Wednesday, February 22, 2012
Creative Factor @ Javits
This year's topic was contract negotiations. We presented from perspectives established for the Handbook of Mr. Outside (RCL) and Mr. Inside (ROW). Those perspectives we each gained from our thirty plus years of licensing and developing toy and game product.
Richard spun his always entertaining, anecdotal experiences bookended by Starbird in the past to the just announced return of Furby in 2012 There is little to contest in his 10 steps to negotiating licensing agreements. This wisdom has guided him through a myriad of successes enjoyed throughout his career. So everyone listened up!
1. Negotiate yourself. No one will do it better than you and no one has more to gain or lose. It is advisable to have a lawyer as your backup before you ink your signature.
2. Only use lawyers experienced with toy industry contracts.
3. Two plus two is never four. Exceptions always outnumber rules.
4. Never fear to negotiate. Never negotiate out of fear.
5. If it ain't on the stage, it ain't on the stage. Confirm every conversation with a memorandum to avoid misunderstandings.
6. Keep agreements short and to the point. The length of the contract is inversely proportional to the amount of business.
7. Do not accept standard contracts. Treat boilerplate terms as variable. Nothing is as temporary as that which is called permanent.
8. When in doubt, ask. Asking dumb questions is easier than correcting dumb mistakes.
9. Thou shalt not committee. Any simple problem can be made insoluble if enough people discuss it.
10. Have fun. The moment a negotiation feels uncomfortable, I pick up my marbles and go home.
• The Tip: Don't show a lot, focus on the best and make it a WOW! event. What acquisitions rep can leave a WOW at the gate? And once the concept goes internal, it will live or die on its own merits and the enthusiasm of a product champion to fit the concept into the company's marketing plan.
• The Tip: A company's internal process often needs at least 30-45 days for a concept to be stamped as viable; longer than that, Go for the Option!
Mr. Inside continued on detailing the POT (post option time) to K (code letter for Contract). The talk walked through the business points essential in a K without a focus on all the legalese that shrouds contractual terms and conditions and creates ump-teen page licensee contracts. (The Toy and Game Handbook covers this topic in Chapter 9, Molding the Deal.)
Richard and I enjoy the opportunity to share what we can with inventors. Good that the TIA and the Creative Factor gave us the forum to do that. As we see it, the more inventors know about the business side to complement their creative side, the better prepared they will be to get fair and equitable terms.
Last we saw of our audience, they were rushing to the Javits' aisles, hopefully better prepared to join the fray!
*We are now working on an updated edition which will soon be in e-book form. Watch for news of its release when available on this blog.