David vs. Goliath (Negotiating Power in Comic Book Contracts)

By Gamal Hennessy

When I analyze contracts for my clients, I point out all the language in the agreement that has been written to favor the publisher. I point out all the ways that contract clauses are used to limit their control over their work and their ability to make money. I offer them suggestions on how to make the contracts more equal and level the playing field. But I am aware that the terms of most of these deals will never be changed. As a comic book creator, you often must deal with the reality that you have little or no negotiating power relative to a publisher. Taking this fact into account will help you make decisions about what deals you will or will not get into and help you understand how they will impact your career.

Scarcity Breeds Power

Publishers have to take the financial risk of releasing an unknown and unproven book. In order to mitigate this loss and to give themselves the potential for substantial revenue and control on the back end, many of them incorporate biased language into their contracts. Many creators sign those contracts because of their lack of power.

It is easy to understand why comic creators normally have very little negotiating power. It boils down to supply and demand and market scarcity.

• The publishers currently corner the market on supply. They control the means of production (printing) and direct distribution (comic shops, bookstores, online and digital) and often control secondary distribution (merchandise and media licensing)
• The number of comic creators who want to gain access to the publishers supply is massive compared to the number of publishers. Who knows how many potential artists and writers are out there dreaming of getting their books in print, movies and games?
• The scarcity of publishers relative to the abundance of creators produces a situation where publishers can afford to offer one sided deals. Every unknown creator who demands a superior deal can be rejected by the publisher because there are ten or twenty other creators willing to accept an inferior deal. Since the publisher is primarily looking for books to fill their publishing plan, one unknown book is just as valuable as any other from their perspective.

Options for Creators

In light of the reduced negotiating power that undiscovered creators have, does it make sense to push for a bigger deal for a creator owned project or page rate? Yes and no. While you might not be able to wrestle a six figure advance out of Marvel, there are options you can pursue to make the most of your work.

• Establish your reputation in the industry by taking on work for hire projects that will get you exposure for your skill without exposing the characters and story lines that you are saving for a creator owned work.
• Find a more flexible small press that will offer more reasonable terms for new creators.
• Explore self-publishing if only to increase your name recognition in the market.
• Accept the biased deal as a means of name recognition.

While none of these methods is a quick road to fame and fortune, they can boost your negotiating power over time. An unknown creator has almost no leverage with a publisher. A creator with a following who represents tens of thousands of copies sold per month can command lucrative exclusive contracts, back end participation deals and creator owned contracts that give them considerable revenue and control potential. The best analogy is the contract situation in professional football. As a player, you may not make very much on your first deal but once you prove yourself as a marquee player, your subsequent contracts can be huge.

Need to Understand Your Agreements

Whether you make the choice to accept a one sided deal, negotiate better term or walk away, you need to understand what the terms are for the deal you are being given. It might make sense to take a bad deal now if it will boost your career later. The key is making an informed decision about what you are doing. Whether you decide to use a service like mine or not, knowing what you are signing and why is key to building and leveraging your negotiating power.

Best

Gamal Hennessy

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 at gamalhennessy@gmail.com FOR A FREE CONSULTATION.

All for One and One for All (Collaboration Agreements in Comics)

by Gamal Hennessy

Most of the contracts I deal with are between an artist and a publisher. I take the publisher’s standard contract and explain it to the artist in language they can understand so they know what they are getting into, for better or worse. What clients don't normally ask me to do is is create agreements between the artists working on a creator owned book that define their relationship with each other. What they often don't realize is that this type of contract is just as important as the one between the artist and the publisher. Without this type of agreement a otherwise successful partnership can lead to misunderstandings, conflict and disputes down the road that can be just as costly as any disagreement with a publisher.

Keeping the band together

Comics are like movies, films and theater because they are artistic works that are normally created through a collective effort. While there are some creators who do everything, most books are created by the continuing collaboration between the writer, artist, inker, letterer and colorist. In the same way that a band combines the talent of each instrument to make music, a creative team comes together to make comics (even if they only come together in a cloud server that they upload the work to).

Just like a band or a movie crew; each member of the team should know what he or she is getting out of any deal that involves the property they work on. This might not be significant when you are selling a couple hundred books a year on your website and losing money on the cost of production. This becomes a huge issue when a property is picked up for a film, TV show, video game or merchandise deal. It helps to have all the issues squared away before Hollywood starts calling. If you wait too long, anger, resentment and actual litigation could tear the team apart just when things start to take off.  That is where the collaboration agreement comes in.

Putting the ducks in a row

A well drafted collaboration contract contains six elements:

1. Who is responsible for creating each element of the property
2. How is the copyright for the property going to be distributed between each creator
3. How will the revenue be distributed between each creator
4. Who has decision making authority for the property
5. Who is the primary contact for the property
6. What happens when someone leaves the creative team

While the contract can be overly complex with just these elements, the best ones address these issues without a large amount of legal gymnastics. At the same time the elements of a collaboration agreement should not conflict with the terms of any agreement with a third party publisher or licensee of the property. Your legal advisor can review both contracts to ensure there is harmony between them.

Other options

Of course, there are cases where only one or two of the artists on a book will actually own the copyright and the other participants may participate on a work for hire basis. Also there are some instances where the creative team actually forms a separate company to manage and exploit the property. In those cases, as with the collaboration agreement described here, a contract should be in place before any work is done to protect the rights of each artist in relation to each other as well as to a publisher.

Have fun.

Gamal

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 ATgamalhennessy@gmail.com FOR A FREE CONSULTATION.

Saluting the Comic Creators Bill of Rights

The San Diego Comic Con opens today. It is a huge, multi industry event that encompasses film, television, video games, merchandise and of course, comics. In a year when the second most successful movie of all time is based on a comic, it is clear that the comic industry and the professionals in it have a lot to be proud of.

As artists and fans flood the convention center, independent creators should keep in mind the changes in the industry that make the potential for long term success much more viable. In the past, comic writers and artists had very little control over the stories and characters they created. While there are still major challenges in the industry, the current situation is a major improvement from what was 25 years ago.

In the 1980’s artists struggled with big and small publishers over everything from credit to payments to getting their original art back. In 1988, a group of comic professionals including Scott McCloud, Dave Sim and Richard Pini drafted a Creators Bill of Rights which is analogous to a US Declaration of Independence for comic professionals. It lays out the minimum benefits a creator should expect from their publishing partners and has been adopted by the Comics Creators Guild. Since its inception it has led to successful creator owned imprints including Dark Horse, Epic and Vertigo.

When I was at Marvel, many creators sought to establish themselves with work for hire projects so they could pursue their own creator owned deals. The Creator Bill of Rights made that situation much more possible lucrative. When you are licensing your property, it pays to compare the language of your contract to the Bill of Rights. Any provision that reduces or eliminates the rights to your property should be questioned and if possible, removed the contract.

As you enjoy the trailers, panels and energy of Comic Con, remember that there is a foundation that you as a creator can use to be a part of and benefit from the fruits of your creation.

Have fun.

Gamal  

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 AT gamalhennessy@gmail.com FOR A FREE CONSULTATION.