Sunday, February 14, 2021

Co-creator Compensation

            A question I often get from someone thinking about making a comic is how should they pay their co-creator. In most cases, it’s the writer asking this question in regards to paying the potential artist on their book. There is no one right answer. Each person’s situation and needs will vary. Unless there is a definite reason for choosing a specific form of compensation, I recommend being flexible. Below, I’m going to discuss the three most common types of payment arrangements that I see.

 1. Work-Made-For-Hire

 If a creator wants to own and control the rights to their book outright, then they will need to have everyone who works on it sign a work-made-for-hire agreement. In these cases, the only compensation being paid is the page rate or page rate equivalent.
            For example, if Writer wants to hire Artist to draw their book, then Writer will pay Artist a set fee and have Artist sign a contract giving up all rights to their work.
            It’s a straightforward arrangement, but it’s not ideal for everyone. Also, if you want to go this route, be prepared to pay more for it. Most artists have different, higher rates for work-made-for-hire projects. (And if you’re an artist and you don’t, then you should.)
 
2. The Percentage Split

Another common arrangement is the percentage split. Each creator receives a set percentage of any profits from the book. Often, this is split 50/50, but I’ve seen different percentages. If the parties are receiving a different percentage, then it’s usually the artist receiving the higher percentage.
Sometimes, the artist will receive a higher percentage until a certain amount is reached, and then the profits will revert to a 50/50 split again. For example, Artist might receive 80% percent of the profits until Artist has received $3,000. After Artist has received $3,000, then Writer and Artist would each receive 50% of the profits going forward.
            There are a lot of different ways to structure this type of deal, but it is still relatively straightforward. For a lot of co-creators, this is the type of deal structure they will consider.
 
3. The Co-Creator Advance
            
The co-creator advance is similar to the percentage split, but with a little twist. In this scenario, one of the creators is paying a fee to the other. However, the deal is structured so that the creator making the payments (often the writer) recoups his money before the co-creators start splitting profits by percentage. 
            For example, Writer agrees to pay Artist $3,000. All profits from the book will be paid to Writer until they have received $3,000. Once Writer has earned back the money paid to Artist from the profits, then Writer and Artist will split all profits going forward 50/50.
            If a writer can afford to do it, this is a nice option that recognizes and respects the effort put into the project by your artist co-creator.
            
There are many different ways a creative team can decide to divvy up compensation. Some of it will be dictated by each party’s personal circumstances. Some of it will be determined by where the money for the project is coming from, e.g., if the publisher is issuing an advance.
The three payment arrangements discussed above are common, and they can be adjusted and modified to fit your specific needs. Consider them as helpful starting points when choosing a compensation structure for your project.    

Monday, January 18, 2021

The Power of No

 

            My comic book lawyer colleague Gamal Hennessy has been writing about leverage on his blog recently. He is using Dave Chappelle’s recent pressuring of Netflix to remove old Chappelle’s Show episodes from its service as an example of how to acquire and exert leverage. His series of posts are worthwhile reading. Leverage is an important concept, and I’d like to expand on Gamal’s thoughts a bit.

            When writing my Comics Startup 101book and blog posts, I briefly discussed leverage. In short, leverage is who holds the most power in a negotiation. If one party has more leverage in a negotiation, then they are more likely to obtain the contractual and financial terms they desire.

            Who holds the most leverage in comic book publishing? Most people will default to saying the publisher holds the most leverage. To some extent, they are correct. A publisher decides what books they will publish, and most comic book creators aspire to have their books printed and distributed by a publisher. Comic book publishing contracts heavily favor the publisher and not the creator. Even so, a creator, even an inexperienced creator, does have one piece of leverage they can always exercise—saying no.

            Creators need to carefully evaluate any deal a publisher offers. By doing so, you might find the publisher’s leverage to be flimsy. Is the publisher paying you an advance? If they are, then that works to the publisher’s advantage. If they are not, then you need to analyze how the deal benefits you. Most comic book publishing deals, particularly from smaller publishers, require the creator to front the costs of creating the book by paying for the art, lettering, coloring, etc. The publisher pays to print and distribute the book, recoups those costs, and then splits the remaining profits with the creators (often 50/50). Other questions to consider: How big is the publisher? Do they have the ability to promote and distribute your book in relevant quantities? Does working with them further your agenda or career? What other rights are you giving up? Creators should evaluate all of these points and decide if the deal makes sense for them.

            In most cases, when presented with a publishing contract, or contract of any kind, the comic book creator’s only leverage is to say no. Most creators are afraid to do so. There is always the fear that another deal might not come along or that this is your only shot. Saying no and losing a deal might seem like a bad idea, but protecting yourself from bad deals or exploitative contracts is important as well. It is challenging to balance these conflicting scenarios.

It’s scary to say no, but it can also be empowering. By saying no to a bad deal, you are valuing yourself and your work. Instead of giving up profits and control over your work, you are keeping it for yourself. More creators should be willing to do so.

Why is saying no important? Publishers need your works. They need new content to stay relevant. If publishers do not continue to print new, interesting works, then it is hard to remain profitable and grow. It is not a secret that far too many publishers offer poor contract terms. Some will negotiate. Some won’t. Most rely on a creator’s fear of not being published to get leverage and tilt the balance of negotiating power to their side. But, if their deal terms are bad, and you and others are willing to reject them, then it is a small step toward obtaining better deals for everyone.

In today’s age of self-publishing and Kickstarter, creators should seriously consider whether agreeing to a contract with a publisher is in their best financial interest. In addition to the above, when you factor in that most publishers want 50% of any media deals you might receive, and will not pay you any additional compensation for these rights, then the deal is even less favorable to you. Saying no is powerful.