Friday, July 27, 2007

US Presswire - Contract Analysis

As contracts go, this one's pretty heinous. I'm not saying it's alone in that category - the old WireImage contract, Getty's baseline contract, and others are too. Let's look at some of the particularly offensive language in this one:

I) Grant of Authority. Photographer hereby grants to Agency the exclusive worldwide right to market, distribute, license and negotiate the product ion rights of all photographic images, digital files and all other photographic materials delivered to Agency by Photographer (hereinafter referred to as the " Images" ). Notwithstanding the foregoing, Photographer shall retain the right to sell or license the Images to Photographer's other editorial clients; provided, however, Photographer shall be prohibited from selling or licensing the Images to any and all other national or international magazine or newspaper clients, terrestrial or satellite broad cast clients and/or internet website clients through any other form of online (internet protocol) distribution, including without limitation Photographer's personal website.
So, we started in discussing this, and Bob, when asked "How do you resolve the conflict between your contract's getting exclusive worldwide rights, seemingly telling photographers they can sell or license the photos, but can't display them to those prospective clients via any online distribution? That term precludes any photographer from even e-mailing a photo to a prospective client for five years." Bob said "Only the ones that are delivered, not all of the images, and no, it does not preclude e-mail.". So, if a photographer 'delivers' 200 images from a game of his or her best selects, and USPW only posts 15 or 20, essentially 'rejecting' the other 180 or so images, they, the photographer, are contractually precluded from monetizing those other images. When I pressed him, and said "Bob, it precludes people from posting them on their own websites to display, as that's actually distribution. It precludes them from being able to display them, in say, a Photoshop web gallery", he said "no, it doesn't. It precludes them from selling them online. It says 'internet protocol'." I said "Bob, that precludes people from even e-mailing an image, because e-mailing uses SMTP, POP, and IMAP - all internet protocols - to do so", Bob responded "I do agree, I do I think it needs some clarity. We are trying there to preclude people from posting the photos on compettiing services." Ok, so, that needs A LOT of clarity then.

Further, it means that whatever you don't "deliver" to USPW you can do with what you want, even "similar" (i.e. the frames before and after). While this would probably violate the spirit of the contract, it does not violate the letter of it. Food for thought.
2) Representations of Photographer. Photographer hereby represents, warrants, covenants, acknowledges and agrees that:
a. Photographer is and shall be at all times be the sole and exclusive owner of the Images;
m. Photographer shall use its best efforts to promote Agency' s name and good reputation throughout the world at all times. and Photographer shall not make any disparaging remarks about Agency.
When I asked Bob about this, about the fact that saying anything critical could easily be construed as failing to meet the "shall use it's best efforts to promote" test, Bob said "If a person doesn't like something about us, or has the facts, they can say whatever they want to say. The clause does preclude people under contract from being critical. Disparaging remarks has nothing to do with factual information. If it's critical, and unfounded, that would be disparaging, and a violation of our contract. Having an opinion and having facts is different."
4) Use of Images. Agency shall have the right in its sole and absolute discretion, to: (i) determine how the Images will be marketed, how the Images will be displayed and how the Images will be distributed to Agency's customers ; (ii ) edit the Images. including the captions and metadata that accompanies the Images; (iii) establish the terms and conditions, including the fees, for the license of the Images to Agency's customers; [iv ] perform its services without Photographer's further approval. Photographer agrees that any Image given to Agency for distribution shall remain available for distribution by Agency for a minimum of five (5) years from the date of receipt by Agency.

Honestly, that's not bad, on the surface, but it sets up Exhibit A, the ability for them to give your work away for free, and you've got nothing to say about it.
5) Compensation. In consideration of the services performed by Agency hereunder, Agency shall retain a commission from the fees collected from the Images in accordance with Exhibit A attached hereto and incorporated here in by reference. Agency shall deliver to Photographer the balance of the fees collected from the Images in accordance with Exhibit A, along with a report listing the origin, description, and amount of sales. All payments will be made by Agency to Photographer no later than thirty (30) days from the date Agency receives payment from its customers . Payments to Photographer will be made between the 15th & 30th of each month where applicable. In the event that no fees have been collected from the Images, no payment or report will be issued to Photographer.
Same as above. This is where you're set up for the "free trial" issues that arise.
Exhibit A
NOW, THEREFORE. the parties hereto hereby agree as follows:
I) Third Party Fees . Photographer agrees and understands that Agency has entered into certain agreements with third party agencies (here inafter referred to as the "Third Parties") pursuant to which such Third Parties have been granted the authority to distribute the Images on their respective websites and via other electronic means. The Third Parties will remit commissions to Agency from sales made by the Third Part ies of the Images (the "Third Party Fees"). in accordance with such Third Party agreements . Thereafter. Agency will remit to Photographer fifty percent (50%) of the Third Party Fees. and Agency will retain a commission of fifty percent (50%)of the Third Party Fees. Agency will remit Photographer's portion of the Third Party Fees pursuant to Paragraph 5 of the Agreement.

2) Agency Fees . Agency will remit to Photographer fifty percent (50%) of all fees collected by Agency from sales made by Agency of the Images (the "Agency Fees "), and Agency will retain a commission of fifty percent (50%) of the Agency Fees. Agency will remit Photographer 's portion of the Agency Fees pursuant to Paragraph 5 of the Agreement. Agency reserves the right to change, adjust or modify the Agency Fees with the prior written consent of Photographer, which shall not be unreasonably withheld or delayed .

3) Uncompensated Use. Photographer agrees and understands that Agency may, from time to time, allow Agency's customers to use certain Images without compensation. As a result, Photographer may not be compensated for the use and distribution of certain Images . This will be for, among other reasons, the purpose of revenue generating usage commitments or for promotional trials from the customer. Photographer agrees this action can be performed in Agency's sole and absolute discretion and without further compensation to or consent from Photographer.
The problem with #1 above is not one specific to USPW, but rather, agencies in general that use sub-agents. If an image is licensed for $250, that sub-agent takes $125 (usually), and USPW's 'full take' is $125, leaving the photographer with $67.50.

#3 above is just a killer. You should be rewarded for having your images a part of a promotional pitch to land a new client, whereby if the client signs and your image was a part of the package that sold them while they were considering, you should get some form of a signing bonus. This also gives them the ability to avoid any commission they want to, all together, by simply stating "oh, that was a trial for them..." While this would, of course, be unethical, there is no audit clause in this contract that gives you the right to audit actual sales figures. One of my early contracts had an audit clause, whereby, I could engage the services of an independent auditor, and if the auditor found more than a 5% discrepancy between reported sales and actual ones, the agency would pay for the audit, as well as all my back commissions.
US Presswire - Introduction
US Presswire - A Conflict of Interest
US Presswire - Friends Don't Screw Friends
US Presswire - Contract Analysis
US Presswire - The Client's Perspective
US Presswire - The Freelancers Perspective
US Presswire - Closing Thoughts

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Anonymous said...

Whoa, whoa, whoa, what? It's insane the things that a company can steal from the worker just because they signed their rights away in the contract.

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Anonymous said...

^^ nice blog!! ^@^

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