An artist has her first show in a New York gallery, an author is commissioned to create a photography book, a set designer has been asked to work on her first play; after the initial excitement ends, they realize with mounting trepidation, that they must enter into contract negotiations and have no idea what to do. The artists are entering into agreements that include terms and concepts they do not understand, while the other side are experienced negotiators. To borrow from Sun Tzu’s Art of War, “It is only one who is thoroughly acquainted with the evils of war that can thoroughly understand the profitable way of carrying it on,” which means you can’t buy experience. Each of these artists will be at a severe disadvantage when negotiating against the more experienced opposing party. So here a few things to consider to even the playing field.
But first, let me tell share a helpful anecdote. A publishing company was negotiating with an author for the rights to publish her yet to be written new novel. The author had been negotiating with the publishing house but wasn’t sure what was normal for these situations, she only had the idea that a book deal with a publishing house was probably a good thing. They had sent her what they had said was their standard agreement and discussed the basic terms. As such, she didn’t negotiate much. The written agreement was 12 pages, replete with legal verbiage the author didn’t understand, so she sent me the agreement for review. According to the terms, the author would receive a laptop on which the author could write the book, as an “advance’, which would be applied against her earnings. Advances are standard practice. Once the book was completed, the publishing house had the “option” to pick it up.” However, no details of the publishing aspects of the deal were in this agreement, they were to be negotiated at a later time. But the agreement had a clause that was very detrimental for the author. If the company did not option the book, they would still receive 10% of any sale of the book if published by any other company, including 10% of the sale of any movies, TV, licenses, or derivatives (any future books in the series). So, imagine this was the deal given to J.K Rowling for Harry Potter. The publishing company, in return for a few hundred dollar investment of a laptop, would have received 10% of the billions of dollars that made Rowling wealthier than the Queen of England. Understanding all the terms, she renegotiated the terms.
That leads us to tip number #1; make sure you have a lawyer. In an ideal world, a young artist would hire a lawyer to negotiate the deal against the lawyers on the opposing side, but lawyers are expensive, and most young artists cannot afford them. But, at least have a lawyer look at any contract or other type of agreement before signing. It won’t cost much for a contract review. In any negotiation, you are likely starting from a weaker position already. Negotiating without an attorney present may give the other side the impetus to take advantage opt that weakness. Having a lawyer review any agreements will go a long way toward strengthening your negotiating position.
“In war, then, let your great object be victory, not lengthy campaigns” -Sun Tzu
Next, let’s borrow from Sun Tzu again: “In war, then, let your great object be victory, not lengthy campaigns”. What this means is that before you start negotiating, know what you really want to achieve during the negotiation. You can’t negotiate for a position if you don’t know what that position is. Do research on the industry norms. Ask friends about their deals. But most importantly, decide what would be a deal killer for you. Different people may have different objectives if put in the same negotiation. Figure out what would you want and if that is all you get, then great. You may look back later thinking, “I could have gotten more.” That doesn’t matter, though, as long as you received what you set out, then you can claim victory.
Imagine you are a budding photographer offered your first show in a very reputable gallery. While getting a significant percentage of the sales would be great, maybe just being with the gallery is enough as it will provide the notoriety you need to get a book deal you have been discussing. The gallery offers you a 50%-50% profit split, but requires that you print all the work on aluminum and pay for that yourself. The gallery is trying to limit their risk if your work doest sell. But that is a bit expensive for you and it’s is going to max out your credit cards. If you don’t sell, you are in real trouble. So you make a counter offer of 75%-25% split, but the gallery pays for the printing. The potential extra profit may be worth the risk for the gallery. Is it the best deal for you? Maybe not, but it does achieve your goal of showing at the gallery and the 25% is still above what you would have settled for, since your goal was merely to show at the gallery. Both sides win.
But be prepared to walk away if you are not getting what you want. There will be other opportunities. Having a bad deal is often worse that ending up with no deal.
In part 2, we’ll take a look at some of the specific items that should be part of your contract, as well as some of the more mundane contract clauses you are likely to run across. Stay tuned.