Yesterday I used Dave Chappelle’s Unforgiven performance to highlight the need for understanding creative contracts. Today, I’d like to take a closer look at the idea of leverage for you and your comics.

Lesson 2: Use and understand your leverage

Leverage in contract negotiation is defined as the power one side has over the other in the pursuit of their interests. Depending on the disparity between the parties, the leverage one side has over the other can define the negotiation process. For example, when Chappelle was a struggling stand-up comic with a wife about to give birth to their first child, he had a lot less leverage than the programming executive at Comedy Central who could give a show to dozens of hungry comics. In the same vein, if Marvel or DC make an offer to an aspiring artist, their leverage might be so high that the artist signs whatever deal put in front of them. Leverage comes from supply and demand. More specifically, control over scarce resources creates leverage.

Scarcity Breeds Power         

Comic book publishers have to take the financial risk of releasing an unknown and unproven book. 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 leverage.

The publishers currently corner the market on supply. They often have more experience with the means of production, direct distribution, and some control secondary monetization (merchandise and media licensing).

The number of comic creators who are in demand for the publisher’s supply is massive compared to the number of publishers. To put this into context, there are about 300 comic book publishers in North America. 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 ten or twenty other creators are 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. This was the same situation Chappelle faced in the beginning of his career, but that isn’t his situation now.

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 work for hire 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 storylines that you are saving for creator-owned work.

• Find a more flexible small press that will offer more reasonable terms for new creators.

• Explore independent 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. That’s one of the reasons why Chappelle said he prefers working with Netflix over Comedy Central. When he was negotiating with Comedy Central, he had no leverage. In his discussions with Netflix, he has the power to pull content off the air with a phone call.

Need to Understand Your Agreements

Whether you choose to accept a one-sided deal, negotiate better terms, 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.

Tomorrow, we’ll look at a more nuanced element of Chapelle’s lesson. Until then…

Have fun with your comic.

If you have questions about the business or legal aspects of your comic book publishing and you'd like a free consultation, please contact me and we can set something up that fits in with your schedule.

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE AN ISSUE WITH YOUR COMIC PROPERTY, DISCUSS IT WITH A QUALIFIED CONTRACT ATTORNEY OR CONTACT C3 FOR A FREE CONSULTATION