I’ve probably done dozens of interviews and convention panels over the years, maybe a hundred? Some questions come up over and over, and at this point trigger almost prerecorded answers. Some, of course, deal with confidential information that I don’t feel can be spoken about. Others that I think someone might be curious about never come up. Here’s one I think is interesting to have on the record:
What was it like designing the royalty system back in 1980, when no comics publisher had one?
There were some fascinating debates. The relative contribution of writers and artists was one: page rates (the only form of compensation at the time) were heavily weighted towards the artists, but it was considered fair because the time spent drawing a page (unless you were Sergio Aragones) was so much greater than the time spent writing a page. Only MAD Magazine had a structure that paid writers as much per page as artists, and the demands on writers were very different there (fewer pages per assignment, more pitches required to sell a story, and the taut scripting that line after line of humor required).
Amusingly, perhaps, we tended to argue against our own specialties. There were four of us in the process: Jenette Kahn presiding (who had never freelanced in comics), Joe Orlando (predominantly a penciller in his comics work), Dick Giordano (far more active as an inker than a penciller), and me (a writer). Perhaps it’s that we value skills we don’t possess over own, which we take more for granted? In any case, in carving the pie, Joe was the strongest advocate for writers, Dick for pencillers over inkers, and me for artists on the basis of the time it took them to produce their work.
The overall size of the pie was constrained by the budget lines I had figured out how to raid to finance the change in the short run (we all believed—and were proved gloriously correct over the next few years—that the improved work the royalties would stimulate would more than pay for the investment). Did we want to spread it thinly over many titles, or make it an incentive for our best-selling titles? The latter seemed wiser to us all. While it would take a few years for projects to get into the system that reflected talent’s response to the incentives, it’s easy to draw a straight line from the institution of royalties to the kind of phenomenal effort inherent in BATMAN: THE DARK KNIGHT RETURNS, for example.
There are generally three ways participation schemes can be calculated in media: based on the nominal retail price (the standard in book publishing in those years), based on dollars actually received (analogous to the ‘gross’ deals in film), or based on the net profits of the project (a version of which had been the very positively viewed approach used in underground comix, which talent then viewed as ideal simply because it was the only scheme where comics creatives had an upside in success, and some folks had made significant money over time). Basing on retail had several virtues: the parallel to book publishing (perceived as a far more decent field than comics), a fairly transparent calculation that should stand up on any audits, and relatively easy to attach to our then-simple accounting systems. It also, to my mind, had the great advantage that it was less manipulable than the other two types of calculation. This doesn’t mean that gross or net deals aren’t honest—in recent decades both of these structures have become commonplace in comics, and in most cases seem to be used in ways that are equitable and with an honest spirit. But they’re intrinsically more opaque, and when controlled by those of less decent intent, harder to deal with.
The last of the factors was playing with the math and finding a definition of the pool that might accomplish all this. The total royalty pool percentage ended up at 5%, a number picked for its use in the children’s book business at the time (and remember that comics were definitely still considered children’s reading at the time), and the threshold set at 100,000 copies. That was both a number that was achievable by our best sellers (though few titles hit it), and if you calculated the amount typically paid out in page rates times the low cover prices times that mark, the page rate ‘earned out’ as if it were an advance.
Ideally, from a competitive standpoint this would also be a much more expensive plan for Marvel to implement, given how many more copies their books were typically selling in 1980. We had hoped it might give us a lead in hunting talent for some time as a result, but to the credit of Jim Shooter and Mike Hobson’s efforts, Marvel was convinced of the absolute necessity of following along and implemented an almost identical plan within a month or so.
So much of this changed over the ensuing years as the comic shop market replaced the newsstand as the principal point of sales for comics, as the number of competing publishers exploded, and the variety of deals for comics talent expanded offering many opportunities (some good, some illusory). But the basic principle that aligning the financial success of the company with financial success for the talent proved right and enduring, and I’m proud of the work we did at the time, and the spirit in which we approached it.
Pauk, it is nice to see you make mention of the alternative (underground) comix business model which began unfolding summer 1968 when Print Mint out of Berkeley California took Zap Comics and other alternatives into national distribution. This model became adapted by Rip Off Press, Krupp Comic Works < Kitchen Sink, Last Gasp, etc. This took a bit more than a decade to percolate for the New York based Code Comics to come to grips with when you guys sat down to devise your own NPP DC Comics response.
A royalty-paying system was indeed devised paying out approx 5% of the cover price. Each time there was a reprinting of any given comic book, more royalty was paid out; or, at least, owed on.
A maybe even more vital aspect which is left out of your math equation is all those creators also retained ownership copyrights. A much murkier, yet vitally important aspect of Creator's Rights.