Should You Sign an Exclusive Agreement

Should you Sign an Exclusive Agreement – What to Consider by Maria Brophy

“It is one thing to license one design or collection with a company to see how it goes.  It’s like going on a blind date – you see what happens. But it is quite another to tie your wagon to a company for 2-3 years.”  Artist Tara Reed

Before signing any document that has the word “Exclusive” in it, be aware of what you are giving away.

This advice applies to all business arrangements, no matter what niche you work in.

In the world of art sales, licensing and exhibit shows, often we get asked to sign an exclusive agreement, and most of the time, I won’t.   I’ll explain why – read on:

WHAT DOES EXCLUSIVE MEAN? When you agree to give someone an exclusive, it means that you cannot sell your goods or services to anyone else for the term of the agreement.

Occasionally, signing an exclusive can make sense.  But usually it does not.

REASONS NOT TO SIGN AN EXCLUSIVE AGREEMENT:

• You are shut off from other opportunities when you sign an exclusive.
• The company asking for an exclusive isn’t offering any extra money or incentive for giving it to them.
• If the project, exhibit or product fails, you may still be tied to the exclusive, and now you aren’t making any money off of it at all, nor can you go elsewhere to earn from it.
• The most important reason of all:  In the event of bankruptcy, the law will hold you to an exclusive, even if the company goes bust and isn’t able to pay you anymore.  This is why in the licensing world, exclusives are rare.  (My attorney says that including wording that says “should the company go bankrupt, this contract is void” does not solve this problem.  The bankruptcy laws do not recognize or honor that language in a contract.)
• If there is no value to be gained from giving an exclusive, not for you or the person you’re granting it to.

I WAS GLAD WE ARGUED FOR A NON-EXCLUSIVE WITH SPORT-FUN TOY COMPANY:

We signed a licensing deal with one of the largest U.S. toy companies for skateboards a few years ago.  They demanded an exclusive.  I held my ground, for all the reasons above.  But I assured them that we wouldn’t do a skateboard license with a competing company (that would be stupid on our part).  Eventually, they agreed to a non-exclusive.  I kid you not, 6 weeks later they went bankrupt!  And we were free to do a skateboard license with any other company.  Had we agreed to the exclusive, we would have not been able to business with another skateboard company for 2 years, even though we weren’t earning from this license.

HOW DO YOU GET THE CLIENT/GALLERIST TO DROP THE EXCLUSIVE REQUIREMENT?

Don’t be afraid to question why they want an exclusive.  Get to the bottom of what their real concern is by asking them what it is.  And then find another way to give them what they need.  You do this by having a grown-up conversation.

Just last week, a client that pays Drew to travel and paint at events asked that he sign an exclusive on his designs.  I explained that we can’t because his designs are being used for other things.  I asked why they wanted an exclusive.  They said they were worried that their competitors would contact Drew and have him do the same work for them.  After all, they hired Drew to do a special promotion that they are putting a lot of money into and they are paying us top dollar for it.  I said okay, instead of giving an exclusive on the designs, why don’t we agree to not work with your direct competitors for one year?  That way, we keep control over the designs, and they get the assurance they need.  Everyone wins.

There’s always a way to give your client what they want without giving it all away. Just find out what they REALLY are after.  I find with some companies they don’t even know why they want an exclusive. In one instance, a licensee insisted on one because his highly paid attorney said he should.  But there wasn’t any reason behind it!

WHY EXCLUSIVE AGREEMENTS HURT GALLERY SALES:

In the case of galleries, they can act just like jealous teenagers.  They don’t want anyone else to get what they think is theirs.  But it’s dangerous to give a gallery complete control over your entire career.

There is a gallery in Newport Beach, California that asked my husband Drew to exhibit his artwork.  The gallerist handed us an “exclusive” consignment agreement.  This meant that Drew couldn’t exhibit his art in any other gallery, ANYWHERE IN THE WORLD.

“Why do you need to have an exclusive?  You don’t have locations else-where, do you?” I asked.  The answer was no.  They had only one location, but wanted to make sure that nothing was sold from their artists anywhere else!  This thinking is completely backwards, and here’s why, as I explained to the gallerist: If Drew isn’t exhibiting anywhere else in the world, it’s not going to help the sales of his art anywhere, including in YOUR gallery.  It will hurt ALL sales.  He didn’t see my point, but granted, he was pretty stubborn. After some going back and forth on it, the gallerist removed the word “exclusive” and we agreed to not exhibit at any gallery in the actual town that the gallery was in.  That seemed fair and made sense.  The world-wide exclusive was just silly.  I found out later that other artists with that same gallery made the mistake of signing his exclusive agreement, which had a 5 year term! I discovered this when an opportunity to do a group show in a town 70 miles south of this gallery came up.  I called one of the other artists that was in the gallery in Newport Beach and asked if they were going to do the group exhibit.  “Oh, I can’t.  I’ve signed an exclusive with the Newport Beach gallery and can’t do any other shows for 5 years.” Yikes. By signing a world-wide exclusive, this artist can’t be a part of ANY art show ANYWHERE for any reason.  He’s going to miss out on a lot of exposure. And guess who else misses out?  The Newport Beach gallery.

They will have an artist with a shrinking, rather than growing, resume of shows and exhibits.  Not good for high-end art sales.

The worst part is that this artist tells me that he sells less than a dozen paintings a year through the gallery in Newport Beach.  The exclusive prevents him from making a living off of his art.

WHEN SIGNING AN EXCLUSIVE MAKES SENSE:

In some instances it makes sense to sign an exclusive – like when it means high-dollar stakes and massive sales.

We agreed to an exclusive Drew Brophy/Converse Chuck Taylor design to Journey’s shoes.  That was in exchange for a large order, as they have 900 stores.  But that exclusive had limits to it; it was for one specific design, not the entire category of shoes and it was only for summer 2010.

Here are some sensible reasons to sign an exclusive:

You are paid extremely well for that Exclusive through a Guarantee: A guarantee in the contract states that you are paid a minimum dollar amount regardless of what sells.  Example:  You are paid a minimum of $20,000 per quarter regardless of what actually sells.  (The dollar amount should be what makes it worthwhile for you to not do work with anyone else).  This way, if the company doesn’t properly sell your art, you are still getting paid for that exclusive.

The contract has a very short time period: Narrow it to one or two years, that way if the client or gallery doesn’t succeed selling your artwork, than you only lost a year or two of your career.  Think long and hard before you sign a long term exclusive agreement (unless you are paid extremely well for it).

The contract has a very narrow geographical location: In the case of a licensee, narrow it to where they are actually selling your products (i.e. in North America).

In the case of gallery representation, narrow it down to the actual town that the gallery is in.  If the gallery has multiple locations, than have the contract state all of those multiple towns (i.e. this contract is exclusive in Newport Beach, CA, Miami FL and Manhattan).  That way you won’t miss out on other exhibits that could earn you a greater fan base and more sales.

The contract has a narrow list of items that are exclusive:  An example would be a specific design for a specific product, such as:  The design named “Pure Joy” for printing on 11” x 14” Lithographs.

Being specific allows you to free up all designs except those listed in the agreement.  Trust me, after doing licensing for a few years, this will make sense to you.

There’s money up front: A large chunk of projected earnings up front before signing an Exclusive agreement ensures a commitment on the part of the person you are partnering with.

HONOR YOUR CLIENTS EVEN WITHOUT AN EXCLUSIVE

An exclusive isn’t needed to keep your integrity.  You can assure your client or gallery that you will keep their best interest in mind without that legal limitation.  All while keeping yourself free to pursue other opportunities should they go bankrupt, fail to market you as they promised, or drop the ball altogether.

Even though almost all of our agreements are non-exclusive, I am very careful not to do business with the competitors of our current clients.  It would be unwise to ruin our existing relationships, and it goes against our personal code of values.

We are four years into a non-exclusive arrangement with manufacturer Coastal Classics.  They print Drew’s art on t-shirts and sell them to surf shops and coastal gift stores.  They sell very well.  Last year their biggest competitor called asking if Drew would design t-shirts for them.  Even though we don’t have an exclusive with Coastal Classics, we said no.  It wouldn’t do anyone any good to have Drew’s art with 2 competing companies.  It would be unethical, for one, and the other reason is that it would confuse the customers. But, if Coastal Classics didn’t properly market Drew’s t-shirts and we didn’t see any income from that agreement, we might have considered doing business with their competitor.  We would have been free to take on that opportunity.

The bottom line is that when you sign an agreement, pay attention to the important words that can bind you.   Know what you are getting into, and what you are giving up.

Remember that everything is negotiable, and that most of the companies you work with will understand when you explain why you don’t want to agree to something that’s not in your best interest.

Be honest, up front and reasonable.  As with everything else, just use your head!

How Do Artists Make Money

 

How Do Artists Make Money? - ArtBistro.com

 

artbistro.monster.com

How do artists make money? Valerie Atkisson answers the question.

Art and the Media

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Five questions posed by some Long Island artists
by Carleton Palmer

As a result of a recent gathering of The Artists Group artists at the Mistretta Galleries, Megan Brand offered five questions to this Examiner originating in their Cultural Arts - NewsAction Committee.

1) Where is the Press??? No LI paper has a LI art section, why?
2) Where are the buyers?
3) Organize event days and hours so that they work together
4) One place for open calls for artist
5) One place for show information

Assuming the premises of the questions to have merit without further examining them himself, this Examiner recommended reinterpreting them as a list implying centrally coordinated actions.

Long Island Art News Project Objectives Management
Solicit “Long Island Current Art News Project Objectives” volunteers to pursue each of the listed objectives.
Develop an inter-team collaborative framework; coordinate team leaders.
Develop integrative strategies for the production of proposals, their submission, presentation and defense.
I. Information (News) Projects
A. To develop a comprehensive Long Island current art information journal.
B. To create a pool of current LI show and exhibition information.
C. To develop a resource to acquaint potential art buyers about LI resources.
D. To create a collaborative system between LI art venues to coordinate days and hours.
E. To create a pool for information concerning open calls available to LI artists.
Each of the lettered projects, and/or others, would be obliged to generate tasks including the following:

• Develop an intra-team collaborative framework.
• Describe the elements and features of such an information source.
• Identify successful examples.
• What technologies would serve this purpose, and how?
• Draft a general proposal to achieve this purpose.
• Identify and list likely sources of funding and support for this objective.
• Coordinate with other objective teams to draft targeted proposals.

Toward this end a forum topic “cultural-arts-news-long-island” was created on the same website as the Visual Art Links project, the Long Island Creative Arts Community List, Guide and Locator.
The fact that no comments have been made to the forum does not necessarily mean that the questions are without importance, and Doris Meadows, as promised in the recent Contemporary Arts Examiner first quarterly report, has offered some comments about the first, “Where is the press?”

Doris Meadows, Publicist

"Once upon a time daily newspapers all employed a classical music critic, a fine arts critic, a dance critic and a theater critic; they also had additional specialist reporters in each of these areas.
That was then, this is now. Print is under siege, particularly general interest daily newspapers. The ever-growing importance of the Internet has drawn the advertisers and readers that print publications once called their own. Presently only The New York Times and The Washington Post would even consider replacing a departing critic.
Newsday exemplifies this trend. The paper faces the same bottom-line pressures as other dailies. Additionally, focus group testing has led them to conclude that their readers do not have an interest in the so-called "high" arts. So as a result of economic and demographic trends, Newsday no longer employs staff critics for classical music, art and dance; in fact, they no longer even retain freelancers to review in these areas. Newsday has staff critics for movies and pop music but among the "high" arts there is only Linda Winer who reviews New York City theater. Staffer Steve Parks, a real friend to the arts and someone we should all be grateful to, is now Newsday's sole reporter on the arts; he also reviews productions by Long Island theater groups.
Those of us in the arts should also be grateful to the Long Island Press. While it has no section dedicated to the arts, the Press provides pages of listings and event highlights that focus attention on activities in the arts. Additionally, the extensive reporting in Long Island Press on the reopening of the Holocaust Museum in Glen Cove certainly demonstrates that Jed Morey and his staff have made a commitment to covering the local arts and culture scene.
Long Island Pulse. Long Island Woman and House magazines each devote many pages to calendars of arts activities, Anton Publications dedicates Section Two to the Long Island arts scene as does the Herald Chain's Stepping Out. Further opportunities for visual artists to reach the public are offered by specialized press such as the new Fine Art Magazine and Antiques & Collectibles."

Deb Kasimakis, Pandagraphics

The task of knowing and keeping in mind Long Island’s organizations and personalities requires individuals with capacious memories and immense capacity for socialization. Lacking either, this Examiner must resort to lists. Doris Meadows’ observations begin to provide the elements of a useful tool for studying question number one, particularly by identifying key people and organizations.

Deb Kasimakis, and The Artists Group initiative of its Cultural Arts - NewsAction Committee has performed a service by articulating some questions by artists which are relevant to artists. These are likely to be only a few of many to come that may outline a structure for inquiry. Such inquiry, and potential actions that may result, will require broad participation and support of the artists of Long Island.

A New Day

Welcome to CAN DO. The Cultural Arts News Direct Online Long Island edition, which as far as we know is the only edition. But that does not really matter as we will be concerned here with Long Island artists, musicians, actors, sculptors, theater techs, poets, writers and any other creatives I may have missed in the list. For too long Long Island has been viewed as a cultural wasteland when in fact the exact opposite is true. Look on TV, movies, concerts where ever and you will find Long Islanders at the forefront. Maybe it is the sea air, the crazy traffic or an amazing educational system is a point that we can debate here as well as promote ourselves, our events and our ideas about arts on Long Island. We welcome open discussion and invite you to tell us what you personally think about the arts on Long Island and how we can create a center for culture that we deserve to have here. Countless retail buildings are put up that remain empty and contribute nothing to the economy or the quality of life. Quality of Life is what drew people to Long Island and we must maintain that quality throughout the region. I have posted below an article from Poetry Place Magazine, congratulations to the poets and good luck enjoy the article and remember CAN DO.

We have added an important link for working artists & professionals, NYFA.

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Mission
The New York Foundation for the Arts' mission is 

to empower artists at critical stages in their creative lives. 

NYFA 

THIS IS A GOOD SOURCE OF ALL KINDS OF INFORMATION. 

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Article Poetry Place

Issue #03 - April 9, 2010

Turning a Horse Barn into a Home for Poetry and Poets
By T.J. Clemente

April is National Poetry month, and not to be outdone, the East End of Long Island has a few of its own proverbial irons in the fire. Momentum may be gaining on the project to have a home for poetry on Long Island located at the Horse Barn of the Sears Bellows County Park in Flanders. Early last March, the current Suffolk County Poet Laureate Tammy Nuzzo-Morgan presented a business plan and illustrations to the Suffolk County Legislature for converting the approximately 1,800 sq. ft. barn into an archive to store sacred materials gathered by the North Sea Poetry Scene over the years.
David Axelrod, a former Suffolk County Poet Laureate, three-time winner of the Fulbright Award and author of 19 publications, his most recent being, How to Apologize, (Paradise Island Books) explained that he has been gathering 40 years worth of material for this archive. Axelrod explained that Long Island is a unique place because of its concentration of artistically oriented folks, "more than I have seen studying all over the world on the Fulbrights," he said. Nuzzo-Morgan explained that the poets are looking to enter a long-term extremely favorable lease on the county property. Axelrod added that there are studies claiming that for every dollar spent on the arts there is a seven dollar return to the community. He cites the success in the 1970s of the East End Arts and Humanity Council Headquarters on Main Street.
Axelrod said that he is still proud of the effort. Nuzzo-Morgan, when asked to give an example of the precious materials now being warehoused in climate controlled storage, responded, "Things like an original 1871 Anthology of William Cullen Bryant." Nuzzo-Morgan, who is 100% Long Island schooled, said her own work was influenced by Anne Sexton, whom she refers to as, "wonderful!"
With the one-story horse barn will come a new cultural presence on the East End with events such as poetry readings-like those currently presented in the summer at the Walt Whitman birthplace. Axelrod mentioned that, with the abundance of talent here, the possibilities are endless. Nuzzo-Morgan said that during these challenging times an outlet for poetry and the arts may have an uplifting effect on the soul of the community. Axelrod thinks it will go beyond the soul, having a positive effect on the commerce of the Riverhead area. He proudly points out that over his 30-year career, poetry has had a profound influence on his life.
Nuzzo-Morgan believes that the 200-plus members of the North Sea Poetry Scene create a wonderful force for enrichment of the intellect on the East End. She sees an uphill battle to establish a home at the Horse Barn. But she, as well as fellow Suffolk County Poet Laureates Axelrod, Dan Moran and the very first Suffolk County Laureate George Wallace, are optimistic that there could actually be a place on Long Island where the works of the past can be collected and secured and that could serve as a launching point to exhibit the work of the present. The result being a rich cultural future for the area.
Axelrod suggested that anyone interested in this effort can email Nuzzo-Morgan at tammynuzzomorgan@gmail.com.
Hopefully in the near distant future one will be able to read and hear poetry at the Horse Barn. Hopefully, the powers that be will give these enthusiastic artists a poetic license to build not only their dream, but the dream of many poets on the East End. Hopefully, next year's National Poetry Month will be celebrated at the Horse Barn in Calverton.