Ask Daphne! An ABNA follow-up question

Some gorgeous shoes you can get (or could have at one point — let me know if anyone finds them for sale again!) on Amazon for J.P., who has a follow-up to Julie’s question about the Amazon Breakthrough Novel Award contest. He writes:

Regarding the grand prize for the 2009 Amazon Breakthrough Novel Award, I found this:
Upon the full execution of the publishing contract, Penguin will pay the Grand Prize winner US $25,000. This US $25,000 payment is an advance against the royalties to be earned by the Grand Prize winner under the publishing contract.
The publishing contract with Penguin is not negotiable, and Grand Prize winner must sign “as is” (as described in Rules) if he/she wishes to enter into the publishing contract being awarded. The publishing contract will provide for payment to the author of a non-refundable advance of $25,000 against anticipated royalties for world rights in all languages with hardcover royalties of 10% on the first 5000 units sold; 12.5% on the next 5000 units and 15% thereafter. Trade paperback royalties are 7.5% and mass market royalties are for 8% for the first 150,000 units sold and 10% thereafter. First US publication format (i.e., hardcover, trade paperback or mass market) will be determined in publisher’s sole discretion based on, among other factors, the type of book and market conditions.
Total ARV of the Grand Prize is US $25,000.
I’m not sure how to read this. Does this mean that the winner will get a $25,000 advance and won’t make any more royalty money ever? Also, it seems like the majority of the finalists were adult fiction books. Do you think that Middle Grade or YA has a decent chance?

No worries, JP. An “advance” as the term is being used here, and as it is used throughout the publishing industry, is recognized as a set amount of money the publisher pays to the author “in advance” of royalties coming in. As you can see above, Amazon and Penguin are paying royalties on both hardcover, trade paperback, and mass market sales. All of these royalties on books sold by the publisher are applied to the author’s account. When the royalties from sales add up to MORE than $25,000 (i.e. the amount the publisher advanced to you in expectation of sales), then any additional money is paid to you directly. You don’t get the $25,000 twice, but you get it once, as an advance, then the publisher is able to pay themselves back, and you split the rest of the sales income.
Make sense?
Now, I do want to say that the part that bothers me about the above rules is where it states that “the publishing contract with Penguin is not negotiable.” Any agent or contract manager worth their salt would probably have a conniption if you as an author wanted to sign a non-negotiable contract. I can sort of understand why Amazon is doing this, in order to make it easier to give the prize — “just sign on the dotted line” — but knowing how much work we here at kt literary put into reviewing contracts before we recommend our authors sign them, I can’t imagine that the deal you would get through this contest is likely to be as good a deal, all other things being equal, as an agent would get for you.
Finally, though the full rules don’t seem to indicate that you couldn’t submit a MG or YA novel, they do specify a word count between 50,000 and 150,000 words, which might limit some submissions. The biggest reason not to submit a YA or MG novel that I can see is that the judges are all specialists in adult fiction, and I would guess they are mostly going to be looking for adult fiction. Though there’s no reason why you couldn’t submit a novel for a younger age range, consider your competition and the judges’ expertise before you do.
Good luck!