McGraw Hill Textbook Authors Sue Over Slashed Web Royalties
(Bloomberg) -- McGraw Hill LLC was sued by textbook authors who claim the company has slashed their royalties by unilaterally revising the rules for how they get paid for online versions of their work.
Three of the authors filed a proposed class-action lawsuit against the publisher Friday, saying the new rules violate the terms of their contracts and will reduce their royalties by 25% to 35%.
The change involves the way the authors are paid for sales of textbooks and related study materials on McGraw Hill’s online site, Connect. Approximately 53% of McGraw Hill’s billings come from digital products, according to the complaint, which says the company and its affiliates reported total revenue of more than $1.5 billion in 2019.
The company used to pay royalties on the “entirety of revenues” from textbook sales on Connect, but recently announced it would only pay for a portion of the sales, the authors say in the complaint, which was filed in Manhattan federal court. “This maneuver amounts to a bald attempt by McGraw Hill to pass its Connect-related costs to authors.”
The company said the change in how royalties are calculated is “consistent with the terms of our author agreements.”
“Our Connect product has evolved in recent years, with a significant portion of the value now associated with its technology and features,” spokeswoman Catherine Mathis said in an email. “The calculations accurately account for the relative contributions we and each of our authors have made toward the product’s components.”
The case is Flynn v. McGraw Hill LLC, 21-cv-00614, U.S. District Court, Southern District of New York (Manhattan).
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