“Payment After Publication” or “deferred payment” refers to the practice of paying all receipts for artwork after publication of the product in which the artwork will appear.
Pay dates range from days to months after the product hits store shelves.
The forging of such an agreement usually goes something like this.
Client: “I really enjoy your work and would like to commission you to produce illustrations for our next project.”
Artist: “ I’d be delighted! What are your terms?”
Client: “We pay X amount per page X days after publication…”
Artist: “ Well, I suppose…..”
I have worked with clients like this on a number of occasions and with varying outcomes.
In the best case scenario, the work is completed and publication follows in a timely fashion.
I’ve had clients with deferred payment schedules take only three months to write me a check.
The other scenarios are not so amenable.
Scenario 1 —— Welcome to the Team! The Team of Investors…
I allowed one client to defer payment for several books at once. They were paying more or less on time at the start of our relationship and all seemed to be going well.
I had my first regular client!
I was part of a stable of artists that would be getting steady work!
They were putting out exciting new material each month and I happily signed on for each project fully expecting payment on past books to arrive in its due time.
It never did.
The client went out of business owing many freelance artists considerable sums, including yours truly.
Were they evil?
No. The distributor had failed to pay them for their products and that, naturally, trickled down to us.
Though, I did not realize it at the time, I was an investor in the company.
I was assuming risk on the company’s behalf out of a desire to earn a meager page rate and nothing more.
Scenario 2—— “I will gladly pay you Tuesday for a hamburger today.” ( I just won’t tell you WHICH Tuesday…)
Too many of the contracts that I have worked under which call for deferred payment fail to stipulate a publication date.
It is all well and good to know that you will be paid 30-90 days after a product is published, but the contracts I encounter seem to never tell you the date that the clock starts ticking.
“The game will come out this summer…”, is not a publication date, but is about as detailed an answer as I might get at the start of a project.
One such product was available for sale at Gencon, but was not considered “published” according to the publisher.
I know. That left me scratching my balding head as well.
I waited a total of 9 months for payment on this project.
Under the terms of the contract, no interest was calculated nor charged to the client for this waiting period.
Scenario 3—— “Kill fee? Why? We didn’t kill the project. We POSTPONED it… indefinitely….”
Kill fees are no safety net for this type of agreement for the simple reason that publication can be postponed in perpetuity.
Several of my friends have the ghosts of postponed projects lingering in their studios.
You can hear their anguished cries in the night….
Even publishers with a long track record of timely publication and payment may have to postpone a project’s release date for any number of sound business reasons and that leaves artists standing out in the rain without an umbrella.
The worst case scenarios I outlined above have caused a great deal of hardship for the working freelancers that undertake deferred payment contracts.
They have forced me to look at this type of contract much more thoughtfully than ever before.
The realization I have come to in a moment of clarity is that providing interest-free loans to a client for an indefinite period is unsustainable for creatives such as myself for the following reasons:
1) They force me to accept risk on behalf of the client for no greater reward than a standard page rate.
I accept enough risk running my own art studio without having to essentially fund the projects of publishers as well.
Under such a contract, I am no longer a freelance artist.
I have become a strangely disenfranchised investor with no say in how my money is utilized nor when it will be repaid.
Nor do I receive further reward, if my risk proves profitable for my client ( short of being offered another project under the same terms).
2) My ability to work with a client becomes a matter of my own available funds—not theirs.
If I don’t have the money to lend and/or lose, then I can’t work with the client on their project.
I have had to cease working on a popular product line for this very reason!
I simply do not have the money they need.
3) I lose money.
When payment is deferred for several months, I must make up the funds not paid during that time by borrowing on a credit card.
I imagine many artists and business owners have to do similar things during such periods of poor cash flow.
Having a credit balance is not such a hardship when payment is made in 30 days from receipt of artwork.
However, when payment is deferred for several months ( say 5 or 6 months)---I am carrying that balance and its ever-growing interest rate.
That interest is not being charged to my client in turn.
I am now responsible for the interest rate on the loan I essentially gave to them free of charge and time restriction.
So, deferring my payment for "X" amount means, ultimately, that I will owe my own creditors that amount plus interest on the loan I must secure to keep food on the table and my studio doors open.
Join Jeremy next time as he discusses some solutions to this problem.
Jeremy McHugh is a freelance illustrator who has worked in the tabletop gaming industry since 2001.
He has worked on a wide variety of popular fantasy lines creating book interiors, covers, and card art.
He is also a Co-Host on The Ninja Mountain Podcast, a web radio program dedicated to the art and business of freelance illustration.
You can learn more about Jeremy and his work at his studio website located at www.mchughstudios.com