It’s no secret that comic books supply much of the underlying source material for today’s most popular movies and television programs. In 2018, superhero movies dominated the box office with Black Panther alone bringing in $200 million in its opening weekend and wrapping up the year with a gross of $1.35 billion worldwide.
While movies featuring the likes of The Avengers, Spider-Man, and Aquaman are based on famous comic book properties, Hollywood’s hunger for the graphic novel has turned such spandex-free indie titles as “Persepolis,” “30 Days of Night,” “300,” “A History of Violence,” “American Splendor,” and “Art School Confidential” into wonderful films in their own right.
So, if a comic-book creator client asks you for help in taking their comic from the page to the screen, what do you do? Well, first you establish rights and the copyright chain of title. For instance:
Did your client create the comic by themselves or work with other artists and writers? If so, did they secure the rights to their contributions through a signed, written agreement to transfer exclusive rights under copyright law?
Was a third-party publisher involved and does your client retain the rights to make audio-visual works and merchandise? Many publishers ask for these rights as a matter of course.
If your client created the work at the behest of a publisher, did they do so as a work-made-for hire? If yes, they may not own any rights to grant to a producer.
Did your client register the copyright to their work?
That’s just a sampling of the substantial prelaunch legal issues to address, which are only the kickoff to the next phase—actual negotiations with a producer. And for Hollywood producers, the linchpin for negotiations is the option/purchase agreement. Hollywood loves this type of contract because it gives producers a chance to shop around a comic book to investors and studios before purchasing the film rights. It’s really two agreements in one: the “option” giving a producer the exclusive right to purchase the film rights to your comic book within a certain period of time; and the “purchase agreement” that delineates the purchase price and other terms of the deal only if the option is exercised. Think “try it before you buy it,” which isn’t as bad as it sounds. Ideally, the client gets paid for giving a producer the right to float their property (for 18 months or more). If the producer buys it, the client gets paid again for the sale of rights.
But then there’s the option/purchase agreement’s couch surfing, mooching best friend: the shopping agreement. A shopping agreement often gives producers, essentially, a free option: the exclusive rights to pitch the comic book to investors and studios without paying for that right.
Still, that’s not necessarily bad for your client. If there are no purchase terms attached to the shopping agreement, the leverage shifts to your client once the producer has an interested studio or investors. Since there were no purchase terms in advance, the ball is in your client’s court to name their price. And a producer with financing is incentivized to make a deal with the rights owner, lest they lose their backers.
There’s also a relatively new hybrid of the option and shopping agreements, which incorporates the worst of both. These “Franken-contracts” often ask for the longer exclusive terms of the option agreement, without offering any up-front option compensation. Additionally, purchase terms are often included in this hybrid contract. Even if the terms aren’t reduced to a sum-certain, they are often constrained (e.g., “purchase price shall be a result of good faith negotiation between the parties, but in no event shall the purchase price be higher than x dollars”).
Option/purchase agreements can be tricky to negotiate, with numerous side issues like the merchandise rights based on the comic versus those based on the film, maintaining a consistency of character and narrative between the two media, and ensuring that revenue doesn’t get stuck in the bottleneck of Hollywood accounting.
As you can see, with potentially hundreds of millions on the line for modern comic properties, the transition from the page to the projector has upped the ante in this rapidly growing industry and heightened the need for well-informed legal representation of creator clients. If you would like to learn more about the comic book option/purchase agreements and the law and practice of representing comic book creators, you can check out CLE courses at Emerald City Comic Con on March 14-15: “From Panel to Publisher—Representing Comic Book Creator Clients in 2019,” and “Comic Book Contract Negotiation and Drafting Practicum—2019.” Learn more about the courses.
Portions of this post were excerpted and adapted from The Pocket Lawyer for Comic Book Creators (Focal Press, 2015). ©2015 Thomas A. Crowell