Protecting Your Dreams

A Framework for Creative Contract Negotation

Added on by Gamal Hennessy.

by Gamal Hennessy

Creative people just breaking into their field often see contracts as a necessary evil. At worst, they ignore it as much as possible, hoping the other side will treat them fairly. At best, they look at it as an obstacle to overcome, something they just have to get through with as much speed and as little pain as humanly possible (See Understanding Contract Law: Don’t Wait Until It’s Too Late). Budding creative professionals like this often lose legal control of the stories, characters and worlds they’ve created. They trade a potential source of revenue for a painful lesson in contract law (See Deal With the Devil: How Creators Get Their Rights Stolen).

Seasoned creative see contracts as an opportunity to turn their talent into profit. They might spend weeks or months negotiating a deal, hiring attorneys, accountants and other professionals to hammer out all the details. They learn from their peers and the people who came before them to figure out what to give up and what to ask for. They turn their characters into merchandise, their stories into books and film and their worlds into franchises.

One of the main differences between the new creator and the veteran is the tactics and framework they use to negotiate and close deals. Alex Furmansky recently published a piece in Inc. Magazine where he discussed seven concepts for contract negotiation (See: Don’t Sign Anything Without Knowing These Seven Contract Negotiation Tactics) including:

  1. Control the first draft
  2. Ask for the kitchen sink
  3. Keep the relationship healthy
  4. Make sure the other side can look good
  5. Deal with the decision maker
  6. Use an intermediary
  7. Learn everyone’s real motivations

This list isn’t specific to creative contracts, but it does offer some useful concepts we can use. The last five are key in any contract you do. Take the last tip as an example. If you’re negotiating a publishing contract with a comics company, but he insists on getting the film and merchandise rights, does he really want your book, or is he looking for a really cheap way to acquire properties to option to a studio? Taking some time to learn his motivations will help you figure out what’s really important.

In addition to Mr. Furmansky’s list, I’d like to offer three more items to round out the framework for your deals. I try to discuss this with each of my clients and most of them have found it to be helpful:

  1. Understand what you want from the deal: Not everyone wants the same thing from their contracts. Some people are looking for recognition to build their portfolio. Others want money up front. Some want back end participation. Many want creative control of the property. Some people want it all. The only way for you to know what you can and can’t agree to is to know what you want to walk away with when the deal gets signed. (See Losing Control and Loving It)
  2. Understand what each section of the contract means: The first couple pages of a deal often have the basic terms both sides have agreed to. They’re like the frosting on a cake. You need to make sure what’s under the frosting is actually cake and not a pile of manure. Contract language can be dense, circular and confusing, but that’s where the money and control are won and lost. The devil is in the details (actually, the lawyers are in the details here, but sometimes that’s the same thing) and you need to know what’s going on in the details. (See You Signed the Contract, But Do You Know What It Says?)
  3. Decide when you need to walk away: Not every deal is worth signing. If you have to give up everything just to close a deal, it might make sense to walk away. This can be a difficult proposition, especially when someone has worked for years to get their big break, but the creative industry is littered with artists who gave away their life’s work, watched it become a hit and get nothing in return. At least if you walk away from a bad deal, you still have the potential to shop property somewhere else. (See How to Reject a Bad Contract)

Taken together, these ten concepts can be a helpful guide for any contract you encounter. They won’t replace professional advice on contract drafting and negotiation, and they won’t guarantee you get the best deal, but you’ll be in a better position with these than if you just ignore it and hope the other side treats you fairly.

Have fun.

Gamal

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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.