What Red Flags Should You Look for in a Comic Book Contract?

By Gamal Hennessy

If you are building a career in comics, you’re going to have to deal with a lot of different types of contracts. They may be work-for-hire agreements (See What Is Work-for-Hire Agreements), collaboration agreements (See What Is a Collaboration Agreement?), licensing deals, shopping deals, merchandise deals, and a lot of other things in between. Every deal is going to be different and the way you approach any specific deal will be based on your leverage, the size of the deal, and several distinctive factors, but if you understand the basics of what a good deal looks like, it will be much easier for you to negotiate the good contracts and reject the bad ones.

I have been a comic book lawyer since 1996 (See What Is Comic Book Law?). I have been an educator and business consultant to comic creators since 2012 (See Bio). Over the past twelve years, I’ve made myself available to answer questions from writers, artists, and publishers about everything from copyright to marketing to licensing to AI. The one important question that comes up over and over again is a variation of “How do I identify good and bad contracts?”

I’ve developed and refined my answer to this question over the past twenty-eight years. Basically, a good contract has a beneficial contractual balance. A bad contract has a detrimental contractual balance.

What Is Contractual Balance?

When I use the term contractual balance, I’m talking about the relative weight between four basic factors in an agreement, relationship, rights, revenue, and responsibilities:

• Relationship is the connection between the people involved in the deal. For example, in a work-for-hire deal, someone is ordering and paying for the work (the client) and someone doing the work and getting paid for it (the talent). Understanding the relationship is important because it establishes the expectations for the rest of the deal.

• Rights define who owns and controls the intellectual property associated with the deal. Copyrights and trademarks are fundamental assets in the comic book industry (See Image and Story), so any legal agreement needs to establish who has those rights, how long they have them, and what they can and can’t do with them. For example, in a t-shirt licensing deal, the side that owns the rights (the licensor) gives the side that wants to sell the t-shirts (the licensee) the right to make and sell the t-shirts under certain conditions.

• Revenue explains what happens to the money generated by the deal. There are many different ways to define and generate revenue in comics (See A Simple Guide to Getting Paid in Comics) and a comic book contract needs to spell out who gets how much, when they can expect to get paid, and how can they confirm they are paid correctly. For example, in a creator-owned deal, there might be both an advance and a royalty paid to the creator if and when the comic book makes a profit.

• Responsibility describes what each side in the relationship is required to do in order to exercise their rights and collect their revenue. In most cases, your responsibility will come in the form of an action (producing art, selling comics, etc.) but it can also include promises you make about the deal (See Double Indemnity: Are You Protected?) For example, in an exclusive licensing agreement (See Your Exclusive Engagement) a licensor promises not to grant the same license to more than one licensee.

How Do You Measure Contractual Balance?

Once you understand the factors that go into contractual balance, identifying a good contract becomes a matter of comparing the rights, revenue, and responsibilities in light of the relationship.

A good option purchase agreement to turn a comic book series into a film could name the comic creator as a producer (a positive relationship) and offer an above-market purchase price and back-end participation (a positive revenue stream) in exchange for the exclusive rights to the IP (a negative rights position) and delivery of the existing comic (a positive responsibility requirement).

Alternatively, a bad creator-owned deal might list the comic creator as the owner of the IP (a positive relationship), but offers you no money up-front and questionable royalties (a negative revenue result), forces you to give up all control of the IP (a negative rights position) and forces you to pay for producing the final pages (a negative responsibility position).

It is important to understand that almost no contract will give you 100% of everything in a deal. Each side has to give up something, even if that something is minimal. You also need to keep in mind that every paragraph in a contract can shift and adjust contractual balance from one side to another and the equilibrium between the factors can ebb and flow depending on time, profit, and other factors. Understanding contractual balance can help you distinguish good deals from bad ones, but it’s not a substitute for experienced contract analysis from a professional who understands how the industry works.

Have fun with your comic.

Gamal

If you enjoyed this post, consider joining Comics Connection. Comics Connection gives creators a community to elevate their comic book careers. We offer access to business and creative resources you can’t find anywhere else. For a limited time, the first month of membership is free.

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 FOR A FREE CONSULTATION.

What is the Legal Basis for Freelance Employment in Comics?

This is a modified excerpt from a book I’m working on called The Business of Freelance Comic Book Publishing. It attempts to define the underlying legal concepts for freelance professionals working in comics. While this can’t be taken as legal advice, it can help you understand your rights, revenue, and responsibilities when it comes to working in the industry.

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Intellectual property (or IP as it is often referred to) as “intangible creations of the human intellect” The components of comics (copyrights and trademarks) and the comics themselves constitute intellectual property, so working as a freelancer creates a legal situation that is different from driving an Uber.

In most situations, whoever creates IP owns the rights to that creation. The work-for-hire doctrine is an exception to that rule: “If a work is made for hire, an employer is considered the author even if an employee created the work. The employer can be a firm, an organization, or an individual and if the work is “prepared within the scope of their employment or a work is specially ordered or commissioned for use as a contribution to a collective work” then it can be considered work-for-hire.

It is important to note that as a freelancer, you have the legal ability to transfer some or all of the rights to your creations, but in many cases, comic book publishers will demand a total transfer of IP rights.

A transfer of IP rights must be in writing, often in a formal contract. If there is no contract granting a license or transferring IP rights to the publisher, then you may own or share ownership with that publisher, which can create some interesting scenarios if the comic becomes a film or a Netflix series one day.

Have fun with your comic.

Gamal

If you’d like to learn more about freelance comic book publishing, subscribe to the Comics Connection newsletter for blog updates and information about the upcoming Kickstarter campaign.

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

What are the Best Books to Give to the Comic Book Creator in Your Life?

If you’re trying to figure out the right gift for the comic creator in your life (even if that creator is you), please allow me to offer the following suggestions.

I referred to all of these titles in my book, The Business of Independent Comic Book Publishing, but each one deserves to be read on their own.  

Art:

Images are a fundamental aspect of the medium, so artist on every level can benefit from these classic guides:

• The Complete Guide to Self-Publishing Comics by Comfort Love and Adam Withers

• Creating Comics from Start to Finish by Buddy Scalera and Chris Eliopoulos

• The DC Guide to Creating Comics

• How to Draw Comics the Marvel Way by Stan Lee and John Buscema

• The Insider’s Guide to Creating Comics and Graphic Novels by Andy Schmidt

• Making Comics by Scott McCloud

I also want to give a special mention to the Strip Panel Naked YouTube Channel and their monthly magazine Panel X Panel.

Comic Book Industry History and Trends

If you don’t know where the industry has been, what’s happening now, or where it’s going it will be harder to succeed.

• Comic-Con and the Business of Pop Culture by Rob Salkowitz

• Demanding Respect by David Lopes

• Pros and Comic Cons by Hope Nicolson

Contract Negotiation

Contracts are fundamental to comics, whether you’re doing your own book or working for someone else.

• Getting Past No by William Ury

• Getting to Yes by William Ury

• The 48 Laws of Power by Robert Greene

Crowdfunding

Kickstarter is generating millions of dollars per year for comics, but only if you do it right

• Crowdstart by Ariel Hyatt

Distribution

Your books have to find their way into the hands of your readers somehow. 

• Comic Shop by Dan Gearino

• How to Self-Publish Comics by Josh Blaylock

• Your First 1,000 Copies by Tim Grahl

Economics

The comic book industry is a business. Understanding the numbers will give you a better understanding of the business.

• The Economics of Digital Comic Book Publishing by Tim Allen

• The Long Tail by Chris Anderson

Law

Several different aspects of law impact every comic, but these books focus on the most important element; intellectual property,

• Comic Book Start-Up 101 by Dirk Vanover

• The Pocket Guide for Comic Creators by Thomas Crowell

• The Law for Comic Book Creators by Joe Sergi

Marketing

Finding the right people to read your comic can be the difference between financial success and frustrating failure. 

• Book Yourself Solid by Michael Port

• Comic Book Marketing 101 by Mat Nastos

• Is $.99 the New Free? Steve Scott

• Laws of Human Nature by Robert Greene

• The Art of Seduction by Robert Greene

• This is Marketing by Seth Godin

Project Management

Publishing a comic involves a lot of moving parts. Making all those pieces fit together takes more skill than luck.

• Unnatural Talent by Jason Brubaker

• Write or Wrong by Dirk Manning

• Write, Publish, Repeat by Sean Platt

Writing

Comics are a narrative art form, so the story might be the most important element. While there are good books on the specific discipline of comic writing, there are also lessons to be learned from both outside the industry, including:

• Dialogue by Robert McKee

• Elements of Fiction Writing: Conflict and Suspense by James Scott Bell

• Making a Scene by Jordan Rosenfeld

• On Writing by Stephen King

• Story by Robert McKee

• Twenty Master Plots and How to Build Them by Ronald Tobais

• Words for Pictures by Brian Michael Bendis

• World-Building by Stephen Gillett and Ben Bova

• Writing for Comics by Alan Moore and Jacen Burrows

• Writing for Emotional Impact by Karl Ignlesias

• Writing Subtext: What Lies Beneath by Linda Seger

So which are your favorites? Are there any books I left out? Share your opinion in the comment and help grow the comic creator library.

Have fun with your comic.

Gamal

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

How Can You Learn the Business of Independent Comic Book Publishing?

This is a modified introduction to the book I plan to release this summer called The Business of Independent Comic Book Publishing. It attempts to explain the problem in the comics industry I’m trying to solve, provides an overview of the contents of the book and, what it can and can’t do for you. 

If you have specific questions about this project, please feel free to let me know. 

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The business of comics is chaotic, complex, and on a certain level, crazy. Few other industries transform fantasies and nightmares into potentially profitable products. 

So having a career in comics isn’t like becoming a doctor or a lawyer. There is no license you can obtain or a standard path for you to take to superstardom. Everyone who works in comics has a unique story on how they got to their position. Everyone in the industry used some combination of talent, perseverance, connections, and luck in order to succeed. 

Some people find their way into comics through other forms of professional illustration or visual art. Some began their careers in theater. Some have been found through art portfolio reviews at conventions or through a formal story submission process.

There have been people who learned their craft in staff jobs at established publishers and some who broke into the business working at retail stores. There is no one door that you can open to get into comics. Everyone has to find their own key. 

But if there is one common thread I’ve heard from successful creators, established publishers, and industry watchers, it can be summed up by a statement Matt Hawkins, President of Top Cow: 

 “You need to self-publish and get work out into the public. Many good creators never get anywhere. You have to be good, but you also have to be persistent and lucky” 

The problem is that there are very few ways for an aspiring creator to learn the business and legal aspects of publishing comics. There are dozens of amazing books on the artistic craft of writing and drawing comics, but the nuts and bolts of the industry hasn't been explored in depth… until now. 

The Business of Independent Comic Book Publishing (ICP for short), is designed to help you understand both the comic book publishing industry in general and the needs of your comic book in particular. While ICP can’t guarantee your story will be good, it can facilitate your persistence and help you capitalize on your luck. It can’t teach you how to create comics, but it can teach you how to become an independent comic book publisher.  

How is the Book Structured?

I'm an attorney. A big part of that job is asking and answering questions (See What is Comic Book Law?), so I’m going to stick with what I know. In each chapter of the book, I’ll pose basic and important questions about various aspects of independent publishing. Then, I’ll attempt to provide information and ideas you can use to create your specific publishing program in order to help you get books out the door. 

The book is broken down into twelve sections: 

1. The Foundation: Understanding your overall goals for making comics

2. Intellectual Property Management: Turning your ideas into legal assets

3. Investment: Finding the funds to pay for your book before it is published

4. Business Management: Securing legal and financial protection for your idea and investment

5. Talent Management: Finding the best team possible for your book

6. Marketing: Finding the right readers for your book

7. Distribution: Finding the best way to get your book to your readers

8. Production: Making the best comic you can on time and under budget. 

9. Advertising: Informing your readers about your book

10. Sales: Generating revenue from your intellectual property

11. Revenue: Managing the money your book makes

12. Growth: Deciding how to use your book to create a life in comics

But ICP is not all questions and answers. Publishing comics is not a one size fits all process, so the book tries to explain the different options you have at each stage of your story’s development, as well as the positive and negative aspects of each choice so you can decide what is best for your unique situation. 

ICP also includes ideas, theories, aspirations, and possible outcomes in a multiverse of futures for you and the industry. You can use this book not just as a guide to what is, but also what might be possible. After all, comics are about exploring your imagination.

How Should I Read ICP?

ICP is one part instruction manual, one part reference guide, and one part inspirational program. I’ve combined practice and theory to create something you can use from the moment you decide to publish comics to the point your business is running like a well-oiled machine. Because of the range of topics it covers, this is a book that needs to be read, consulted and questioned. 

I wrote ICP under the presumption that the reader has no business or legal background, so MBA’s or a hedge fund investors reading it to understand the comic book industry will have to forgive the time I take explaining the fundamentals.

You might not agree with the ideas and concepts in this book and I'm not trying to claim any authority as the absolute truth when it comes to publishing independent comics. As long as you understand the options I offer in this book and why you might reject them for your own projects, ICP can still be helpful to you.

What Can This Book Do for Me? 

A book on independent comic publishing isn’t necessarily a book you’re going to read for fun (although I hope you’ll at least find it interesting). If you read this book and follow its process to a reasonable degree, here’s what you’ll get for your purchase price and time spent reading:

• Intellectual property (in terms of characters and stories) that you own

• A business plan for publishing comics

• Experience in the comics publishing industry

• Contacts within the industry

• A market for your ideas

• A process you can replicate with other books

• A finished product

• A little cash left over...maybe.

What Can’t This Book Do for Me?

This book is not the Infinity Gauntlet. It can’t do everything for your independent comic. As a general concept, this book does not guarantee:

• That your book will be profitable

• That your book will be popular

• That your book will be successful (depending on your definition of success)

• That the things you read in this book will be applicable outside the United States. 

Specifically, while I cover a lot of legal concepts in this book, this isn’t legal advice. If you have particular questions about your situation or a project you’re working on, you need to contact a legal professional. 

Finally, this book shouldn’t stifle your creative impulses. There is no contradiction between being creative and understanding the business of creativity. Some comic creators feel that they need to avoid business and legal issues to focus on their art. Others feel that treating comics as a business will suck the fun out of comics. But in reality, it is the creators who have the opportunity to turn their publishing into a viable full-time business that can have just as much fun as the part-time publisher. In fact, gaining a grasp of the business of comics can remove doubt and frustration from the process and make the experience of comics more enjoyable in the long run.

If you want to publish comics and possibly create the next generation of modern mythology, you need to learn the business as well as the art.

ICP is scheduled for release in the summer of 2020. If you’d like to keep up on developments, pre-orders or other news in the comic book industry, feel free to join my mailing list or Facebook group.

Have fun with your comic

Gamal

Should You Download a Random Contract for Your Comic?

This is a modified excerpt from a book I’m working on called The Business of Independent Comic Book Publishing. It attempts to address the issue of creating contracts for your business without being self-serving. While this can’t be taken as legal advice, as contract attorney and a comic book lawyer, I need to offer three particular warnings against taking the law into your own hands when it comes to your contracts.

• First, unless you’re a lawyer with experience in contracts, you probably don’t know the laws governing legal agreements. While contracts are often supposed to make a deal clear, the underlying legal principles can be confusing.  Without training and experience in contract law, your attempts to write your own contract can hurt you more than it can help.

• Second, you might not understand the meaning or the implications of the words in the contract. The language used in contracts is often circular, opaque and dense with words that no one uses anywhere else but in contracts. To complicate the issue, what normal words mean in a specific contract and what you think they mean are often two different things.  Without someone there to explain things to you, it is easy to sign something that will hurt you down the line.

This is not an attack on your intelligence. This is a question of training and experience. I’m a writer as well as an attorney, but I don't edit my books or design the covers. I hire professionals to do that. When I get on an airplane, I don't fly my own plane. I pay the airline to supply professionals. I could learn editing, cover design and piloting, but it saves time and money to bring in a professional.

If you don’t hire a lawyer and write the contract yourself, you might save a few hundred dollars up front, but if you miss something and you lose the rights to your property, you could be looking at a multi-million dollar loss down the road.

If you hire a lawyer before a deal is signed, it will cost you some of your investment. If you hire one after something goes wrong and you need to go to court, that price can rise exponentially. Court cases can take years and those billable hours pile up fast. For the long term success of your publishing, it is better to hire a professional early and avoid issues before they happen.

Finally, if you try to create your own contract, you might not know what kind of contract you need. Different contracts exist for different deals and scenarios of comic book publishing. If you use the wrong contract for your deals, you can place yourself in a poor position. For example:

• If you’re working with other creators on a book, you’ll need an artist collaboration agreement for each creator who will own a piece of the underlying intellectual property.

• If you’re hiring other freelance artists to work on your project, or if you’re working without credit on someone else’s material, you need a work-for-hire agreement.

• If you hire an accountant, lawyer, or editor, you’ll need a professional services contract with each one of them.

• If you use someone else’s intellectual property you’ll need a license agreement.

Comic creators can find almost anything for free on the internet, including contracts. But if you use the wrong contracts for your comic, the small amount you save now could cost you a lot more down the road.

Have fun with your comic.

Gamal

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

Comic Book Attorney and Author Gamal Hennessy to Speak At Four Upcoming Industry Events

(Press Release) New York, NY July 2nd, 2019 - Creative Contract Consulting announced four upcoming comic book panels and speaking engagements for attorney and author Gamal Hennessy. The educational panels and seminars will be followed by the publication of his new book in 2020.

The first two of the panel discussions are designed to help attorneys represent comic book professionals.

●       On July 11th, he will participate in the Comic Book 101 webinar organized by the American Bar Association and Vanover Legal LLC.

●       On October 3rd, he joins Thomas Crowell at New York Comic Con for The Law and Practice of Representing Comic Book Creators.

The final two panels will focus on educating comic book creators on the business and legal aspects of their industry.

●       On October 25th, Mr. Hennessy moderates a panel on webcomics during the Diversity Comic Con at the Fashion Institute of Technology.

●       On October 30th, he will conduct a seminar on the business of the independent comics in partnership with Comic Arts Workshop.

Mr. Hennessy’s participation in these events occurred because of anticipation for his upcoming book The Business of Independent Comic Book Publishing. The book is the result of five years of research and twenty years of experience in the comic book industry, and it comes at a pivotal point for the business as a whole.

“Comic book properties are some of the most popular and profitable forms of entertainment now, so the need for artists and writers to understand the business of comics couldn’t be greater.” Mr. Hennessy said.

“Attorneys can also benefit from an understanding of the business of comic publishing, in addition to their current potential in other media. Comic book law has its foundations in entertainment, publishing, and intellectual property law, but it is a unique industry that requires a unique perspective.”

About Creative Contract Consulting

Creative Contract Consulting (C3) is a boutique law practice specializing in comic book law and entertainment licensing. Gamal Hennessy has twenty years of legal experience in the industry, working for major clients including Amazon Publishing and Marvel Comics, as well as independent publishers like AfterShock and Mad Cave Studios.

For additional information or to schedule an interview, contact Gamal Hennessy at 917-370-7514 or by email on the C3 website.

A Simple Guide to Rejecting a Bad Artist Agreement

By Gamal Hennessy

This is a modified excerpt from a book I’m working on called Independent Comic Book Publishing. It’s designed to walk you through the basics of rejecting a contract. The post is geared towards comic book creators, but the information is also applicable to independent entertainers and small business owners of all types.  While this can’t be used as legal advice, I hope you’ll find it helpful.

Getting a contract signed for your independent comic book can be a complex process.

• First, you need to understand what a contract is and what elements go into an agreement (See A Simple Guide to Understanding Creative Contracts).

• Then, you have to figure out if the particular deal you’re working on requires an artist collaboration agreement (See A Simple Guide to Artist Collaboration Agreements), or a work for hire agreement (See A Simple Guide to Work for Hire Agreements).

• Finally, you have to agree on the terms of the specific contract with each creator (See A Simple Guide to Contract Negotiation).

Even if you do everything professionally and negotiate in good faith, you may fail to reach an agreement with your potential business partner. As Jean-Luc Picard once said on Star Trek “It is possible to commit no mistakes and still lose. That is not weakness. That is life.” If and when this occurs, you need to make a graceful exit. This post offers some tips on how to walk away with your reputation and your dignity intact.

Rejecting a bad contract makes good business sense, especially if your options are better than the deal on the table and there is no room or interest in further negotiations (See A Simple Guide to Contract Negotiation). But there is a right way and a wrong way to turn down a deal. Both sides can maintain their professional relationship and keep the lines of potential communication open if you follow these five steps:

1. Articulate your intentions: It does you no good to start working on a deal and then never respond to them if you decide you can’t sign it. You are better off notifying the other side that you appreciate their interest, but you can’t move forward with the terms they propose.

2. 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, spam, and zombie spam, 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.

3. Try one last attempt at negotiations: Maybe you can’t sign the current deal, but that doesn’t mean you can’t do business with them. They might be open to a different type of deal or alternative terms to the same deal. (See A Simple Guide to Contract Negotiation). Many 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.

4. Leave with dignity: Comics is a small business. The minor person you deal with today might be the head of Marvel 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 email 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.

5. Go Back to Work: One failed deal 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 with your comic.

Gamal

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.

If you enjoyed this post, consider joining Comics Connection. Comics Connection gives creators a community to elevate their comic book careers. We offer access to business and creative resources you can’t find anywhere else. For a limited time, the first month of membership is free.

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

A Simple Guide to Creative Contract Negotiation

By Gamal Hennessy

This is a modified excerpt from a book I’m working on called Independent Comic Book Publishing. It’s designed to walk you through the basics of contract negotiation. The post is geared towards comic book creators, but the information is also applicable to independent entertainers and small business owners of all types.  While this can’t be used as legal advice, I hope you’ll find it helpful.

Getting a contract signed for your independent comic book can be a complex process. First, you need to understand what a contract is and what elements go into an agreement (See A Simple Guide to Understanding Creative Contracts). Then, you have to figure out if the particular deal you’re working on requires an artist collaboration agreement (See A Simple Guide to Artist Collaboration Agreements), or a work for hire agreement (See A Simple Guide to Work for Hire Agreements). Finally, you have to agree on the terms of the specific agreement with each creator.

Achieving this consensus isn’t always easy. Both sides could have competing interests, agendas and levels of leverage. This post offers some guidance on how to negotiate a contract that everyone is happy with, instead of one that someone (or no one) is excited about signing.

How Do You Reach an Agreement Everyone Is Happy With?

Creating a mutually beneficial contract requires balancing relationships and interests. Because you’re going to be working with the other person for weeks or months, you don’t want that interaction tainted by negative feelings related to the contract. At the same time, you might not be able to give the other side everything they want for the sake of the working relationship.

What you can offer any potential business or creative talent will be based on:

1.    Your goals

2.    Your budget

3.    Your timetable

4.    Your level of interest in the skills and abilities of the individual.

The offer your potential talent wants to accept is based on:

1.    Their professional goals

2.    Their financial needs

3.    Their available time

4.    Their level of interest in your project and you as a publisher.

Because your interests are different and in some cases in direct opposition to each other, there is a tendency for each side to try and negotiate a compromise between the two positions. This is known as positional bargaining. The problem with positional bargaining is that neither side really gets what they want. Depending on the negotiating power of one side over the other, someone might feel they are signing a contract out of duress or with a certain amount of resentment. This isn’t the best way to start a creative relationship.

Fortunately, there is an alternative to positional bargaining. Roger Fisher, William Ury and other members of the Harvard Negotiation Project developed an alternative negotiation theory known as interest based negotiation in their bestselling books Getting Past No and Getting to Yes. While it is not a perfect solution to the negotiation process, it does strive to create solutions both sides want, instead of forced concessions.

How Does Interest Negotiation Work?

Ironically, understanding when it is time to walk away can help bring parties together. One of the primary concepts of interest negotiation is the Best Alternative to a Negotiated Settlement (BATNA), or what I like to refer to as options. A BATNA is “the most advantageous course of action someone can take if the contract negotiations fail”. For example, if a publisher wanted to hire you as an artist for their comic and your demands were more than they were willing to agree to, their option would be to hire someone else.

Most options are not that straight forward. In many instances, options have to be developed. Some negotiators begin by compiling a list of alternatives to the current proposal. At this stage, no alternative is rejected. This is a creative exercise to explore all possibilities to figure out what you actually want to accomplish with this deal. The most promising opportunities are then singled out and improved upon if possible until the best option to a contract is found. In our example, the publisher might have a list of other artists, or they could learn to do the work themselves, or they could create a novel instead of a comic, or they could try to sell the idea to another publisher. In the best case scenario, you have several different alternatives to achieve your interests.

The next step in the process involves trying to understand the other side’s options in specific detail so you can identify their interests. As an artist, you might want a combination of money, ownership, creative freedom, credit or other factors that are important to you.

When the time comes for all sides to negotiate the terms of a contract, the underlying interests of both sides are used to reach a consensus. Each side understands the interests of the other side and expresses their interests with the goal of seeking a flexible solution. If the goal of the publisher is to keep costs down and the goal of the artist is money, then a possible solution is for the artist to handle the art, inks, lettering and colors at a reduced page rate than the publisher would have to pay for four different people.  

What Are Interest Negotiation Techniques?

While every negotiation scenario is different, there are some basic principles that apply from the perspective of writing the contract.

1.    Look for a favorable agreement on all sides, not just an acceptable one.

2.    Create language in the contract on an ongoing basis to record areas of agreement

3.    Move towards commitments gradually on both sides

4.    Offer tentative commitments until you see the total package

5.    Be rigid in your pursuit of your interests, but flexible in terms of solutions

6.    Do not allow a “bottom line” to blind you from creative solutions.

7.    Consider being generous near the end but stick to your interests

How Does Leverage Impact Interest Negotiation?

Different sides have different levels of power and control in contract negotiations. Leverage is defined as the power one side has over the other side in the pursuit of their interests. Depending on the disparity between the parties, the leverage one side has over the other can undermine the interest negotiation process. For example, if the publisher in our example was Marvel or DC and you were an aspiring artist looking for their first major gig, their options would outweigh your options so much that you might sign whatever deal they put in front of you (See my post on Negotiating Power in Creative Contracts).

The concept of leverage might not strike you as fair, but as attorney and author David Tollen states in his book The Tech Contracts Handbook, “If you focus on what is fair, you might walk away from deals that make economic sense.  But that is a poor choice if you can’t get better terms from anyone else, and if accepting the terms would be more profitable than dropping the project.” It makes more sense to focus on the best option available, rather than fairness.

Keep in mind that leverage can be abused to the detriment of the more powerful side. The comic book industry is small. Reputations, good and bad, travel quickly. Power and influence are relative. Positions shift all the time. Keep the following ideas in mind, especially if you have the leverage:

1.    Don’t damage the relationship

2.    Don’t damage your reputation

3.    Don’t overstate your value.

4.    Don’t agree to things that won’t work for either side.

Drafting, negotiating, and signing the contracts for your creative project might take some time and cost you some money, but if you sign the right contracts up front, you'll save money in the long-term and put both you and your book in a better position to succeed.

If you have had contract negotiation issues in the past, feel free to share them in the comments below and tell us how you dealt with the problem.

Have fun with your comic.

Gamal

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.

If you enjoyed this post, consider joining Comics Connection. Comics Connection gives creators a community to elevate their comic book careers. We offer access to business and creative resources you can’t find anywhere else. For a limited time, the first month of membership is free.

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

A Simple Guide to Work for Hire Agreements

By Gamal Hennessy

This is a modified excerpt from a book I’m working on called Independent Comic Book Publishing. It’s designed to walk you through the basics of work for hire agreements. The post is geared towards comic book creators, but the information is also applicable to freelance creatives and independent entertainers of all types.  While this can’t be used as legal advice, I hope you’ll find it helpful.

Freelance comic book creators are the lifeblood of the industry. While publishers are celebrated for the intellectual property they own, it’s the work for hire creators developing many of the characters, stories and milestone moments in comics. Creator owned books are rising in prominence, but many of them rely heavily on work for hire talent to turn their dreams into reality. A few independent publishers try to handle all aspects of the business and creative process of comic book publishing, but most do not have the skill or the time to go it alone (See You Need Two Teams to Publish a Comic). But for all their importance to the craft of comics, work for hire agreements don’t get the attention that matches their impact. When comics are made without a detailed work for hire contract, the publisher risks losing ownership of their intellectual property and freelance artists risk losing the revenue they are entitled to.

What Is the Work for Hire Doctrine?

One of the basic concepts in copyright law is the relationship between creation and ownership. In most situations, whoever creates an original work owns that work. The work for hire doctrine is an exception to that rule. “If a work is made for hire, an employer is considered the author even if an employee actually created the work. The employer can be a firm, an organization, or an individual.”

Under copyright law, a work for hire is created if it is “prepared by an employee within the scope of their employment or a work is specially ordered or commissioned for use” in a variety of situations. One of those situations is “as a contribution to a collective work”. Since comics are by definition a collective work, publishers regularly commission work for hire artists using work for hire agreements.

What Is the Benefit of a Work for Hire Agreement?

While there is plenty of hostility against work for hire agreements, there are benefits to both the publisher and the work for hire artist in the context of comic books. For the work for hire artist, there is a short-term financial gain. Many comics do not generate a profit, so artists relying on comic book sales to make a living might not be able to sustain themselves. Even if comic sales across the board were healthy enough for artists to survive, the profits for comics don’t materialize for months, sometimes years after the work is done and the book is published. Under a standard work for hire agreement, the artist is paid up front, regardless of the sales or profits of the published book.

For publishers, there is long-term profit potential. Published books are a source of revenue, but in the modern entertainment landscape, the intellectual property based on comics drives film, merchandise, television and video games (See Positioning Your Book for the Coming Content War). As an extreme example, the comic book industry as a whole generated two billion dollars in 2017. In 2018, Avengers: Infinity War generated a worldwide box office of more than two billion dollars, not counting merchandise or associated advertising.

Of course, even in the current age of comic entertainment, only a select few properties crossover into mainstream media. And almost none of the books that do find their way to various screens and shelves reach the heights of the current MCU, but copyright ownership gives publishers the potential for success. It is an investment with substantial risk that the work for hire artists don’t lose or profit from either way, depending on the agreement.

What is a Work for Hire Agreement?

A work for hire agreement defines the rights and responsibilities between an owner who commissions a work and the artist who creates that work. A work for hire agreement is different from an artist collaboration agreement (where two or more parties share in the ownership of intellectual property See A Simple Guide to the Artist Collaboration Agreement), or a license agreement (where one party gives another party the right to use some aspect of the intellectual property in exchange for payment).

Keep in mind that anyone working on the comic book who will not share in ownership of the intellectual property should sign a work for hire agreement. This includes freelance professionals on the business side of publishing like marketers or web designers who are not directly creating the comic book.

While a work for hire agreement will share some of the same foundation and housekeeping terms found in other comic book contracts (See my post on A Simple Guide to Creative Contracts), there are several basic and business terms unique to this type of agreement.

What are the Main Elements of a Work for Hire Agreement?

A well-drafted work for hire agreement will address the following issues:

1)    The Owner of the Work

2)    The Work for Hire Artist for the Work: Each artist performing work for hire services needs to sign a separate agreement with the Owner.

3)    The Work explains what the Owner wants the Artist to do. This should be described in as much detail as possible, but at a minimum it should include.

a.    The working title

b.    A description of what the final product will be, whether it’s a web comic, single print issue, graphic novel or ongoing series

c.    The Services the Work for Hire Artist is providing.

4)    The Delivery Schedule: of when Artist will deliver the Services.

5)    The Compensation: including page rates, hourly rates, royalties or any combination of the three. Compensation terms should also include:

a.    The timing of payments

b.    Credit in the final product

c.    Ownership of the original artwork (if applicable)

d.    Use of the Services in their professional portfolio

6)    The Advance Recoupment: Any and all payments made to any party before revenue is generated and then deducted from the royalties when revenue is generated. For example, the artist might get a page rate for their work on the book before publication, but that money can get recouped by the Owner when the book goes on sale.

7)    Missed Deadlines: any penalties to the Artist for missing the Delivery Schedule.

8)    The Withdrawal: any penalties if the Artist is unwilling or unable to complete the Work

Drafting, negotiating, and signing the contracts for your creative project might take some time and cost you some money, but if you sign the right contracts up front, you'll save money in the long-term and put both you and your book in a better position to succeed.

If you’re a comic book creator or freelance artist who has had artist collaboration agreement issues in the past, feel free to share them in the comments below and tell us how you dealt with the problem.

Have fun with your comic.

Gamal

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.

If you enjoyed this post, consider joining Comics Connection. Comics Connection gives creators a community to elevate their comic book careers. We offer access to business and creative resources you can’t find anywhere else. For a limited time, the first month of membership is free.

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.

A Simple Guide to the Artist Collaboration Agreement

By Gamal Hennessy

This is a modified excerpt from a book I’m working on called Independent Comic Book Publishing. It’s designed to walk you through the basics of artist collaboration agreements. The post is geared towards independent comic book creators, but the information is also applicable to freelance creatives and independent entertainers of all types.  While this can’t be used as legal advice, I hope you’ll find it helpful.

Many historical comic book contracts were between artists and publishers. A company like Marvel would hire the artist or writer to create stories for their characters on a work for hire basis. Today, the rise of technology and markets to support independent comic book publishing has increased the need for contracts between comic book creators. Unfortunately, I’ve met too many creative teams that decided to make a comic together without a contract.

What many comic book creators don't realize is that this type of contract is just as important as the one between the artists and the publisher. Without a well-defined artist collaboration agreement, an otherwise successful partnership can lead to misunderstandings, conflict and disputes down the road that can be just as costly as any lawsuit with a publisher.

When Do You Need an Artist Collaboration Agreement?

Certain creative endeavors like comics, movies, films and theater are normally created through a collective effort. While there are some comic book creators who do everything on their own, most projects are created by the continuing collaboration between the members of the group. In the same way that a music band combines the talent of each musician to make music, a creative team comes together to make a comic book (even if they only come together in a cloud server that they upload the work to).

You need an artist collaboration agreement when members of the creative team are going to own a piece of the book. 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.  You need a signed artist collaboration agreement with each member of the creative team before you start production on the book.

What is an Artist Collaboration Agreement?

An artist collaboration agreement defines the rights and responsibilities between two or more parties who plan to share in the ownership of the overall intellectual property. An artist collaboration agreement is different from a work-for-hire agreement (where one party pays another party to work on an intellectual property project for money and not ownership), or a license agreement (where one party gives another party the right to use some aspect of the intellectual property in exchange for payment).

While an artist collaboration agreement will share some of the same foundation and housekeeping terms found in other comic book contracts (See my post on A Simple Guide to Creative Contracts), there are several basic and business terms unique to this type of agreement.

What are the Main Elements of an Artist Collaboration Agreement?

A well-drafted artist collaboration agreement will address the following issues:

1)    The Parties describes who is involved in the contract.

2)    The Work explains what the Parties are trying to create. This should be described in as much detail as possible, but at a minimum it should include.

a.    The working title

b.    A description of what the final product will be, whether it’s a web comic, single print issue, graphic novel or ongoing series

c.    The basic elements of the story, including the characters, settings, and other identifiable aspects of the book. If a synopsis and/or character designs of the work are available, they should be included in the contract.

3)    The Copyright: breaks down the copyright ownership among all the members of the creative team as a percentage.

4)    The Trademarks: breaks down the trademark ownership among all the members of the creative team as a percentage.

5)    The Compensation: divides the revenue for all possible uses of the story and characters in the book, including:

a.    Interactive Media

b.    Screenplay Licensing

c.    Premium Cable Licensing

d.    Subscription Television Licensing:

e.    Broadcast Television Licensing

f.     Advertising

g.    Emerging Media Licensing

h.    Novelization or Publishing:

i.      Merchandising

j.      Trademark Licensing (other than merchandise):

k.    Live Performance Licensing

You might notice that the division of compensation goes far beyond the money you might collect for the initial publication of the comic book. But comic book stories and characters can exist and make money in any form of media now. It’s better to negotiate the video game rights for your story up front, even if your book never makes it to Xbox.

6)    The Advance Recoupment: Any and all payments made to any party before revenue is generated and then deducted from the Compensation when revenue is generated. For example, the artist might get a page rate for their work on the book before publication, but that money can get recouped by the rest of the group when the book goes on sale.

7)    The Responsibilities: lists the business, creative, and administrative responsibilities of each party in the development of the work in terms of both daily management and decision making authority. (See my post It Takes Two Teams to Publish a Successful Comic) It is not uncommon for each member of the team to handle multiple responsibilities including:

a.    Business Management (determining budgets, dealing with contracts, etc.)

b.    Human Resources (hiring work for hire artists and professionals)

c.    Creative Production

                                          i.    Editing

                                         ii.    Scripts

                                        iii.    Artwork

                                       iv.    Inking

                                        v.    Lettering

                                       vi.    Coloring

                                      vii.    Design

                                     viii.    Flatting

d.    Marketing (website maintenance, conventions, and direct market, etc.)

e.    Advertising (social media, Diamond ads, etc.)

f.     Distribution (online, printing, shipping)

g.    Sales (account management, accounts receivable)

h.    Finance (accounts payable, taxes)

8)    The Withdrawal: What happens if one or more members of the team is unwilling or unable to complete the Work before it is completed. Allowances have to be made for several aspects of the deal including

a.    Copyright ownership

b.    Trademark ownership

c.    Compensation

d.    Recoupment (if any)

While the artist collaboration contract can be overly complex when dealing with these issues, the best ones are understandable and don’t include a large amount of legal gymnastics. At the same time the elements of an artist collaboration agreement should not conflict with the terms of any agreement with an outside publisher or licensee of the property. Your legal advisor can review both contracts to ensure there is harmony between them.

Drafting, negotiating, and signing the contracts for your creative project might take some time and cost you some money, but if you sign the right contracts up front, you'll save money in the long-term and put both you and your book in a better position to succeed.

If you’re a comic book creator or freelance artist who has had artist collaboration agreement issues in the past, feel free to share them in the comments below and tell us how you dealt with the problem.

Have fun with your comic.

Gamal

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.

If you enjoyed this post, consider joining Comics Connection. Comics Connection gives creators a community to elevate their comic book careers. We offer access to business and creative resources you can’t find anywhere else. For a limited time, the first month of membership is free.

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.