Attorney, Author, and Business Consultant for the Comic Book Industry

What the Valiant Movie Deal Means for Comics, Movies and You

Added on March 10, 2015 by Gamal Hennessy.

One of the bigger pieces of entertainment industry news this week focused on the deal between Valiant Comics and a Chinese based company called DMG. The details of the deal haven’t been made clear, but the initial reports suggest DMG has pledged to invest “a nine figure sum” in creating a film and TV universe for Valiant properties. (See Valiant Entertainment Gets Nine Figure Funding for Movie Division)

Paying the Money

In any licensing or production deal, there are at least two sides to the story. On one hand, you have DMG who appears to be trying to get a slice of the lucrative shared universe pie, but it is hard to understand their motives at this point. Why would a Chinese company, with access to potentially billions of creative minds invest so much effort into intellectual property with limited cache? Why not create an original shared universe with less baggage, complications and cost? I understand properties like Iron Man and Guardians of the Galaxy didn’t have mainstream cache before their films came out, but Marvel focused on those properties because they already owned the rights to them. They didn’t have to shell out big money to a third party and then dump more money into bringing them to the big screen. DMG appears to have overpaid to join the connected universe wars.

It could be DMG is using Valiant as a future landing spot for talent it plans to lure away from Disney/Marvel and Warner/DC. Once the established creators see a former minor player as a new deep pocket, they might be willing to jump at the chance to join Valiant’s roster. A move along those lines could shift the balance of power away from Marvel’s dominance in film and DC’s leadership on TV and make the entire industry more competitive.

Getting the Money

No matter what DMG plans to do, the other side of the story is the important piece for producers, writers and creative people of all types. This deal, to the extent it comes to fruition, elevates an unknown independent comic publisher into an international entertainment force. But this transformation didn’t happen overnight. Valiant has been publishing since 1989. Its titles and roster have changed over the years, but their story is a classic example of three concepts I tell all my clients:

You never know when or how your characters could become popular, so always prepare for potential success by making sure you own the rights (See What Can We Learn from the Success of Guardians of the Galaxy?)
Always treat your art as an investment and get all the legal protection you can (See Treat Your Art Like an Investment)
Take a long term view of your work and keep creating even if your first work isn’t a hit (See How to Break In and Stay in Comics)

Of course, the DMG/ Valiant deal could be a complete disaster. It might be the beginning of the end of the golden age of comic book based entertainment (See Can We Have Too Many Comic Book Movies?) But I don’t think so. Film, television, books and interactive media can all share in the windfall of increased interest in new properties. You can get a piece of the pie too, but only if you’re rights are protected.

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.

Your Exclusive Engagement

Added on February 26, 2015 by Gamal Hennessy.

By Gamal Hennessy

Many people don’t read the contracts they sign. Even fewer people read the “boilerplate” language often found at the end of the agreement. People want to know things like when they’ll get paid, how much they’ll get paid, and what they have to do to get paid. Avoiding so-called “boilerplate” might be a natural response to getting a contract, but the clauses at the end of an agreement have a significant effect on, and could completely alter where and how the money flows.

Over the next few weeks, I plan to shed some light on typical boilerplate clauses in entertainment contracts. This isn’t going to be a definitive treatise on legal concepts or the final word on the current status of contract provisions. This also isn’t going to be a replacement for actual legal advice about your specific contract. My goal here is to help artists, writers and other creative people become better informed about various aspects of contracts they might be confronted with.

In this second installment, we look at the concept of exclusivity.

The word “exclusive” is often used in entertainment marketing to trumpet some special event or limited time offer. We hear about exclusive engagements in theaters, exclusive releases in video games and exclusive production deals in film and television. While the word designates a special event in ad copy, the term exclusive has even more impact when it comes to creative contracts. The restrictions and the costs of exclusivity are important considerations for any artistic professional.

Concept

Exclusivity is a concept modifying a grant of rights or access to goods and services. You are in essence, excluding everyone else from the right, good or service. The opposite of exclusive is non-exclusive.

The easiest real world example I can offer is a car vs. a cab. When you buy a car, you and the people you designate are the only people who can use the vehicle, until it is repossessed, stolen or destroyed. When you hail a cab, you can use the vehicle for a little while, but before you got in and after you get out anyone can use that vehicle, assuming the cabbie will stop for them.

The entertainment industry is filled with examples of exclusivity. When I worked at Marvel, we often signed A-List writers and artists to exclusive deals to keep them from working with DC. Film distribution companies always push for exclusive domestic distribution rights to a film. Publishers can obtain exclusive rights to an image used in a cover. An actor or director could be retained on an exclusive basis for a period of time for a particular project. Almost every avenue of entertainment and media has some relationship with exclusivity, so understanding its impact is important to everyone.

Economic Impact

In any exclusive agreement, there are at least two parties who need to deal with the scope and the cost of the contract: at least one side gives exclusive rights and at least one side gets them. The side you’re on dictates what your goals and obstacles are and how you can massage them in your favor.

The person or company giving away exclusivity limits their ability to generate revenue based on the rights granted. For example, if you release a book through Amazon’s KDP select program, you can’t publish the book on any other platform for at least 90 days. Likewise, a screenwriter who has an exclusive deal with a production company gives up the ability to generate multiple streams of revenue by writing for other artists. Parties in this position naturally try to charge more to get into an exclusive deal to cover the lost revenue streams. At the same time, they try to limit the length or term of the exclusivity to reduce the financial impact of the arrangement (See Eternity is a Long Time in Creative Contracts)

The person or company getting exclusivity limits competition in the market. If only one company can show a movie, release a game or throw a concert, that entertainment is perceived as more valuable because of its scarcity. Exclusivity doesn’t always work directly. In video games, an exclusive PS4 title still sells at the same price as a multi-platform game, but if the system has more high-quality exclusives compared to the competition, the value of the PS4 system increases, not just the value of the game. To maximize the benefits of an exclusive, the side who gets it often tries to keep their rights forever.

The Shell Game

Like most legal concepts in contracts, there are situations where the impact of a word changed its initial meaning. Under certain circumstances, the grant of an exclusive license in certain media can amount to a change in overall ownership and control, especially if the rights granted are broad and the term is forever. For example, I’ve reviewed graphic novel licenses for my clients where the publishers wanted exclusive print publishing, film, television, video game, internet, stage play and other rights everywhere, forever, amen. In this case, a simple deal for print publishing is an attempt to tie up the property in every conceivable form. I try to advise my clients to avoid these types of deals, especially when there is no compensation. (See Get What You Give: Rights and Revenue for Creators)

Even parties who get exclusive rights need to be careful, especially when services are involved. Hiring an independent contractor is easier from a legal perspective than hiring an employee, but getting the exclusive rights to a person’s services might change your legal relationship with them depending on the nature of your working relationship. Producers in film, television, music and even publishing should be familiar with their state’s labor laws and withholding requirements whenever they consider bringing in exclusive talent, or they could find themselves on the hook for several unforeseen costs.

Exclusivity is a powerful aspect of entertainment law. Like fire, nuclear energy and love, it should be handled carefully to make sure no one gets hurt.

Have fun.

Gamal

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

The Wheel of Time Offers a Cautionary Lesson for Turning Novels into Film

Added on February 19, 2015 by Gamal Hennessy.

By Gamal Hennessy

Imagine you wrote a story. It’s a popular story, selling forty-four million copies over 14 connected novels spanning from 1990 to 2013. Now imagine your type of story is popular, because stories in the same fantasy genre, like The Hobbit and Game of Thrones, have been cleaning up in movies, TV and video games. Finally, imagine you’ve licensed your story to a production company created just to produce your work and they signed a distribution deal with Universal to distribute your story to the masses.

Are you excited? Can you see yourself inviting J.K. Rowling and George R.R. Martin to your castle in Davos for a poker game with solid gold chips? Hold that thought.

What if I told you there is such a story, The Wheel of Time written by Robert Jordan? What if I also told you the only TV or movie adaptation ever made of this story in thirteen years was a half hour TV show that aired on FXX at 1:30 am without any advertising, marketing or official notice? What if I told you the show was thrown together weeks before without the knowledge or consent of Jordan’s estate? (See The Sad Lesson of The Wheel of Time) It’s not as exciting now, is it?

The Wheel of Time problem stems from two related contract concepts. The first is the loss of control a writer gives up in exchange for optioning his book, play or comic to be made into a movie (See Losing Control and Loving It). This is a normal aspect of film licensing. Most of the time, a competent production company can adapt a written story to the aesthetics of the screen in a way that makes money. The production company in this case seems unwilling or unable to bring the book to life.

The second problem revolves around the retention of rights. Many licenses for literary properties only last a certain number of years. This is known as the term. The term can be extended as long as the company holding the license continues to release work based on the story. You can see quite a few examples of this in modern film. To a certain extent, the Spider-Man, Fantastic Four and X-Men franchises all get new films every few years to prevent Disney/Marvel from becoming even more of an entertainment juggernaut than it already is (See Is the New Marvel Universe a Secret War on Fox Super Hero Films?). But in the case of Fox and Sony, the source material gets a big budget treatment and star power put behind it. The movies aren’t thrown on to a third tier cable station in the middle of the night without anyone knowing about it.

Hope isn’t lost for an authentic Wheel of Time TV franchise. Many popular characters, including Superman, Terminator, James Bond and Spiderman had to fight in court before they could fight on screen. But creative professionals need to learn from the Wheel of Time debacle. Not every deal is a good deal. Time frame and control of rights matter, even when you’re a novelist or comic author thinking about movie rights. You might not be in the best position to make a deal (See David vs. Goliath), but you and your attorney should strive to give your property the best chance for success (See Treat Your Art as an Investment)

Double Indemnity: Are You Protected?

Added on February 3, 2015 by Gamal Hennessy.

By Gamal Hennessy

Many people don’t read the contracts they sign. Even fewer people read the boilerplate language often found at the end of the agreement. People want to know things like when they’ll get paid, how much they’ll get paid, and what they have to do to get paid. Avoiding boilerplate might be a natural response to getting a contract, but the clauses at the end of an agreement have a significant effect on, and could completely alter where and how the money flows.

Over the next few weeks, I plan to shed some light on typical boilerplate clauses in entertainment contracts. This isn’t going to be a definitive treatise on legal concepts or the final word on the current status of contract provisions. This also isn’t going to be a replacement for actual legal advice about your specific contract. My goal here is to help artists, writers and other creative people become better informed about various aspects of contracts they might be confronted with.

This week’s topic is a big word with the potential for a bigger impact: indemnification.

What is an indemnity? An indemnity is a promise one party makes to another in a contract to protect against a breach of the contract terms. For example, suppose Jack agrees to write a story for Stan. Stan pays for the story, publishes it and starts making money. Then Bob comes along and sues Stan, with Bob claiming that he wrote the story first. If the contract between Stan and Jack has the proper indemnity clause, Stan can go back to Jack and make him deal with, and possibly pay for, Bob’s lawsuit.

Why is this important? When you make a deal with someone, you want to be protected from potential problems your business partner might create. It does you no good to hire someone to build something for you and then get sued when the defective item hurts someone else. Indemnities are designed to provide protection from potential legal and/or financial problems created by the contract. For example, if you pay $10,000 for a screenplay but then get dragged into an infringement suit for $10,000,000 you probably want the screenwriter to help deal with the issue.

Where can you find the language? Indemnification language is often located near the middle or the end of a long form contract. I often find it close to the representations and warranties section.

What’s included in an indemnity clause? Language varies from contract to contract depending on the lawyer who writes it and the nature of the agreement, but many indemnification clauses contain three elements:

A promise for one side to indemnify the other for losses resulting from a breach of contract
A standard of notification where the side seeking indemnification has to contact the side who is supposed to provide indemnification
A determination of who will control the defense of the lawsuit in question and how each party will deal with each other during the suit

What should you look out for? I get the most comfort from a mutual indemnity, where each side agrees to protect the other from a breach of their contract obligations. This gives both sides the incentive to stick to the terms of the contract and avoid issues later on. If neither side is bound by indemnity language, the protection you lose from the other side might be balanced out by the protection you don’t have to offer, but both sides are working without a safety net. The worst case scenario is where the other side wants indemnification from you but won’t offer you the same protection. Unless the terms of the agreement warrant a one sided indemnity, this is a big red flag.

Closing

There is a lot more to indemnification clauses than what I’ve laid out here. Negotiating indemnity, enforcing the clauses in the face of potential suits and dealing with business partners without the ability to fulfill their indemnity obligations are complex issues that comprise the entire practice of some attorneys. An introduction to the idea of indemnification is helpful for creative professionals to understand the contracts they sign, but it can’t replace professional contract analysis.

Best

Gamal

Entertainment Contracts 101: Creator Owned vs. Work for Hire Deals

Added on January 29, 2015 by Gamal Hennessy.

by Gamal Hennessy

In the creative marketplace, one of the first things that an artist needs to learn is the difference between a license agreement and a work for hire agreement. These are fundamentally different animals and signing the wrong one at the wrong time could be devastating to your future.

Definitions

A work for hire (WFH) is an agreement where you offer your creative services to intellectual property that you do not own in exchange for a fee.

A license is an agreement where you give someone else the right to distribute your intellectual property in exchange for various types of payments.

Example

WFH: You are an artist. Marvel Comics hires you to draw an issue of Spider-Man. You do the pencils. They give you money. You walk away. You don’t own Spider-Man. You don’t even own the pages you created. Your name will appear as the artist, but that’s as far as it goes. This is pure mercenary work.

Creator Owned License: You are an artist. You have an idea for a new story. Dark Horse likes it and gives you a CO deal. You create the book. You might even eat the cost of creation. They sell the book. You get a cut, they get a cut. When you walk away, you walk away with the property. You can do whatever you want with it because you own it.

Historical Example

Frank Miller offers one of the best examples of the difference between these two types of deals. In 1986, Miller signed on with DC to release The Dark Knight Returns. That book reanimated the Batman franchise, solidified a darker vision of comics across the board and was instrumental in redefining the genre of super hero movies. But at no point could Miller claim to own Batman. He had no rights to any of the subsequent film, video game or merchandise revenue that came out of the Batman property. To the best of my knowledge, he got a page rate and he got credit for doing the work. That’s it.

Actually, that’s not it. Because he got so much exposure and critical acclaim for the work he did on Batman (as well as other properties) it was much easier for him to land creator owned deals later on. Frank Miller owns most if not all of the Sin City and 300 franchises. He had major input, control and license fees from those books and subsequent films. That was money he was entitled to because he owned the rights to that intellectual property.

Take Away

There are several successful writers and artists who have done work for hire deals first to establish themselves in the industry and then done creator owned deals once they had the right leverage. Many of them jump back and forth from one type of deal to the other depending on the project. Jim Lee, Todd McFarlane and Greg Rucka are all good examples of this. I’m not suggesting that an artist should never sign a WFH. I am suggesting that you need to know the difference between the two and make sure you are not signing a WFH for your own property because then you are signing away all your rights for little or no money.

And keep in mind, just because a contract says Creator Owned Agreement or License Agreement on the top doesn’t make it a creator owned agreement. It is the language in the agreement and the way the rights are divided that is the key to the contract. When you analyze your agreements (or ask me to do it) always keep in mind who has control over the property. This will be vital when your idea becomes a movie.

Best

Gamal

Is the New Marvel Universe a Secret War on Fox Super Hero Films?

Added on January 20, 2015 by Gamal Hennessy.

by Gamal Hennessy

In the comics industry, the death and resurrection of characters is a fairly common occurrence. Marvel killed Wolverine a few months ago and ended Fantastic Four as an ongoing series a couple months later. DC recently killed Robin and we’re now in his rebirth phase. The death of characters is an accepted element of post-industrial mythology and the business of creativity. Every so often, something has to be taken away so it can come back with renewed energy.

Killing a comic character is common, but Marvel is doing something a bit more daring with today’s announcement of Secret Wars (See The Marvel Universe is Ending). In essence, Marvel is dismantling all of its various continuities to create a single overarching narrative. This event appears to be in the same creative vein as other universe destroying events like Crisis on Infinite Earths, Heroes Reborn and the New 52. Rather than shake things up with a reimagined world like the Ultimate Universe I saw launch when I was at Marvel, the stakes are being raised, or at least the goal posts are being moved.

But how much of this is the product of business as opposed to art? There’s already been plenty of speculation about the impact Marvel’s recent creative moves in comics will have on the superhero movie industry. Marvel has poured more creative and marketing energy towards the movie properties it owns (Avengers, Guardians, etc.) and has downplayed, muddled or destroyed properties licensed out to other studios (X-Men, Spider-Man, Punisher). Conspiracy theorists suggest Marvel of using the tail to help wag the dog.

If the comics are the root of the money making movie tree, killing the root might weaken the tree. When any licensed product becomes more trouble than its worth, a movie studio might decide they’re better off giving up the rights. When Marvel reacquired the movie rights to titles like Daredevil and Hulk, the conspiracy theorists saw this as a Marvel’s success. The recent rumors of Spider-Man appearing in the Civil War film also fuels the conspiracy fire. The death of Wolverine and the cancelation of Fantastic Four could be considered a more aggressive move, designed to lower the potential success of the upcoming films, assuming other factors remain constant.

So what will the industry impact be of reconfiguring the entire Marvel mythology? It could be nothing or it may be everything. It all depends on which titles and characters emerge from Secret Wars. If most (or none) of the Fox or Sony characters survive the slaughter, I’d say there was a strong case for the conspiracy theory. But I doubt Marvel will be so blatant. A lot of factors go into the success or failure of a film franchise. Killing off a character in the comics isn’t a magic bullet, Kryptonite or a mystic hammer, but it can provide insight into the mind of the character’s owner.

The insight independent creators should have for their own characters is the same no matter how Secret Wars plays out. You need to treat your characters and stories as business assets. Make your decisions and focus your energy on the properties that work for you. If they don’t, consider shaking things up, even if some of your babies have to die. (See Treat Your Art Like an Investment)

Have fun.
Gamal

You Signed the Contract, But Do You Know What It Says?

Added on January 6, 2015 by Gamal Hennessy.

By Gamal Hennessy

Every writer, artist and musician knows they should read and understand a contract before they sign it. You don’t need to hear the horror stories of rookies and veterans who lost the rights to a lucrative project because they didn’t know what they were signing. The advice is so universal, it often feels insulting to bring it up.

But the reality is many creative people don’t read what they sign. There are a lot of reasons why this happens, including:

Time pressure by the other side (If I waste time reading this, they’re going to give the deal to someone else)
A perceived lack of experience (I won’t understand it so why should I waste time reading it?),
A perceived lack of leverage (I won’t be able to change anything so why should I bother to ask?) (See Negotiating Power in Creative Contracts)
A general faith in the decency of their business partners (Bob is my friend. Bob would never screw me with a bad contract, so why do I need to worry about it?)

In some instances, an unread contract is signed and the world does not end. But information is power, even after the contract is executed. Creative people of all types can benefit from a thoughtful analysis of their existing contracts for three reasons.

Managing expectations: It is normal for an artist who gets a deal to expect to see a revenue stream begin to come in when his work gets released to the market. But the structure, timing and amount of payment can be controlled by different provisions of the agreement. Many contracts limit (or in some cases eliminate) your ability to get paid. If you understand this after the contract is signed, you’ll know when and if to expect some payment and you won’t put yourself in a financial hole waiting for money that might not come. (See Artistic Fantasy vs. Financial Reality)
Managing usage of the property: You may have created your story or song, but you might not have control over it depending on what the contract says. In addition, you might have signed away the underlying elements of the work, giving your business partner control over any sequels, spin offs and other derivative works. If you understand what you do and don’t control, you’ll know if you should focus your efforts on building that particular property or creating something else that you have more control over. (See Treat Your Art Like an Investment)
Understanding the process: Just because you sign one bad contract doesn’t mean you have to agree to the same detrimental terms with every project you do. If you use your bad contract as an educational experience, you can be better prepared to make a more lucrative deal for your next property. But you can’t avoid bad contract language if you don’t know what it is. Sitting down and coming to grips with your current deal will make you a better professional in the long run.

I counsel my clients to understand all their contracts before they are signed, while they still have the ability to accept or reject the deal (See How to Turn Down a Bad Contract) , but there is value in understanding an existing agreement, even if you’re not in a position to change it. The worst thing you can do is make a bad situation worse by sticking your head in the sand. (See Don’t Wait Until It’s Too Late)

Have fun.

Gamal

P.S. On a completely different note, I’d like to share my own creative work with my clients and potential clients. You can get free samples of my Crime and Passion stories by visiting http://nightlifepublishing.nyc

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.

How to Reject a Bad Contract

Added on December 12, 2014 by Gamal Hennessy.

By Gamal Hennessy

An artist can spend years trying to land a deal with a publishing house or studio. They struggle to get exposure and often face waves of rejection before anyone is willing to even acknowledge their work. Unfortunately, this recognition can come at a price.

Many artists don’t read the contracts they sign. The ones who do, especially the ones who come to me for advice on contracts, find out they’ll be losing control of their art, giving up the potential to be paid for it or both (See How Artists Get Their Rights Stolen) Some of my clients sign those deals anyway for a lot of different reasons. Others decide to walk away and try to find a better deal.

Rejecting a bad contract makes good business sense, but there is a right way and a wrong way to turn down a deal. You can maintain your professional reputation and keep the lines of potential communication open if you follow these five steps:

Articulate your intentions: It does you no good to get a contract from a publisher and then never respond to them when you decide you won’t sign it. You are better off notifying the other side that you appreciate their interest in your work, but you can’t move forward with the terms they propose.
Blame your lawyer: In most instances, the person you’re dealing with will ask what the problem is with the contract. This is the perfect time to throw your lawyer under the bus. People hate lawyers more than zombies, Ebola and zombies with Ebola, so hiding behind us can’t make our reputation any worse. It can give both of you a convenient scapegoat so you can walk away from the deal without any negative feelings between you. This is just one more reason it makes sense to get a lawyer. (See Why Artists Need Lawyers)
Offer alternatives: Maybe you can’t sign their deal, but that doesn’t mean you can’t do business with them. They might be open to changing some of the contract language to make you more comfortable. They might even be willing to use a contract you provide instead. (This is rare, especially when one party has much more leverage than the other. See Negotiating Power in Creative Contracts). You might be able to do some freelance work for them that doesn’t put your own property at risk, or you might be able to work out another type of business deal with them. Most of these proposed alternatives won’t pan out, but you’ll never be able to explore the possibilities if you don’t ask the question.
Leave with dignity: Entertainment is a fairly small business. The minor person you deal with today might be the head of Disney tomorrow. The hot new artist this year could find himself without a deal next year. Don’t have a fit, throw a tantrum or make threats just because you don’t want to sign a bad deal. Don’t do it in person. Don’t do it over the phone. Please don’t use email to do it and for the love of everything don’t do it on Twitter. Just don’t do it. Thank them for their time, express your hopes for working with them in the future and walk away.
Go Back to Work: One bad contract isn’t the end of your career, especially if you didn’t sign it. You need to go back to your craft, keep pushing your work into the world and try and find the next deal. If one person was willing to take a chance on you, there could be others. But you can’t find them if you don’t look.

Signing the wrong deal can cost you thousands of dollars and control of your art. Rejecting the wrong deal the wrong way can cost you your reputation in the industry and the opportunity to work with someone else in the future. Stay friendly and professional and you can turn a bad contract into a learning experience. Just remember to blame your lawyer for everything.

Have fun.
Gamal

David v.s. Goliath: Negotiating Power in Creative Contracts

Added on November 10, 2014 by Gamal Hennessy.

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 influence.

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

Success in the comics industry requires an understanding of the business, creative, and legal aspects of the medium.

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Will You Accept Your Assignment?

Added on October 27, 2014 by Gamal Hennessy.

By Gamal Hennessy

Words in the legal world have different meanings than words in the real world. For example, most people define an assignment as a task, duty or responsibility given by one person to another person. In the world of contracts, an assignment is the transfer of contractual rights and obligations from one party to another party. In most contracts, references to assignments are buried deep in the back of the agreement when your eyes are already glazed over and skipping anything that doesn’t look like the signature line. But certain assignment language can turn a good deal into a bad one right before your eyes.

Musical Chairs

Imagine yourself as someone who makes comics. Also imagine yourself working hard to get your name out there at cons and online. You meet a small publisher and the two of you hit it off. He loves your work and offers you a deal. It’s not a great deal because it’s your first self-published project, but you take it anyway. Your book comes out and you’re as proud as a new born parent.

Your publisher treats you like gold. He goes beyond the language in the contract to support and promote your book. He reports sales on time and he even pays you. Your book and the other titles in his catalog start to get a lot of buzz. Hollywood starts knocking on the door. Suddenly, people are talking about TV, video games and even movies. Your publisher gets an offer for the entire company and he takes it. Now instead of being published by a small visionary publishing company, your book is swallowed up by a big vertically integrated conglomerate.

Your new publisher does not treat you like gold. Your contact at the central office has no idea who you are and isn’t interested in finding out. Your book is buried in an avalanche of content. The money stops. Your book becomes inventory for other media, but it is constantly pushed aside for higher profile properties. Your entire relationship with them is defined by the original unfair agreement and you want to take your book elsewhere.

That’s when you read the assignment clause of your contract and realize there’s a problem.

Types and Options

Assignment clauses boil down into two types; mutual and non-mutual.

In mutual assignment, you or your publisher could assign your rights in the contract to someone else at a later date or neither of you can ever assign your rights to anyone.
In a non-mutual type of assignment, only one of you has the right of assignment and the other side is stuck.

Publishers have a vested interest in being able to assign contracts. Their ability to sell their company is based in part on what is in the catalog. A company won’t be worth much if every title can walk out the door after a sale. Because of this and the inherent negotiating imbalance most artists have (See David vs. Goliath) many artists are not in a position to get a non-mutual assignment clause that goes their way. Many of them can’t even get a mutual assignment clause. Quite a few of them are stuck in a bad position.

Your Mission, If You Choose to Accept It…

The rights to catalogs change hands more often than you might think. Aspen Comics recently acquired the rights to Big Dog Ink. A few years back, DC acquired Wildstorm and integrated that entire universe into the New 52. In what is perhaps the largest catalog acquisition in recent memory, Disney bought Marvel and Star Wars. As comic properties become more lucrative (See Making Comics Isn’t Really About Comics Anymore) more publishers will see value in having catalogs they can assign.

Your response to this situation is threefold:

Understand what kind of assignment clause you are dealing with and what options you have to walk away from a new publisher in the event of a sale
Negotiate for the best overall contract you can get upfront
Understand your long term success will be based on the language in your contract as much as, if not more than, your relationship with the publisher.

In some cases, you might want to have the rights to your book assigned to another company. Just understand the process and work to adapt the contracts you sign to the goals you have.

Have fun.

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.