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March 19, 2014

The Wildseed Studios Deal

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We’d like to start this pretty serious and technical blog post with something fun – a recent compliments slip we received with a signed contract from Wildseed Ralph Kidson:

Every now and again we see or hear of discussions taking place about the deal that Wildseed Studios offers to creators whose ideas we invest in. For example, this discussion that took place after we announced that we were running one of our ‘Meet Wildseed Studios’ events in Belfast in December (next one: London – 10th April).

This week we also heard about what sounded to us like a partially informed discussion raging between Creatives in an agency in the UK about the merits or otherwise of the Wildseed deal ….

From what we understand the discussions tend to be between people who think that Wildseed ‘takes all your rights’ and those who aren’t so sure and want to know more. We thought it would be worthwhile explaining a little more about our deal and how it works.

First off it’s really important to say that by submitting an idea to us through our web-based submission system you do not give us any rights other than the right to look at your idea. We get permission to keep a copy of the information that you send to us but you can also request us to delete it from our system at any point before you enter into a contract with us.

If we like an idea that is submitted to us then we get into a conversation with you and the first thing that we tend to do is start a period of unpaid and un-contracted development together.

Jesse, our Creative Director, will start a creative conversation with you and often do a fair amount of work with you to see if the type of creative mentoring we offer can, in your opinion, make your project better. This gives us a chance to get to know each other and to see if we can work together. At any point during that process you are free to walk away of course and take any of the ideas that have been added to your idea by Wildseed and call them your own …

Also during this period we will send you our term sheet – a summary of the main commercial terms that are represented in our contract. We can talk you through these so you will have a good idea of what we are proposing.

If the creative discussions are going well and the headline deal terms haven’t put you off then we will issue a full contract to enable us to start spending real money on your project.

We never want to get into business with anyone who hasn’t taken proper business or legal advice on our contract and so if you do not have or cannot afford an agent or adviser or lawyer to review your contracts we will, on a discretionary basis, pay for you to consult with an independent media lawyer for a couple of hours to be advised as to the merits or otherwise of our deal terms.

This can be a bona fide media lawyer of your choice (not a general solicitor) or we can recommend someone for you to speak to who will act on your behalf. Of the people that we have signed contracts with to date approximately half have taken us up on our offer to fund independent legal advice for them.

We have a favoured nations, one-size-fits-all deal which we tweak to accommodate people’s individual circumstances but which we do not vary in any material way for individual projects, so you can be confident that the deal that we offer to you is the same deal that has been offered to everyone we want to work with and the same deal that the people we are already working with have signed.

Where your lawyers or advisors make suggestions to us that we think make the deal better for both parties and which we incorporate into our terms we go back (once a year) to everyone we have signed with and offer to amend their agreements (usually in their favour) to keep everyone on the same deal.

Because our deal offer is a bit different and, we think, a bit innovative we don’t publish the full term sheet for everyone to see, we only send that to people we are interested in working with, but we are happy to talk about the highlights of the deal (which you can also read about in our FAQ’s).

We designed the deal with a number of key principles in mind:

1)    We can’t squat on your IP and do nothing worthwhile with it. We have designed our deal to return the underlying rights in your project to you if we don’t make you money or fund any new material in any given year.

We achieve this by using an underlying rights license and we explain how that and the other key terms of our deal work more fully on our website here.

2)    You can’t do the hard yards of building a project from the ground up with our investment and then, if your project starts to take off, hop over to another company and leave us empty handed.

Our underlying rights license is exclusive and automatically rolls over year on year if we have been good partners to you and consistently ordered more material from you or paid certain levels of royalties to you.

3)    We wanted to reverse what we perceive to be a prevalent trend in mainstream deals which is to make a negotiation all about maximising the upfront fees and consign profit shares to the ‘well, that will never happen’ file. In the early stages of development and investment we pay next to nothing in fees up front but share in a meaningful and material way with you in all profits generated by your project for ever. And these are proper profits, not ‘Hollywood Profits’.

4)    You have creative control of your idea. You can’t force us to do something that we can’t afford to do, we can’t force you to make creative changes to your project that you don’t want to make. We will give notes, we will argue our case but at the end of the day if you decide you want your project to go in a certain way we will respect that decision and enable it.

5)    We will own any material created using our money and your underlying rights. The example we give is that if you hold the underlying rights to a character called James Bond then we enter into our exclusive, rolling annual license for the character of James Bond. If we finance a film using that character, like Skyfall. Then we own Skyfall. If we stop making James Bond films with you then the rights in the character of James Bond revert to you. If we want to make another film with the character then our license rolls over to enable us to do that.

6)    If we have been good partners to you, commissioning more material and paying you increasing amounts of money over a period of five years we do have a provision in our contract which gives us the option to acquire the underlying rights to your IP but your share of profits in the project persists in perpetuity.

This, I think, is the provision that gives people pause – the ‘they take all your rights’ provision. In thinking about this provision we would ask you to consider the following:

We have this provision because we need to secure for our Company and  our investors assets that we can  value and trade without fear of loss of control of them after we have put in 5 years of hard work to build them up.

From your point of view what is more important? Ownership of copyright or control and revenue? If it’s the former then you shouldn’t sign our deal. Naturally we also believe that you should have your head examined but that’s just our opinion.  Fox took all of Matt Groening’s rights to the Simpsons, they own that IP. He could have turned them down and retained ownership of his IP …. you fill in the rest of that scenario.

So far, everyone we have wanted to work with has agreed to our deal whether they are first-time creators or established talent represented by leading agents or advisers.

In a recent discussion with one of the UK’s leading agents about our deal we discussed the issue about their client agreeing to an option for us to own the rights to a character that their client had created. Apart from the frankly more important consideration of there being really good creative and personal fit between their client and Wildseed, there were two main factors that enabled this agent to recommend our deal to their client:  the fact that we don’t load budgets with our own costs which then have to be recouped before a show goes into profit and the size and extensiveness of the profit share that we offer. ‘That’s good’, said the agent, ‘we couldn’t get that anywhere else’. The agent recommended the deal with the proviso that there are some things that are very good for Wildseed about it and some things that our very good for the Creators about it. We think we have got the balance about right.

We recognise that our deal is not for everyone. For example, our deal is probably not right for people who are in the process of establishing a ‘quote’ in the market for their services – i.e. for whom working for low or no fees would damage their ability to do ‘market rate’ fee deals with other companies for other projects. Nor for people for whom £10,000 (and Wildseed’s expertise) is not an amount of money that will make a fundamental difference to their ability to get their idea off the ground.

But if you are sitting on an idea which you think might appeal to us and not submitting it to us because you are scared that we are going to rip you off or take all your rights, I hope you will at least give us the opportunity to get into a conversation with you if we like your idea.

Any questions, send us an email to hello@wildseedstudios.com and we will do our best to answer them. Plus, we have enabled comments on this post and we will do our best to engage with any discussion that arises as a result of it.

Best wishes

Miles

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