JOHN OSTRANDER: PROFIT, LOSS, MEDIA COMPANIES AND YOU

by John Ostrander

ContractYears back, I was negotiating a contract with DC. I read the contract and there was something I didn’t understand so I asked around the office as to what it meant. Most of the people there didn’t know either but the consensus was, “Just sign it. It’ll be okay.” One person actually said, “We’re all family here.”

My response then was that we were not. I had family and DC wasn’t that. I had friends who worked at DC but DC itself was not my friend. It was a corporation and the relationship I had with it was based on that contract and the business practices of the company. Despite what Mitt Romney claims, corporations are not people, too, except in the legal sense. I’m not saying that was or is bad or good; it’s simply recognizing differences.

Recently, DC announced a change in how it will run its participation program or what used to be called “royalties.” They pay you for the work you do but if the corporation gets a second bite of that same apple, the theory is that those who created the work should get a taste as well. It wasn’t always thus in comics; it was fostered and pushed by the independent comics (such as First Comics) and has occurred during my professional life time.

Many of the changes sound good. Colorists will now get cover credit and a share in the participation pool. I’ve long spoken and noted that colorists are major contributors to graphic work; I’ve compared them to soundtrack composers in movies and TV, heightening and guiding emotional reactions to the story. This change recognizes their importance to the work.

There are other small but useful changes. The opportunity to have one’s participation check directly deposited into a bank account is a good and useful change.

One change gets my Spidey-sense tingling. (I know, wrong company. There isn’t a corresponding DC metaphor. Bat-tinglies maybe?) The memo says: “There are a few significant differences between this new plan and what DCE has offered in the past.  Perhaps the biggest difference is that all participations will now be calculated based upon DCE’s net revenue from a book’s sale rather than on the cover price.”

“Net revenue” is the question mark here. One of the Hollywood jokes is there is no such thing as net profit. Without much effort, you can find a list of Hollywood blockbusters that, according to the accountants, somehow never showed a profit. The Lord of the Ringstrilogy? Nope. Didn’t make a profit. The Batman film with Jack Nicholson and Michael Keaton? Ledger shows a deficit, according to the numbers folks. If one division of a company uses another division of a company for something, they pay them. It’s all the same company or conglomerate but it gets billed. The money keeps flowing around internally.

In the interest of full disclosure, I should say I think I have benefited from the system. Warner Bros movies and DC Entertainment both belong to the same parent company. If Warner Bros makes a movie and uses Amanda Waller in it, they have to pay DCE a fee for that use. And some of that comes to me.

That said, if we’re dealing with a process involving net profit, the only chance the artist might have to get some of it may be to have a clearly defined definition of net although some might argue with even that. Some percentage of gross is more likely to give the creators some money than net. Working off the cover price was and is more likely to give the creators some money.

There are also new thresholds “which triggers participation payments.” Translated: the amount of sales and/or money taken in. Participation kicks in after the threshold reaches a certain point. Will that threshold be for each individual issue or an aggregate for an arc (usually five to six issues)? Do foreign sales figure into that threshold?

By Hollywood standards, the revenue that comics bring in is chump change. What gets paid to creators is really nickel and dime. So why deny it them? As I said, the principle should be if the company gets a second bite off the same apple, the creators should get a taste. That seems fair.

I haven’t yet seen any definition of net or what the thresholds will be. I have written to DC and asked; I’ve been promised a phone call wherein they will try to answer my questions. A clear definition of net versus gross would cool down my Bat-tinglies.

To be clear, this isn’t an attack against anyone at DCE. I know and like and respect many people there. They work at DC, but they aren’t DC. DCE is a corporation. It’s not my family; it’s not my friend. It’s not my enemy. I expect those inside DCE to do what they regard to be in their own best self-interests and that means in the corporate self-interest.

To paraphrase Mel Brooks, they have to protect their phony baloney jobs. That’s why I’m not certain that the new way of figuring participation is in my best interest. I would be delighted to be wrong.

We’ll see.