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Raw Zudanotes II: Rights Agreement

Editor’s note: we continue our skim of the Zudacontracts, with Big Ideas to be developed later. Today: the rights and reversions under which you operate.

First impression: the Rights Agreement is about twice as long as the Submission Agreement. This could take a while. It starts with boilerplate — who you are, who they are, you won, yay. Numbered paragraphs ahoy.

1. Everybody on a creative team has to agree to sign the contract. Question (and this isn’t a knock against Zuda) — what if one contributor doesn’t? Presumably the team loses the opportunity to sign and then we have the question from yesterday — what rights from the Submission do you get back?

2. Okay, it’s boilerplate, but it’s still creepy:

You grant and assign to Zuda, its successors, licensees and assigns, solely and exclusively, in any and all languages and media, whether now known or hereafter devised, throughout the universe, for the term of copyright, all rights in and to the Material (emphasis mine)

So when somebody invents direct brain-beaming of comics on Omicron Persei VIII, this contract already covers how Lrrr can read it. Creepy. Specifically, rights include:

a. print and electronic publication, including A/V of all sorts, merchandising, software, multi-media, Internet and mobile, live stage and commercial tie-ins
b. use and/or licensing; I’m guessing this means that if your ice cream scooper with amazing freeze powers becomes a hot property, DC can pass the movie rights to Warners
c. advertising & promo, including you & your image/bio; if you become famous for other non-Zuda work (in comics or out), expect coattail-riding
d. Verbatim:

The right to edit, alter, revise and make any and all changes to any Versions of the Material, including making necessary additions thereto and deletions therefrom.

Hmmm. VERY hmmm. If you’re absolutely emotionally tied to your idea, this could be a dealbreaker for you.

You can sell your originals, as long as they’re labelled with copyright & trademark (more below), and 100 repros/year. Ownership of your originals is one of the elements of the Creator’s Bill of Rights from 1988 (see Reinventing Comics, pp 60 — 62 and here), so I’m very pleased to see this here.

3. Zuda wants you to sign the Services Agreement and create more work for them; presumably that contract has the details.

4. You get royalties, plus whatever payments the Services Agreement spells out. This is going to be fairly important, so details are:

a. You get $1000 “non-recoupable” up front for what gets posted on the Zudasite. I think “non-recoupable” means that Zuda can’t reduce that amount to reflect expense and effort to promote you (c.f.: the entire history of recording contracts ever)

b through f. various royalty rates are:

  • print — 1% of cover price
  • merch — 1.6% of SRP or 5% of gross receipts if no SRP
  • reprints — 20% of net
  • non-reprint publications (novelizations, books on tape, etc) — also 20% of net
  • other productions (including movies, TV, and stage) — 40% of net

Royalties will be reduced for things like unsold, returned, damaged, freebie, and deep-discounted (70% +) items. “Reprints” apparently covers print not done by Zuda, so the Bulgarian edition of ICSWAFP will get you a paycheck minus

any unrecouped foreign taxes, import duties and/or currency exchange losses, and less all direct costs incurred by Zuda.

I suspect that this is entirely standard boilerplate in any IP-based industy; lotta room there for creative accounting.

Interestingly, the merch royalties don’t apply to licensees. So if Zuda makes an action figure of your ice cream scooper with amazing freeze powers (gotta come up with a shorter name for that character), you get a royalty. But if Warner’s makes a movie out of ICSWAFP and there are action figures that look like, I dunno, the Tobey Maguire of the future as ICSWAFP, you get zip.

The 40% on scripted productions sounds good, but I’m not sure if the “net” in this case means “net on what Zuda made from the licensing”, or “net profits after ICSWAFP turns out to be a $300 million blockbuster”. Even if it is the latter, keep in mind that Frank Zappa once described entertainment-industry accounting as existing somewhere between “usury” and “science fiction”.

5. Teams split money paid out evenly, unless all team members agree to a different split. If your work is commingled with others (say, in a Best of Zuda ’08 anthology), you get pro-rated based on amount of content in the total package. If you don’t complete on deadline and Zuda has to pay somebody to finish for you, they get paid out of your royalties (up to a 50% reduction in payout to you). These all seem pretty reasonable.

6. Royalties are biannual, but you don’t get anything unless it amounts to at least $200. Fair enough.

7. The proverbial big one. This is going to be a vicious reduction to first principles:

  • You keep copyright. That’s good.
  • Zuda gets trademark. That’s less good.

Going back to the popular Siegel & Schuster example, if they’d kept copyright on Superman from Action Comics #38 and DC’s forerunner kept only the trademark, they would have wound up in about the same place as they did by having neither. S&S could have determined how and under what conditions the specific content of the Superman story would be printed and distributed. But the idea of Superman, and the ability of DC’s various historical identities to use Superman however they saw fit would stay with DC.

Which of those two is more valuable in the long term?

8. But you might get your rights back. After four years of your last hand-in of material under the Services Agreement, if Zuda hasn’t paid you at least $2000 over the prior two years, you can request in writing that all rights return to you.

It seems from a cursory reading that if your property if worth enough, but the royalties (or the terms of the Services Agreement) are slight enough, Zuda could just issue a new edition, cut a check, and keep the rights in play. This reminds me of the famed “Alan Moore gets the rights to Watchmen back as soon as it goes out of print” paradox.

And there’s my answer in sub-paragraph b: within six months of your request, Zuda either (choose one):

  • returns the rights
  • pays you for more services on mutally-agreed terms
  • finds a way to pay you at least $2000
  • brings material back into distribution

There’s the out — as long as Zuda are willing to cut you a check of at least $2000 every other year, you will never get the rights back. The cynic in me notes that what with pre-press, promotion, legal & other sundry costs, $2000 is probably a lot less than it would take to a) prepare a new release; or b) negotiate new work with you. So pretty much it’s either give you back the rights or cut a check.

The next sub-paragraphs indicate that if Zuda doesn’t give you your rights back, the 2 year clock starts again, and if they do, you get everything back. Given the long history of comics publishing treating all creator effort as work-for-hire, I suppose that even the theoretical return of rights is a step forward. But given that Zuda is meant to be working in the space of webcomics, which has a history of creator ownership, this model is about 180 degrees from the way that virtually every webcomicker works. They may be able to attract people who are not presently known and pro-grade webcomics creators, but I think this is a dealkiller for any existing webcomics creator.

The rest of paragraph 8 is technical details: you can publish whatever you like after reversion, but you have to leave Zuda’s name off it; anything they created in conjunction with you work they keep; any licenses or options (say, for ICSWAFP: The Movie!) in effect at the time of reversion stays in effect (but reverts to you on expiry), and nothing strikes me here as unreasonable.

9. Zuda has power of attorney to make deals on behalf of your material. Makes sense.

10. You can audit the books at your expense; bring your own forensic accountant.

11. You have the legal authority to assign rights to Zuda because this really is your work and nobody else has a claim on it. Boilerplate.

12. If you screw up, Zuda is not to blame and you can’t sue them, and vice-versa.

13. You get credited as creator of the work “in a size and manner consistent with Zuda’s standard practices at the time of publication”, which could include the fabled Teeny-Weeny Eyestrain-o-Vision. But if anybody fails to credit you as creator, inform Zuda and they’ll try to fix it.

14. You get free copies of various stuff. I like free stuff.

15. Zuda can sell their rights to the work, and you can direct them to pay your share to somebody else.

16. Zuda does business with Time Warner companies, and you agree not to challenge dealings solely on the basis of their having a common corporate parent. Still and all, expect Warner TV or movie productions to have a leg up on the option for ICSWAFP.

17. All notices in writing, make sure you get a receipt, and don’t send it postage-due (’cause honestly, you’d be a jerk if you did).

18. Again, all of this is governed by the law of New York.

19. Except as laid out above, none of Zuda’s interests will ever be given to you unless you sue and win.

20. Severability again: If any part of the agreement gets waived, it’s specific to a given item and not applicable to the rest, or to future agreements.

21. Zuda doesn’t have to publish your work at all. If that’s the case, look for a reversion after four years if they decide they don’t like your idea, or $2000 checks every other year if they do.

22 — 26. There are no side agreements, neither party is compelled to do anything illegal, you and Zuda are not partners, paragraph headings are labels only and have no legal meaning, and there are no third parties to the agreement. All boilerplate.

Four elements of the Creator’s Bill of Rights — right to accounting, legal counsel, prompt payment, and original artwork — are addressed in this contract. In fact, as others have pointed out, Zuda is recommending that you get a lawyer to advise you on the contracts before you decide to submit, so that’s actually progress. Unfortunately, the other eight — especially the first, The right to full ownership of what we fully create — are wavied under this contract.

[...] mosie1944 wrote an interesting post today on Raw Zudanotes II: Rights AgreementHere’s a quick excerptprint — 1% of cover price; merch — 1.6% of SRP or 5% of gross receipts if no SRP; reprints — 20% of net; non-reprint publications (novelizations, books on tape, etc) — also 20% of net; other productions (including movies, TV, … [...]

Thanks for taking time to analyze these contracts and to write up your thoughts.

I’m not a lawyer. That being said, I’m not entirely convinced that the contracts are really terrible as long as everyone who signs it is aware of what could happen.

It’s kind of like walking into a 7-11 only to find out that they are giving away lottery tickets with the understanding that they will take a certain percentage of your winnings should you hit the jackpot in exchange for that particular 7-11 giving you the opportunity to play for free.

Congratulations! You win the big Mega Jackpot– and the owner of the 7-11 gets anywhere between 60% to 99% of your winnings based off of which game you were playing when you won.

Eh, I’m probably just restating the obvious there, but I get to typing and can’t stop myself. The point of this comment is to ask you if I am correct in my understanding that they will continue to hold certain rights to the material you created for them even if they allow the rights to revert to you after the four year period. My reading of the contract– specifically, the submissions portion– leads me to believe that Zuda retains the rights to produce print anthologies based off of the submissions material (if you were selected for the competition) that you created specifically for them EVEN if they give you your rights back. I’m basing that off of paragraph five which states: “The perpetual right to include the Submission in a print anthology of submissions (an “Anthology” ), on a non-exclusive basis.”

That statement, and the general attitude of the entire contract, leads me to wonder that should you win the competition that they would hold similar– if not more comprehensive– rights to material that you created during your contract of 52 additional screens for them.

Again, I’m not a lawyer, but it certainly reads that way for the competition part at the very least.

Your reading of the Rights Agreement pretty much tallies with mine. In essence this is broadly similar to a standard “work-for-hire” agreement. You get paid. Zuda takes all material rights and control. There are reversion rights but Zuda can block these at minimal cost.

There’s nothing inherently bad in this. Like the much-maligned Platinum contract it will suit some and not others.

It depends what you want but, if you’re looking for a creator-owned deal, then this probably isn’t it.

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[...] On the one hand you’ve got the traditional publisher, complete with royalties for creators, paid from the coffers of a large media conglomerate. I particularly recommend your [...]

[...] contributions. First impression: the Services Agreement is between the Submission (short) and Rights (long) Agreements in length. As before, numbers are taken from the various paragraphs in the [...]

[...] — The amount of money that a Zudawinner needs to be paid every four years to keep the rights from reverting back to the creator. Significant mostly because Zuda (which has [...]

[...] Bayou to hit the stores in 2009, and let’s hope that they’re such big sellers that the 1% royalty the creators get actually adds up to real [...]

So here’s a question that I’m still trying to find the answers to: if you submit your comic and you’re selected for the month’s contest, BUT you don’t win… what happens? Could you then take your work elsewhere? Or is it stuck in the Zuda warehouse forever?

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