless the story is about a well-known public figure that everyone is already interested in and promises new details that everyone wants, very few publishers have the latitude to sign a first-time author. Those editors that do manage to get approval for a book deal with a first-time author often are unable to offer any kind of advance. That means the author – the client – will receive little to nothing up front as part of the contract.

Yes, they will likely get royalties of between 12-15% of the net proceeds, but those royalties are only paid every six months based on the number of books sold. And unless a book does very well very quickly, it will be quickly shelved without having sold many copies. Most publishers pay attention to books during the first six weeks after they are released, then they move on to the next set of new releases. So unless a book catches on quickly, warranting manpower to remain assigned to a particular title beyond its first six months in book stores, its odds of becoming a blockbuster are slim.

Even five years ago, before advances shrank to next to nothing, only a small percentage of books ever earned out their advances and started paying royalties. What that means is that an “advance” is really an advance against future sales. So until enough copies of a book are sold to earn out the advance, no royalties are paid.

Most books never earn out their advances or pay royalties.

So, as a future author or client, when you offer a ghostwriter a royalty split or revenue split, you need to understand that you are really offering to split $0. Most ghostwriters can’t afford to take on projects that have little chance of helping them pay their mortgage, pay for groceries, or even put gas in their car.

Because books today are not huge moneymakers, most authors write and publish them for reasons other than the satisfaction of sharing their story to help others. Consultants and business owners may publish in order to attract new business. Speakers may publish in order to have something to sell at the back of the room following keynote speeches, or to win more speaking opportunities. Senior executives may write and publish books to gain credibility, get noticed for government appointments, or position themselves for their next job. Books today are more often marketing tools than anything else.

For all of those reasons, ghostwriters need to be paid for their work up front, while the work is being completed, much like an attorney or consultant is paid. While authors may get work or benefit from the marketing opportunities books create, from the ghostwriter’s perspective, the major benefit is being paid for their services. Sure, the chance to learn first-hand from a client about a new business methodology or to support a celebrity interested in telling his or life’s story, can be fascinating and fulfilling.

But in the end, writers need to be paid for their work.

So when would-be authors ask for help in finding a talented ghostwriter who is willing to tell their story for a percentage of the profits, I reply to try and gently explain the economics of publishing today. Revenue splits don’t work for full-time ghostwriters.