Hollywood and the Comics Creator

HOLLYWOOD & THE COMICS CREATOR

Notes about Option/Purchase Agreements

by Jean-Marc Lofficier

 At one point or another in your career, you may be approached by a producer or a motion picture company interested in purchasing rights to your character(s) and stories -- which they will refer to as "The Property" -- in order to turn it into a film, a television series, etc.

This document is meant to help you cope with that situation.

First, do not attempt to negotiate a contract yourself; use a lawyer, preferably one with Hollywood experience. Remember, however, that this will cost you. Lawyers are not cheap. A comprehensive negotiation of the type outlined in this document may cost you anywhere between $5,000 and $10,000. If you care enough about your property, this is an investment you must make.

On the other hand, never put yourself economically in a situation where you have already spent more money than you can afford to lose; otherwise, you will start thinking that you have no other choice but to accept the deal that is being offered to you. The producers (or their lawyers) will smell this, and use it to their advantage. Always be in a situation where you can walk away from the deal -- and make sure the other party realizes this.

A way to reduce your legal bills is to be prepared beforehand. Every minute you spend on the phone with your lawyer costs you money. So do as much homework and research as you can in advance. This is one of the purposes of this document.

Lawyer or not, be aware that you are ultimately the one making the final decisions. As a creator who owns his or her own creation, you are solely and fully responsible for what you do with it. Only YOU can instruct your lawyer as to what YOU want.

In other words, YOU make the deal. You should know what your creation is worth -- to you. Some characters may be worth more than others. Or your emotional attachment may be different. In the end, you are the only one who can decide.

The purpose of the lawyer is to advise you during the negotiations, to represent you and defend your interests, and to make certain that whatever deal you finally make with the producers (and you will not get 100% of what you want, but then -- hopefully -- neither will they) is correctly reflected in the writing of the agreement.

Making the deal is the most difficult part of the process, because it involves a great number of decisions, about issues that you probably never thought about before. Even though your lawyer can, and will, guide you (each situation is, after all, different), it is, again, better if you familiarize yourself with these issues beforehand so that you can make informed decisions when the time comes.

What I have done here is to prepare a checklist of the various points that will (or should) be raised during the negotiations, and about which you or your lawyer will have to reach a decision. Because comic-books are in some respects a rather peculiar field -- certainly different from novels or scripts -- some of the issues raised here may be unfamiliar to many Hollywood lawyers and agents. This is why I have also tried to provide you with samples of the "language" that you may use in your contract.

This is an agenda, a template for your future deal-making. Good luck!

PRELIMINARIES:

The first thing that will happen is that you will be contacted by a producer who wants to option your "property".

A "producer" may be someone with a few contacts in Hollywood, or a major motion picture company. However, whether big or small, he usually operates like a packager. Meaning that he can sell your property, "make it happen" as they say, but he is unlikely to be the one who is going to pay for it.

The more intermediaries there are between you and the ultimate "client" (usually a major motion picture studio), the worse things will be for you. First, the chances of seeing an actual movie made are smaller. Second, the person or entity with whom you signed a deal may be forced to come back to you and renegotiate, because he let you, or your agent, get away with certain terms that the Studio will not accept. This will start an exhausting and costly (in terms of legal bills) process, which can possibly degenerate into quite an ugly mess if you rightly refuse to budge.

Whenever possible, try to ascertain beforehand that you are dealing with someone reputable, who already has produced movies, and has some clout in Hollywood.

Then, you need to ask yourself: do I need the money? For money is the primary reason for dealing with Hollywood. Do not expect any great creative rewards. Indeed, if the idea of seeing your beloved creation twisted beyond recognition turns your stomach, tell the producer politely that you are not interested.

Dealing with Hollywood can be greatly stressful and the main reason to put yourself through this is to make a great deal of money. There is nothing wrong with this, especially if it provides you with a degree of financial security that will enable you to go back to your studio and work in peace.

If you decide to go ahead and welcome the producer's advances, you -- or, more accurately, your lawyer and/or agent -- will eventually be presented with a "deal memo" or an "option/purchase agreement".

This agreement is not the full-length, more detailed contract that will be written much later, possibly years later, possibly never, when the film (or television series) based upon your creation is about to start production.

However, you must make sure that any condition that is really important to you is included in that initial option/purchase agreement. If it's important to you, and it's not in the option/purchase agreement, the chances are that you won't be able to get it later.

You may have to go to court, the producer will countersue, and it will be a big mess all around; worse, the court will likely interpret your contract, if it is silent on an issue, by Hollywood standards. These are rarely to the advantage of the authors, and you will be screwed.

You should therefore consider checking each and every of the items discussed below, and if some are not included -- which is very likely -- you should instruct your lawyer and/or agent to bring them to the table and discuss them before signing anything.

1. OPTION:

An option is the period of time that you give ("grant") to a producer during which he is the only one -- options in the film business are usually "exclusive" -- who can turn your creation into a film or a television series.

That period of time can range anywhere from 6 months to 18 months. Less than 6 months is unlikely, because it realistically does not give the producer much time to do anything.

More than 18 months is onerous for you, because it takes your property off the market and prevents you from entertaining other offers from other producers, which can be frustrating, especially if you realize later that the producer you are dealing with is clearly unable to get a film made.

In exchange for this period of time, the producer should pay you a certain amount of money. However, most producers hate paying option money, and will try to pay you as little as they can get away with. Some may even want a "free option". Do not accept. Do not get angry. You must understand the reasons why.

As stated before, the producer is often just an intermediary in the process. To make a movie or a TV series, he is going to need time to develop a script, in order to attract a movie star, or a big-name director, or both. Even for a cartoon series, the producer will need time to do development work before he can sell the project to a network or a toy company. And he will need even more time if he is an intermediary several times removed from a Major Studio.

All this development work requires money, and worse, it is done speculatively, meaning that the producer may still fail to sell the project and be left holding the bag. The producer, therefore, has a vested interest in spending as little money as possible until he is certain that he has made a sale.

This means either not paying people, or making their payment conditional upon the success of his venture. No movie, no money. Which is why producers do not like to spend a lot of money on options.

A "free option" might make sense from the producer's perspective, but it really is not to your advantage, because: (1) you need the money (as we've already established); (2) the producer is going to take your property off the market for a number of months and you should rightly be compensated for this; and (3) if the producer actually spends money on you, it will give him with an added incentive to sell your property in order to recover the money he already spent.

By asking for money upfront, you improve the chances of your creation being actually made into a film. A producer who has spent "top dollar" (whatever that means) on your property is going to be more motivated than one who has not.

A reasonable sum for a 12-month option would be 10% of the Purchase Price (see paragraph 2 below). To take less is not to your advantage. If it cannot be avoided, try in exchange for less money to shorten the duration accordingly. The language for such an option is usually fairly straightforward:

Producer will pay Author $ X ( "Initial Option Payment") for an initial 12 months option period, which sum will be applicable against the Purchase Price.

Note that the Option Payment works as an Advance against the Purchase Price that you will negotiate.

In some cases, the producer may want an Extension of the Option. This means that, at the end of the Initial Option Period, even though the producer hasn't yet succeeded in selling the project, he feels that he needs some extra time. An Extension is usually at the producer's initiative, not yours. Naturally, in exchange for it, you will receive additional money. An Extension works as follows:

There will be a single 6 months extension for $ Z, payable on or before the expiration of the Initial Option Period, which shall not be applicable against the Purchase Price.

It is generally not a good idea to give more than one extension. Also, that extension should not exceed the term of the Initial Option. For example, if you have granted an Initial Option of 12 months, as in the above example, you may consider a 6-month Extension. Or a 12-month Extension in the event of an Initial Option of 18 months. And get at least as much money for it.

Note that, unlike the Initial Option Payment, the Extension Payment is not -- or should not be -- an Advance against the Purchase Price.

If you do not feel that you want to grant the producer such an automatic extension of your option, then make sure that there is no such language in your contract.

At the end ("expiration") of the Option Period -- whether extended or not -- if the producer has not paid the Purchase Price ("exercised the option"), make sure that your agreement irrevocably states that all rights to your creation automatically revert to you.

You are then back where you started. Except you will owe your lawyer some money -- but think of all the experience you will have gained!

2. PURCHASE PRICE:

If the producer succeeds in selling the project, he is going to exercise his option to buy the rights to your creation, i.e.: effectively pay you the Purchase Price that you have agreed upon.

This is the "big one". The large amount of money that you're going to get for your brain-child is possibly the only amount of money that you will ever see. So it better be good. The language would read:

$ X ("First Picture Purchase Price"), payable to exercise the option, upon the earlier of expiration of the applicable option period or commencement of principal photography of First Picture.

There is really no rule of thumb on how much money you should get. The film rights to some well-known heroes have been sold for as "little" as $100.000. On the other hand, anything above $1 million is going to be a "hard sell".

This is because the producer must also take into account the money he will need to pay the scriptwriter -- very likely as much or more than he paid you -- and a movie costing $2 million just for property and script is going to require a $30 million budget, and not that many $30 million movies get made.

* Note: The acquisition of the rights by the producer should always be conditional upon the effective payment of the Purchase Price. In other words, the rights should clearly and automatically revert to you if the Purchase Price is not paid, and paid on time. This is particularly useful in the event of bankruptcies.

3. TV SERIES, SEQUELS & REMAKES:

Any intelligent producer is not going to want the rights to make only a single movie from your creation. In the event that that movie (if made) is successful, he's going to want the rights to also make sequels, remakes and spin it off as television series, whether live-action à la M*A*S*H or animated à la Batman, etc.

A. Television:

(1) Movie-Of-The-Weeks and Mini-Series: You usually get $X per hour with a $ cap for a M-O-W.

(2) Network Series: You usually get $X per 30-minute episode, $Y per 60-minute episode and $Z per episode over 60 minutes in length.

(3) Other Series (such as syndicated series): Same as Network series, but with less money.

Talk to your agent about the figures; these can vary greatly.

* Note: If your deal is primarily about a feature film and not a television project, it might be a good idea to insert a clause in your contract to the effect that:

Producer may not produce television motion pictures or series until the First Picture Purchase Price has been paid.

This way, you make sure that the producer does not entice you with the promise to pay $1 million if he makes a film, while all the time planning to make a made-for-TV feature for which he will only pay you $50,000.

B. Sequels & Remakes:

For these, you should ask for a percentage of the First Picture Purchase Price. Ask for 50% for Sequels and one-third to one-half for Remakes, but do not be surprised if you are offered less, e.g.: 25% for Sequels. The language would be as follows:

X% of First Picture Purchase Price for each subsequent feature film, sequel and/or remake ("Subsequent Picture"), payable upon beginning of principal photography of said Subsequent Picture.

* Note: Because it might take years before your producer makes a sequel, you might consider having some language inserted to take inflation into account. For example, if you've sold your rights for $100,000 in 1993, you might want that figure re-valued in 2003. Here is a sample language:

Subsequent Picture Bonuses shall increase commencing on the 10th anniversary of this agreement by an amount equal to the US. Consumer Price Index (or its successor) multiplied times the Subsequent Picture Bonus.

4. PROFIT PARTICIPATIONS:

As a rule, Hollywood profit participations are not worth the paper on which they are printed. The odds are that you will never see a dime from this. Get as high a percentage as you can, but do not let it sway you into making concessions in other areas of your contract.

Since the Art Buchwald lawsuit, everyone today knows that what is more important than the percentage itself is the actual definition of "profits".

The only people who get "gross profit" participation (or a percentage of each ticket sold are the box office), or even "adjusted gross profit", are mega-stars or directors, not authors. "Net profits" means whatever is left after the producers -- or the studio producing the picture -- have deducted all of their expenses, whether actually paid or not, such as items like "interest" and "overhead".

What you can try to obtain is to link the definition of "net profits" in your contract to that of someone with a lot more clout than you have, i.e.: the producer. Here is a sample language:

Net Profit Participation: X % of 100% of net profits for the First Picture; Y % of 100% of the net profits for each Subsequent Picture or television production. "Net profits" shall be defined no less favorably to Author than to any other participant in the net profits, including any definition of net profits contained in Producer's agreement with the distributor of the applicable production.

What percentage should you get? Screenwriters usually get 5% of "net profits" -- or less. Since the producers will not give you, the author of the Original Property, more than the writer, your margin for negotiations here is therefore limited.

Pray for the best, and be prepared to audit. And that costs money too.

5. RIGHTS:

This is possibly the most important part of your contract.

The basic tug-of-war between you and the producer is as follows: the producer wants to have as many rights as possible, for as long as possible, as many products as possible, as wide (geographically-speaking) as possible and for as little money as possible. You, on the other hand, want the exact opposite.

It really is like dividing a pie: anything the producer gets, you lose. Or to use a different analogy: Any piece of land that you do not already occupy, the producer will take over.

Whatever rights you do not grant to the Producer remain yours. (These are called "reserved rights".) This means that you can exploit these rights alone, and all the money that you make from such exploitation is yours to keep. This can be very significant, especially if the producer succeeds in making a movie. Even more so if the movie becomes a hit. Also, keep in mind that you might do a better job at handling certain rights than the producer, especially for anything involving the comic-book market.

Star Wars, Batman, Teenage Mutant Ninja Turtles... Everyone knows that there is a lot of money to be made in merchandising. More recently, Hollywood has become aware of the potentially immense value of electronic publishing rights (CD-Rom and the like), video games, computer games, arcade games, and tomorrow's virtual reality games.

* Note: Many publishers have begun to routinely acquire electronic publishing rights under the cover of their regular (i.e.: print media) publishing contracts. When entering a negotiation with a producer, be careful to check that you have not already and unwittingly sold electronic publishing rights to one of your publishers.

Trying to reserve as many rights as you can is therefore vital: it's future money in your pocket. On the other hand, because there is a lot at stake, expect a fight. A big fight. This may turn very quickly into what is known as a "deal-breaker".

This is a sample of the somewhat all-encompassing, mind-bogglingly large list of rights a producer will routinely try to acquire:

The Rights shall consist of all audio-visual production, distribution and exploitation rights in the Property exclusively throughout the universe for the entire period of copyright (including any extension or renewal terms) and, so far as permitted by applicable law, in perpetuity thereafter, including, without limitation, all motion picture (sound, silent, animated, live action, talking and/or musical), television (including, without limitation, free, basic, cable and/or pay, audio and/or visual, in-transit and closed circuit), tape, videocassette and disc rights, interactive media, and all other means of recordation and presentation, whether now or hereafter known or devised, together with phonograph record, music publishing, soundtrack recording and all other rights respecting the soundtrack of any such audio and/or visual production, any merchandising, commercial tie-ups, documentary and other customary allied rights, including remakes, sequels and other derivative such productions, subject only to the Reserved Rights set forth below.

Rather than challenge this list product by product -- for example, by removing "interactive media" -- it may be more effective, from a tactical standpoint, to simply add a modifier to the entire article stating "subject only to the Reserved Rights set forth below." That way, you deal with the problem separately and specifically.

* Note: In the event that you have already licensed your creation for T-shirts or cloisonné pins (e.g.: to Graphitti Designs or Planet Studios), you might consider inserting a clause to "grandfather" your existing licensing arrangements:

Previous Agreements. Notwithstanding anything herein to the contrary, Producer shall be obliged to comply with, or request its licensees to comply with, the following, existing agreements between Author and Third Parties: [ENUMERATE].

6. RESERVED RIGHTS:

You are now going to ask for a new paragraph to be inserted in the agreement to deal with those rights that you wish to reserve. That paragraph begins with:

Notwithstanding anything herein to the contrary, Author hereby expressly reserves the following rights:

Here is a list of some rights you might consider reserving:

(1) The underlying copyrights and trademarks to the Property, its name, title and characters;

This one is fairly obvious. It ensures that, whatever happens, you retain ownership of your creation.

(2) The right to publish and retain all income from comic books, graphic novels, photo novels and illustrated books consisting almost entirely of stills with balloons or accompanying text, including without limitation, electronic publishing rights to said comic books, graphic novels, photo novels and illustrated books.

This article means that you will be the only one having the right to do comic-books (or anything remotely resembling, and therefore competing against, comic-books) of your creation -- including electronic versions, i.e.: CD-Rom, etc., of these comics.

Remember: you are in the comic-book business; the producers are not. If your creation is made into a movie, do you want to see the producer turn around and license the rights to publish comics to another company/artist? The best thing to do is to try to keep the producers completely out of the comic-book field. They won't like it, but if they want your property badly enough, they may go along with this.

* Note: The only practical way to reserve novelization rights is to write the novel yourself beforehand, and get it published -- even if only by a small press. Again, to reuse the above analogy, you have to physically occupy a piece of land -- or else the producer will take it way from you.

(3) The rights to any and all drawn artwork (whether by Author or by another artist) of the Property. Author shall remain free to license said artwork separately from Producer for merchandising and other commercial tie-ups, including but not limited to, articles of clothing, bedding and textile products, portfolios, posters and prints, jigsaw puzzles, pins, badges, rubber stamps, jewelry and fine art products, tattoos and transfers, coloring books, calendars, agendas, children's books, trading cards, etc. ("Comic-Book Merchandising"). Comic Book Merchandising shall not include, nor is Author authorized to use, any materials created by Producer or its successor or assigns.

This is quite a challenge, and will not likely be accepted by the producer without a major fight. You may not even want to bother with this unless you can make a case that you are already engaged in serious licensing activities.

What this article does is create a separation between the image of your character as it appears in the comics (e.g.: Batman as drawn by Frank Miller or Jim Aparo), and as it appears on screen in the movie (e.g.: Batman as Michael Keaton). The first area is called "comic-book merchandising". The other is called "Picture Merchandising".

This article gives you (not the producer) the right to license the comic-book version of your character -- whether drawn by you or another artist. Since producers are no fools, and they know that such licensing can be profitable, especially because they will argue that it is generated by their movie, they may want a piece of the action. As a compromise, you might consider offering to pay the producer a royalty (e.g.: 10%) of your own licensing revenues after the movie comes out.

* A final note of warning: if your creation becomes a very successful film, with tons of merchandising, some done by the producer, some by you, lawsuits will almost unavoidably arise. There is nothing you can do to prevent it at this stage. With great power comes great responsibility; with great success comes a great number of lawsuits.

(4) The live television and radio rights and live dramatic stage rights.

Many studio contracts routinely reserve these rights to the authors. Some producers may insert some language restricting your full use of these, as follows:

Notwithstanding the foregoing, Author may not exploit such live television, radio or dramatic stage rights or authorize anyone else to sell, license or otherwise dispose of such reserved rights in a country or territory until 5 years after the general release or broadcast in such country of the first motion picture or television program produced based on the Rights or until 7 years after the date of this agreement, whichever period shall expire first.

They may also want to keep a right of first refusal and/or first negotiation. In any event, this is a good place to give up something which doesn't cost you much.

(5) The Rights to spin-off books and future books featuring the Property but not written and drawn by Author ("Spin-Offs") which are specifically excluded from this option. However, Author undertakes and agrees to not offer or sell Rights to any and all Spin-Offs to any other party during the term of this Agreement. Notwithstanding the foregoing, in the event that a First Picture is made and released, Author hereby agrees to sell to Producer the same Rights to the Spin-Offs as those acquired herein for the purpose of production of subsequent Pictures and/or television programs for [CONSIDERATION TO BE NEGOTIATED].

This entire paragraph is the result of the fact that a growing number of comics creators are now hiring other writers and/or artists to do their creations. Moebius on The Airtight Garage; Jim Starlin on Dreadstar; Alan Moore writing Todd McFarlane's Violator, etc.

When a producer buys the rights to your creation, he is including the rights to all future versions of that creation, including those not done by you personally. We have dubbed these "Spin-Offs".

If you do not have a written agreement with your collaborators, you may not have the right to sell the rights to the stories that they have done. And even if you do have an agreement in writing with them, that agreement might state that you have to obtain their consent in advance, or simply pay them a share of the money that you will be receiving from the producer (but how are you going to prorate it?) If your collaborator is British, he could have different rights under British Law. Etc., etc.

This entire area is fraught with problems. Indeed, producers generally used to dealing with one single author, or a monolithic company like Marvel who owns everything, find it difficult to cope with the complexities of the comic-book industry's multi-author system. This will also scare their lawyers, not at first, but when they start to grasp the situation. (Also see "12. Warranties" below.)

To simplify matters, we have used this language to exclude all works not done by the creator of the property; however, it gives the producer the possibility of acquiring the same rights to these works separately -- for example for a television series -- and under the same terms and conditions as those paid for the original property.

6. RIGHTS REVERSION:

Rights reversion is important because it determines how you will be able to get out of your contract in the dreaded eventuality that NOTHING HAPPENS.

(1) First stage: the producer has paid the full Purchase Price to you (you are therefore a rich man, or woman) and owns the rights. Yet, for whatever the reason, NOTHING HAPPENS. How long do you wait until the rights revert to you? Try asking for five years, worded as follows:

First Picture Reversion Rights: All Rights will revert if a motion picture based on the Property does not commence principal photography within 5 years from the date of exercise of the option.

(2) Second stage: a picture has been made; however, it's a bomb. The odds that a sequel will get made are, to put it mildly, extremely unlikely. How long do you wait for the rights to revert to you so that you can try reselling them elsewhere?

If a picture has been made, be prepared. Hollywood's answer is: forever. It's theirs for all eternity. Yet, the film may be theirs, but not necessarily the underlying rights to your original property. We suggest trying the following:

Subsequent Picture Rights Reversion: All Rights with respect to Subsequent Productions revert if no theatrical or television production is completed for a period of 10 consecutive years from the date of the first US release of the most recent theatrical or television production.

A compromise solution is to give the producers the chance to re-option the Property at the end of such period:

In this event, Author shall give notice to Producer that no such production has taken place, and Producer shall pay $X (the "Reversion Extension Payment") within 90 days of delivery of such notice. Payment of such $X shall extend for 12 months a reversion of the Rights for Subsequent Productions.

7. MERCHANDISING:

As we have stated above, merchandising is where the money is, if a movie gets made, and that movie proves successful at the box office.

Remember that you have already reserved the "Comic-Book Merchandising" rights under Paragraph 5 above. We are dealing here with "Picture Merchandising", i.e.: everything else: toys, posters, T-shirts, etc.

Keep in mind that what you will be getting is a percentage of what the producer will be getting. For example, if the producer licenses a T-shirt for a royalty of 10% of wholesale (i.e.: 5% of retail), and you're getting 10% of what the producer gets, you are in reality getting 0.5% of retail! So try to get as high a percentage of the producer's receipts as you can.

Producer shall pay Author X % of all adjusted gross receipts derived by Producer from the sale and exploitation of any merchandising products other than Comic Book Merchandising. "Adjusted gross receipts" shall mean all actual gross receipts as actually received less agents' fees and taxes actually paid.

This should be followed with a standard royalty statements-and-audit clause as you will find in most publishing contracts:

Producer shall prepare and send semi-annual statements commencing one year after exercise of the option in accordance with regular accounting practices, showing the amounts due under this Paragraph. Such statements shall be rendered no later than March 31st and September 30th of each calendar year for the previous half calendar year. Payment of the amount due on the statement shall accompany such statements. Author shall have the right, upon reasonable notice during usual business hours to examine through a certified public accountant the books and records of Producer at the place where the same are regularly maintained only insofar as they relate to any licensing hereunder. Such examination shall be at the cost of Author unless errors are found totaling more than five percent (5%) of amounts paid in which case Producer shall bear such reasonable costs.

* Note: Beware of cross-collateralization. In other words, you want to make sure that the accounting for the merchandising royalties that are due to you is kept separate from the profit participations. You may never see a dime under the latter, but there is no reason you should not receive money from merchandising, whether the picture is showing a profit or not.

Finally, you might want to insert an article here to make sure that you receive sample copies of the various products. (Note the reciprocal obligation; because of reserved rights, you may have to send samples of your own licensed products to the producers.)

Author shall receive four (4) free copies of any videotapes and/or discs, and four (4) samples of any advertising posters of each picture and television production, and two (2) samples each of all merchandising or other products made or licensed hereunder when available to the public. Producer shall similarly receive two (2) copies of each new comic book and two (2) copies of each Comic Book Merchandising item when made available to the public.

8. CREATIVE CONTROL:

As we said at the beginning, if you can't stand the idea of Hollywood messing up your creation, then don't sell them the rights to do it.

That being said, there is a certain amount of "damage control" measures that you can put in place under what is usually called "creative control".

Creative control is a sticky issue. You will never get it for a live-action movie for two reasons: (a) it costs too much to take that kind of risk -- the risk that you could torpedo the entire project because they changed your hero's costume; and (b) colossal egos are at stake and the sooner you realize that, in Hollywood's eyes, it is no longer your character but the director's or the star's, the better off you are.

However, because there are precedents for it, you can -- and should -- try to get creative control for any animated version of your creation. The language would be as follows. Note the underlined limitations at the end:

With respect to animated product, including but not limited to feature films, television series, interactive media and games, Author shall have creative approval over all elements of pre-production, production and post-production. Such creative approval shall include, without limitation, the look and environment for the characters, the script, the "bible," the animation house, the director, writers, music, premises, story boards, voice-over actors, the model sheets for all characters, background and props (including vehicles and weapons), as well as the actual voice-over recording session, editing, and mix/sweetening. Author shall exercise his approval rights within the budget and production schedule, and such rights shall not be used to frustrate the development or production of any animated project.

There is more, such as asking for creative approval of the merchandising, but this is pretty basic, and in any event, it would follow the same template. The time you will be given to make a creative approval decision will be very short -- only one day in television. You must be selective and constructive, and not capricious, in the way you use your creative approval rights.

* Note: In an effort to mollify you, the producer may offer you "consultation rights". These are not worth the paper on which they are printed. They only oblige the producer to ask your opinion, before ignoring it.

9. SERVICES:

Another way through which you can achieve a certain amount of creative input in the adaptation of your creation, without using the creative control language, is to force the producer to hire you.

It is also a way of guaranteeing you additional income, and is particularly useful if the producer hasn't met the price that you wanted for your creation.

This works out better if you are an artist, because you can then be hired as Designer.

If you are a writer, you will discover that, unless you have established Hollywood credits, most producers will fight tooth and nail to prevent you from writing the script. This is not because they don't like or trust you, but because in order to sell the project, they know they'll eventually need to attach the name of an established Hollywood writer on it.

In their mind, hiring you means: (a) paying money for a job that will have to be redone later, and (b) encumbering the project with someone whose credit as first writer on the project will discourage a big-name writer from coming onto it later.

In that case, try to get hired as some kind of creative consultant or associate producer.

Salary ranges can vary, depending on how much clout you have, and how much work you actually do. $1000 to $5000 per week would be a good range; more if you are really famous. The language would be as follows:

Author shall furnish, and Producer shall employ, his services (the "Work") as a Designer (Associate Producer, etc.) on a non-exclusive basis during the production of the Picture. On the condition that Author fully and completely keep and perform all services hereunder, and as full consideration for any and all such services, and for all rights granted and/or agreed to be granted by Author to Producer hereunder, Producer agrees to pay to Author the following sums: $X, representing no less than Y weeks' guaranteed salary at $Z per week.

* Note: All the work that you will be doing for the producer under this agreement will be work-made-for-hire, and rights to it will not revert to you, unless specifically negotiated on a case-by-case basis. For original art, see paragraph 10 below.

Most contracts will also state that the producer can use your name and your likeness to promote the film. They might want to use you as part of their promotional efforts, and therefore you might as well plan to get paid for it. You may also consider asking for first-class travel, etc. Language is as follows:

Author shall be available for promotion and publicity, with two weeks' notice. All first-class travel, accommodation and reasonable per diem expenses in connection with such promotion and publicity shall be paid by Producer.

10. ORIGINAL WORK:

If you are an Artist and do work for the producer as per the above article, you want to make sure that you get to keep all your Original Art. It is also not a bad idea to protect all Original Art pertaining to your creation, including that of the comic-books themselves, to make sure there are no arguments later:

Notwithstanding anything herein to the contrary, all Original Artwork by Author (hereinafter the "Original Artwork"), whether pertaining to the Property and/or generated for any Productions hereunder, shall remain the property of Author; however, Author will make such Original Artwork available for exhibits in connection with the advertising, publicizing and exploiting of any Productions hereunder. Producer undertakes that such Original Artwork, as may be loaned by Author to Producer for such purposes, shall be fully insured for the values assigned to it by Author, and that all insurance proceeds resulting from any losses shall be payable to Author. In the eventuality that no such insurance is contracted, Producer shall be liable for any such losses, up to the full amount of the values assigned by Author.

11. CREDITS:

That one is rarely a problem.

Subject to the limits of any applicable guild agreements, credit on each picture and television production shall be accorded substantially as follows in the main titles on a separate card: "Based on the Comic-Book Created by Author".

This is assuming you are the sole creator of everything that appeared in your comic-book. It can become trickier if different people have created different characters, especially for sequels and subsequent productions.

If you want to make sure that your name is used prominently and not shoved aside, a sample of a reasonable language that good-faith-producers should not object to is:

Producer will use its best efforts to cause the distributors of each picture or television production to accord paid advertising credit in a form to be negotiated in good faith. Author acknowledges that such credit shall be shorter in form than the screen credit and subject to customary exclusions.

You should expect the credit provisions to include the following limitation:

Any casual or inadvertent failure to comply with the provisions of this Paragraph shall not constitute a breach of this Agreement nor entitle Author to any relief at law or in equity. Upon notice from Author, Producer shall prospectively cure any failure to accord credit hereunder.

12. WARRANTIES:

Warranties mean that you are going to have to make a number of statements about your rights and your creation, and they better be true, or else you'll meet with a lot of resistance, starting with the producer's lawyers, and this may bring about the collapse of the entire deal.

Also, one cannot overemphasize the financial risk that you are taking upon yourself by warranting something that may turn out not to be true. If anyone comes out of the woodwork at a later date with a claim, you will be held financially responsible by the producer and you will be dragged in court. You could easily lose your house, your creations and all your assets in the ensuing fight.

So do not take warranties lightly.

In the case of a novel writer, or script writer, warranties are easy because there are only one (maybe two) writers involved; in the case of novels, there is usually only a single publisher, who more often than not does not own any ancillary rights.

Things are not so simple with comic-books. The questions are many:

Do you own your creation alone? Or jointly with a fellow writer? artist?

Do you have a written agreement between the two of you that sets out the terms of your collaboration?

What happens if you're offered $100.000 and not a penny more, which is fine by you (your mom needs an operation) but your fellow co-creator refuses to sign unless he gets $200.000?

What about other writers/artists who may have done work on your creation? What about your colorists? What about your publisher(s)?

Will all those people be willing to sign releases? Especially when they find out you stand to gain a lot of money?

Are any of your collaborators Canadian? English? French? Does this give them different rights under the laws of their own country?

Have you been sued by anyone? Is anyone threatening to sue you now (for plagiarism, for instance)?

Have you used anything in your comics that may be in public domain? Or anything that you may not own -- a character who looks like Groucho Marx, Marilyn Monroe or a thinly-disguised homage to Batman, for example?

Have you ever signed a contract granting any kind of rights at all into your creation to anyone else? Unbeknownst to you, has any of your publisher done anything of the kind?

Has any of your publishers ever gone bankrupt? Do his creditors have any rights to your creation as a result?

If everything is not 100% clear, if there is the least doubt in your mind about any of the above, you are going to have to do some house-cleaning, that is: obtain signed releases from various parties, make photocopies of the relevant contracts, etc.

At the very least, you should disclose potential problems, and specifically exempt them from your warranties, by adding:

except as set forth below: [ITEMIZE].

after the articles for which you have problems.

To help you, here is a list of the standard warranties that you will be expected to make. Review it and ask yourself -- is there anything that would be a problem for me?

a. Sole Proprietor. Author is the sole Owner of all of the Rights therein and has the unrestricted right and power to sell and assign Rights to Producer;

This particularly concerns collaborators and publishers, past and present.

b. Copyright. That the Property is completely protected by copyright in the United States, and no part thereof is in the public domain in the United States; and that the Property is or may be validly protected by copyright throughout the world so far as the laws of other countries provide for such protection;

If you have not filed copyright notices (or even trademarks), this is a good time to do it. Filing a trademark costs about $2,000.

c. Title. That to the best of Author' knowledge and belief the title of the Property may be legally and exclusively used by Producer as the title of any motion picture or television program based upon the Rights;

You should know whether your creation's name is that of an existing movie; if not, there are law offices in Washington, DC., who specialize in doing searches. Marvel could not sell the rights to a movie called The Thing, for example.

d. Originality of Property. That the Property and every part thereof is wholly original and no part thereof was taken from or based upon any other work, or in any way defames, or violates or infringes any copyright or any common law or civil right or right of privacy, or any literary, dramatic or motion picture rights, or any other right, of any person, firm or corporation, and that the exercise of Producer's rights hereunder will not violate or infringe any such right or defame any person, firm or corporation;

No homages to Marilyn Monroe, Groucho Marx, Doc Savage, Batman, etc. No defamation of anyone.

e. No Impairment of Rights. That none of the Rights have heretofore been sold, assigned, licensed or otherwise transferred to any other person, firm or corporation by any instrument or agreement now valid or outstanding, nor have said rights been in any way encumbered, limited or diminished by any act or omission, and that said rights are free and clear of any and all liens or claims whatsoever;

You have not entered into a previous agreement that you have forgotten about.

The last two are pretty straightforward:

f. No Prior Exploitation. That no motion picture or television program based on the Rights have ever been made nor has any play been produced on the legitimate stage based upon the Rights or any part thereof, and no right, license or privilege to do so has heretofore been granted; and

g. No Pending Claims or Litigation. That there are no claims or litigation pending concerning or purporting to affect adversely the Rights.

 

Naturally, there are many more issues, such as Assignment, Arbitration, etc., that your lawyer will bring up, and advise you about. However, the above points are the most pertinent.

A last word of advice. Be polite. Be thorough. Most of all: do not be (or act) desperate. They smell blood like sharks. Draw a line in the sand and be prepared to walk away from the negotiations if they do not meet your basic demands.

 

(c) 1998 Jean-Marc Lofficier. All rights reserved. Reproduction is forbidden without the permission of the author.