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

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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

Eight Legal Considerations for Comic Book Crowdfunding

Most comic book creators and publishers are aware of the impact crowdfunding has made in the industry over the past few years. Few creators are aware of the legal issues they need to consider when planning a crowdfunding campaign. As a comic book attorney who has represented several crowdfunding creators, I’d like to offer some thoughts on the best practices for comic book crowdfunding.

Crowdfunding as Distribution

Despite the concept that Kickstarter rewards are not guaranteed, many comic creators treat crowdfunding as a contingent distribution method, meaning that the book will be published if the funding goal is achieved. While established publishers use the platform to offset costs and create marketing buzz, emerging and small press publishers are using platforms like Kickstarter to bypass the perceived gatekeepers of traditional publishing to bring their stories directly to their readers.

From a legal standpoint, this means crowdfunding needs to be treated as a variant of the independent comic book publishing process. There are some nuances unique to crowdfunded comics, but I’ve tried to list the major legal considerations below.

Legal Checklist for Comic Crowdfunding

1.      Ownership of the underlying intellectual property. The story, characters, and logo of the crowdfunded comic represent IP (copyrights & trademarks) that will probably be owned by some member or members of the crowdfunding team. Since that IP has the potential to be far more valuable than the initial crowdfunding campaign, whoever plans to claim ownership needs to protect their interests by completing the proper IP registrations, securing the rights to all the work done on the book with contracts, and strive to maintain ownership of the IP after the book is printed.

2.      Investment. Crowdfunding can generate substantial revenue for a comic book project, but there are business and creative upfront costs that someone needs to pay for before the campaign launches. Who pays that money, how they get their money back (recoupment), and what happens to that investment if the campaign fails all need to be understood by the entire crowdfunding team and established in a contract.

3.      Business formation: The creation of a legal structure can provide significant liability protection and tax benefits to anyone publishing comics, including crowdfunding creators. Consider starting a company to manage the financial and intellectual property assets of your campaign.

4.      Project Management. Crowdfunding involves a lot of work on both the business and creative sides. The role of everyone one involved, from managing the social media for the campaign, to producing the comic, to printing and fulfillment should have both their role and their compensation spelled out in a written contract.  

5.      Talent Acquisition: Running a campaign is easier if you don’t do everything yourself, but the responsibility of everyone involved, their relationship to the IP, and what they’re being paid needs to be clear, whether the campaign succeeds or not.  This can range from a collaboration agreement, a work for hire agreement, or a services agreement, but the contracts should be in place before the campaign goes live.

6.      Printing and fulfillment: If the campaign is successful, you’ll need to have a plan in place to deliver the rewards to your backers. Many services have emerged to offer this service if you don’t want to have a packing party, and each one should have its own terms and conditions available for review. It is always best to look these over on your own or with your attorney to ensure you’re getting what you’re paying for.

7.      Post campaign sales: A crowdfunding campaign can provide a great platform for an emerging creator to make a splash with their target market, but the end of the thirty-day campaign doesn’t have to be the end of your distribution efforts. Whether you sell comics on your website, through the direct market, or digital distribution it always pays to review those terms of service to ensure each platform is a good fit for your book.

8.      Revenue distribution: When the money arrives, you need to know where it is supposed to go. Outstanding payments to creatives and vendors need to be made and taxes may need to be paid. After the dust settles, any funds leftover (either from the campaign itself or the ongoing sales) can be distributed to the IP owners, collaborators, or anyone else who is entitled to a bonus for a successful campaign.

These eight steps do not offer a guarantee for a comic book crowdfunding campaign will go well, but they can put a comic creator in a better position to succeed, especially if the book reaches its funding goal.

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

Initial Thoughts on NFTs from a Comic Book Attorney

I’ve had current and potential clients ask me about NFT’s over the past few weeks, and I’ve seen advocates on both sides of the issue present their perspectives. This isn’t meant to be a definitive statement on the technology and its impact on the industry. It certainly does not constitute business or legal advice. In the end, this can only be the beginning of an evolving perspective from someone who works with the legal issues surrounding comic book art, that can hopefully help increase understanding of this fluid topic.

What is an NFT?

The acronym NFT in this case stands for “non-fungible token”. While there is a more complex definition based on the underlying blockchain technology used to power it, the easiest way to think about NFT’s is as a unique digital file. According to The Verge “NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.” On a certain level, NFT’s can be seen as an evolution of the selling of a singular physical art piece, like a commission you buy at a convention in artist’s alley or the single copy of Once Upon a Time in Shaolin that the Wu-Tang Clan sold to pharma-bro back in 2015.

What is the Value of a Digital File?

If an NFT is a digital file, and digital files by their nature can be instantly copied an unlimited number of times, what is the point of paying a lot of money for a digital file? The answer to that question can be traced back to the nature of collection in general and comic book collecting in particular.

Certain people have collected things that interested them from the time we could pick things up. Elite members of almost every civilization have collected works of art as a way to display their power and taste. There is an entire segment of the comic book industry based on the collection of comics and a separate market for original art from those comics.  

For example, in 2014 there was a sale for Superman #1 for 3.2 million dollars. The 2021 value of a similar book is currently listed at 23.6 million dollars. But why? If you don’t care about comics or you don’t like Superman, these numbers might seem ridiculous. What is the inherent, universal value of a Faberge egg, a Basquiat painting, or a rare comic?

There isn’t one. The value is subjective. As long as the seller can find a buyer willing to pay the cost, then the value exists for that transaction. So while paying millions of dollars for a digital file doesn’t make practical sense, it makes just as much sense as any other subjective artistic collectible. The only difference in the case of NFT’s is the difference between the object’s digital and physical existence.

What is the Impact on the Environment?

Like many types of blockchain technology, the NFT process harms the environment in ways that override any economic benefit it provides. While the specific harm to the planet is a matter for debate, it should be taken in the context of the wider environmental impact of the comic book industry for comparison.

Before the pandemic, if one artist in New Jersey wanted to sell one piece of original art at San Diego Comic-Con, she would have to take a car to the airport, get on a plane, take a car to the hotel, consume several meals for several days and then repeat the whole process to get back home and she might not ever sell her art. At the same time, hundreds of potential buyers of that single art piece would have to replicate the process on their own.

How much negative environmental impact does that create? I’m not an environmental expert. This scenario is not an apples-to-apples comparison, since both the buyer and the seller here might get more benefit from the trip than just the sale of one piece of art, but the sale of comic book art, and comic book fandom in general, isn’t inherently environmentally friendly.

What is the Impact on Comics Creators?

While any digital file can be sold as an NFT, not all digital files, or their creators, have the same stakes in the process. In my opinion, colorists, letterers, flatters, editors, and designers don’t have much to gain from NFTs. Writers might also find a hard time finding interest in their scripts or pitches without some extraordinary factors. At the same time, cartoonists and creator-owned comic creators who own their work outright appear to have more flexibility to pursue NFT’s than freelance creators. Artists and publishers have the most to lose or gain from the potential NFT market.

Artists, who have been able to supplement their income with the sale of original art in the past, lost some of that capacity as they moved from generating work in a digital rather than physical medium. Publishers, looking for additional sources of revenue from their intellectual property, see NFT’s as a market that could be bigger than the sales of the actual comics. Battle lines are being drawn based on who has ownership and control over these assets.

Who Owns the Comic NFT?

Ownership and control over NFT’s comes down to the contracts governing the underlying intellectual property and the relative leverage between the artists and publishers for any single comic.  

In a well-designed collaboration agreement or work for hire contract, there should be language concerning the ownership and disposition of original art. These clauses historically dealt with physical art, but they can be modified or interpreted to cover NFT’s.

Here’s an example of an original art clause. As you read it, keep in mind that the Owner is the publisher, the Talent is the artist, the Project is the finished comic, and the Services is the artwork.

The parties agree that Owner shall own all of the Services. Any original physical artwork created under this Agreement shall be owned by Talent. Talent may utilize up to four (4) pages of the Services in their professional portfolio or any marketing, advertising, or other display of the Services after the commercial release of the Project. Talent may not use any aspect of the Project to create additional materials not authorized and approved by Owner.

This paragraph attempts to achieve four goals. First, it designates that the publisher owns the pages produced by the artist. Second, it designates that the physical artwork (if there is any) is owned by the artist. Third, it allows the artist to use a portion of the pages to get more gigs after the comic is released (to avoid spoilers). Finally, it prohibits the artist from making and selling things without the approval of the publisher. The last sentence can be used to effectively prohibit the creation of an NFT, if the NFT is determined to be “additional materials.”

This is an example of an original art clause, but the contents of this clause can vary wildly based on the relative power of the people signing the contract. For example, an artist with enough leverage could have the word “physical” removed from the second sentence, giving her the potential to sell NFTs.

Leverage is defined as the power one side has over the other side in the pursuit of their interests. Companies like DC are using their leverage to shut down creator's attempts to generate revenue from NFTs that include DC characters. On the other end of the spectrum, publishers like AWA are coming out in favor of artists generating revenue from NFT’s. The difference in position could be based on a dissimilar corporate philosophy, or in the disparity in the market share and popularity between the companies characters, or a host of other reasons. In any event, artists who plan on selling NFTs will have to consider which publishers they work with and what they agree to in their contracts before they start selling.

What is the Future of Comic Book NFTs?

As I said in the beginning, this isn’t the last word on this issue. NFT’s, like page rates and other forms of compensation for comic creators, will continue to be a source of contention in the industry. There will continue to be business, legal and social fallout on both sides of the NFT issue depending on their relative position. The technology might become more efficient, more costly, or ultimately replaced by new technology. The market might stabilize or collapse. Publishers and artists could use the potential of NFTs as a negotiation point or as the basis for ongoing litigation. Whatever happens, creators, publishers, and consumers will have to reconcile with the continuing impact of digital technologies on the business of comics based on their goals, beliefs, and position in the industry.

Have fun with your comic

Gamal

If you have questions about the 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

Dave Chappelle’s Advice to Comic Creators: Part 4

This week, I’ve been using Dave Chappelle’s Unforgiven performance to highlight the need for understanding creative contracts. Today, I’d like to close out the discussion by looking at the concept of assignment.

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 newborn 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 a 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 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.

This is what happened to Chappelle. His original deal was with Comedy Central, which is owned by Warner Brothers. But when AT&T bought Warner, Chappelle Show found its way to HBO Max and Netflix. Chappelle (because of other clauses in the contract) didn’t have any say in this decision and he didn’t get any money from the lucrative licensing deal.

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, Pixar, and Star Wars. As comic properties become more lucrative 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 Chappelle’s case, it worked out in the end. Because he has more leverage with Netflix (see my earlier post on leverage) he could get Chappelle Show taken off the streaming service. You might now be as fortunate. Time alters circumstances and relationships. While you can’t see into the future or account for every eventuality, the more you understand about contracts before you sign them, the less you’ll regret the contracts you sign.

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

Dave Chappelle’s Advice to Comic Creators: Part 3

For the past couple of days, I’ve been using 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 losing the right to use your own name.

Lesson 3: Marketing vs. Manipulation

There is a point in Unforgiven where Chappelle rejects the advice of his friends who tell him to just take Chappelle Show and go to another network. In addition to an analogy of running from one slave master to another, Chappelle mentions that even if he wanted to create a new Chappelle Show, he couldn’t call it Chappelle Show because he signed away his right to use his name that way.

The name and image of an artist can have a significant impact on the success of any creative project. The difference between an A-list actor, writer, or artist can mean the difference between a hit and a failure. This is one of the reasons certain artists are mentioned so prominently in a comic, film, or video game.

But you can’t just use anyone’s name to sell something without their permission. Invasion of Privacy is a set of legal concepts that include the use of someone’s name or likeness for commercial gain, intrusion, undue publicity, and false light.

Companies get around this law by asking artists to allow for their name and image to be used to promote whatever project is being contracted. They also normally acquire the right to use the name of the project itself, because it is hard to ask someone to buy something if you can’t mention what it is.

That isn’t a problem. The problem comes in the way the language is written into the contract. Take this example for instance:

“Company shall have the exclusive right to use the name and likeness of The Artist in connection with the advertising, promotion, exploitation, and exhibition of any product based upon the Material under this Agreement, in perpetuity, throughout the universe in any and all media now known or invented in the future.”

If Chappelle signed a contract that included a clause like this, then he gave up the right to use the title Chappelle Show, even though his name is included in the title and even though the places where the show is being marketed now didn’t exist when he signed the contract. Chappelle’s name belongs to him. Chappelle Show belongs to Comedy Central.

The impact of this clause isn’t hard to see when you see it in isolation. When it is buried in a 25-page contract, and you are three months behind on your rent, and someone is holding a check with your name on it for more money than you’ve ever had in your life, it’s not as easy to see into the future. It happened to Chappelle. It happens to comic creators all the time. But it doesn’t have to happen to you.

Tomorrow, I’ll look at the final lesson I found in Unforgiven. 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

Dave Chappelle’s Advice to Comic Creators: Part 2

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

Dave Chappelle’s Advice to Comic Creators Part 1

To the best of my knowledge, Dave Chappelle doesn’t publish comics. He is one of the most celebrated comedians of his generation. He has created legendary stand-up performances, an iconic sketch comedy show, and he’s received some of the highest honors in his artform. If anyone has succeeded as a comic, it is Dave Chappelle.

But he wasn’t always at the top of his industry. At a certain point, he was a struggling comic trying to make it to the next level. Like many comic creators in the same situation, Chappelle got burned by his business partners.

This is the backdrop for the latest stand-up segment he uploaded to YouTube a few days ago. Dave Chappelle doesn’t make comics, but his experience offers four distinct lessons for anyone who wants to have a career in the comic book industry. This week, I’m going to cover those lessons, but I urge you to watch the special and share your thoughts on his experiences.

Lesson 1: Know what you are signing

When I started consulting clients about comic book contracts, I planned to explain the finer details of contract language, so artists and writers could make informed decisions about selling the rights to their work. Now that I've been doing this for fifteen years, I can see that I was wrong.

Some contracts that I've seen are prudent actions by publishers trying to protect their investment. But too many of these agreements are nothing more than a blatant attempt to hijack intellectual property from unsuspecting artists. This is the same issue Chappelle ran into when he signed his deal with Comedy Central.

The Double-Edged Sword

Signing a contract with a publisher can start an artist down the road to professional recognition and lucrative opportunities far beyond comics. It can also strip you of everything you have worked so hard to create. There are a lot of potential pitfalls in creator-owned contracts, including:

• Giving the publisher complete control of the property, not just the actual comics, but the underlying copyrights and trademarks.

• Giving the publisher control of the property in all media ever created, not just in digital and printed comics

• Agreeing to financial terms that are designed to keep you from ever being paid for your work

• Agreeing to give up your rights without being paid for them

• Agreeing to never get back the rights to your property

Of course, not every contract is written this way. Not every publisher is a demon attempting to steal your life's work. But the history of entertainment in general, and comics in particular, is littered with famous stories of iconic characters being given away by their creators for little or no money. But the answer isn't to avoid all contracts all the time. The key is to understand what you are signing and what you are and are not willing to give away.

Reality Check

It is obviously self-serving for me to make dire claims about the dangers of creator-owned contracts. The more you are concerned about this legal problem, the more likely it is you will become my client and pay my fee. It is also clear that many creators feel compelled to sign away their ideas to get their foot into whatever door they have found into the ultra-competitive comic book industry. Both of those concepts are true. I get it. Chappelle is living proof of that.

Here is my response to those facts; if you don't want to use me to review your contract, I respect that. By all means, use someone else with a background in contracts, IP, or entertainment law. Just don't do it yourself. This is not an insult to your intelligence or business savvy. It is the recognition of your specialization. You are an artist or a writer. You probably didn't waste a lot of time in law school learning about contracts (if you did, sorry about the loans). It is unrealistic for you to be expected to understand the implications of contract language. Many of the most successful businessmen have several lawyers explaining things to them when they need to make a major decision. Chappelle needed a good lawyer to steer him away from a bad contract. You should too.

And even if you do find yourself in a position where you “have to” sign a bad deal, do it with your eyes opened. Know what you are getting into, so you don't wake up one day without any claim or credit for what you worked so hard to create.

Tomorrow I’ll talk about the idea of leverage and how it evolved for Chappelle over time. 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

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

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