I've written an upmarket manuscript in four parts (I'd say general fiction, with elements of family saga and historical fiction). I've been getting occasional complimentary feedback from queries . . . but not reaching my goal in the end.
Parts 3 and 4 of the book introduce a story-line involving a 13 year old boy whose mother left him and his father, when the boy was five. It's been suggested to me that that part might make a good middle-grade novel on its own. And it might.
But here's the main question [takes me a while, but I always get to it eventually]: if I succeeded in turning that part of the book into a new middle grade manuscript, and reached the goal of publication, would that preclude ever publishing the original book for adults, which contains that story-line within it?
The adult novel would fall apart completely if I tried to write it without the boy's story within it, so that's not an option.
Neither is going back to a career as a social worker. Just sayin' . . .
When you license your work for publication to a publisher you grant them the EXCLUSIVE right to publish in this territory and those languages for the duration of the copyright.
There are further paragraphs that set out the terms under which the agreement can be terminated (out of print clauses generally) but under no circumstances would a publisher agree to remove the term exclusive from the license. It doesn't make sense for them to do so.
So, if you license Part 3 as a middle grade novel, you are contractually prohibited from offering it for sale as part of a larger book in the territories and languages covered in the contract.
[ I'm a bit puzzled as to anyone thinking that that middle part of an adult book described as a family saga or historical fiction would be suitable for middle grade. Middle grade isn't just about age. It's got very particular characteristics of language and story as well.
If I came up on a middle grade novel in the middle of an adult novel I'd be unhappily surprised and start wondering about printing errors.
Here's the best example I can think of: The Thorn Birds (also historical fiction, also a family saga) starts with Meggie as a child. That part of the book where she treks off to school is absolutely NOT designed for grade school readers even though Meggie is about six years old.
Take a look at those first few pages and you'll see.]
And don't confuse this with the right to publish excerpts or first serial rights. Those are also addressed in your publishing contract and generally have a word limit. Excerpts are limited to 7500-10000 words, and are generally meant for publicity and marketing purposes only.
First serial is an excerpt or a chapter or two maybe, that is published before the book is. Think of excerpts from important books that appear in Time or Newsweek before the book hits the shelves. That's first serial rights.
Publishing a third of the book as a separate book? Not ok, unless you're intent on spending your hard earned money the old fashioned way: retaining legal counsel.