How to Have Restrictive Contracts and Still Be “The Good Guys”

Posted on Categories Intellectual Property Law, Legal Practice, Negotiation, Public, Student Contributor

Cover of Adventure Zone graphic novelJustin, Travis, and Griffin McElroy have built a podcast empire on being wholesome good guys. They come off to their fans as three brothers who are down-to-Earth, goofy, and will never do anything to hurt people. This has connected with podcast listeners worldwide, helping them build a massive fan base.

But at some point, businesspeople and celebrities make mistakes. For the McElroys, this mistake has come in the form of them trying to find ways to make money off the success of their podcasts. Prior to 2018, the McElroys had sold merch for their podcasts, gone on tours to do live recordings of podcasts, and had a brief TV adaptation of the podcast “My Brother, My Brother and Me” on the failed streaming platform Seeso, which was owned by NBCUniversal.

Then came the graphic novel adaptation of “The Adventure Zone,” which shot to the top of the New York Times bestseller’s list. The graphic novel, while illustrated by Casey Pietsch, features a gallery of fan art at the back of every volume. Given the relationship the McElroys have with their fans, it seems reasonable they would pay tribute to the fans and the artwork they create by including a gallery of artwork tied to the events of that volume.

This fan art gallery has become the center of a bit of controversy in recent weeks. On August 31, artist Jonah Baumann posted a tweet about being poorly compensated and barred for three years from sharing an illustration for a New York Times bestseller, but did not specifically name the book. Later that day, artist Ioana Mursean retweeted Baumann and revealed that it was the graphic novel adaptation of “The Adventure Zone.” Baumann contributed a piece to the first volume of the graphic novel.

There are two jarring facts regarding the treatment of artists who worked on the fan art gallery: they were only compensated $100 for the full-page illustrations and the contract barred them from being able to share the artwork for three years in a forum outside of the graphic novel. To be paid $100 for a full-color, full-page piece of art in a book published by a subsidiary of one of the largest publishers in the English language is insulting, and to then be told you cannot include the artwork in a portfolio or on your website is bizarre. For some artists, this could have been their “big break” and to say they were included in something this notable could bring in more clients.

These types of restrictions are not particularly novel. When there are exclusivity clauses, they may be regarding someone being the sole provider of something, such as in Ilan-Gat Engineers, Ltd. v. Shelter Systems Corp., 879 F.Supp. 416 (D.N.J. 1994). The artists who provided work for the graphic novel do not appear to have signed contracts that make them the sole artists for the “gallery” at the back of the graphic novel, nor is it a deal to have them go on to create artwork for other First Second graphic novels, similar to how some deals function in Hollywood. People wanting to back out of those contracts have notably been tackled in cases such as Metro-Goldwyn-Mayer, Inc. v. Scheider, 360 N.E.2d 930, 40 N.Y.2d 1069 (N.Y. 1976).

But this restriction could serve a good purpose. While the McElroys claim to have ignorance as to what was occurring with the contracts and payment for artists for the graphic novel, I wrote in my paper “You Must Roll 18 or Higher in Order for Your Claims to Succeed: Common Law Trademarks, Unauthorized Merchandise, and the Podcast ‘The Adventure Zone’” about how the McElroys at least give off the impression of seeking to maintain control over their creation. If First Second can control how the artists use the artwork, that prevents them from possibly having competing items, especially since the artists were paid a measly sum.

However, this is a scenario where public policy would likely win out. The artists sold their work to the publisher, who used it, and paid them. Since there was a contract, First Second could have dictated how the art could be used (i.e. not sold on artist websites). However, a publisher told artists the artwork could not be used in any venue outside of the book for three years. This length seems likely to cause a lot of harm because, as mentioned earlier, it prevents artists from including this artwork in a portfolio of their work to secure future work. It would ultimately be up to a judge to decide if this unduly burdensome, but given how courts have previously ruled regarding restrictive clauses that are one year or one-and-a-half years shorter than this, it would likely be struck down.

However, it seems there will not be a court battle over this to modify the contract. It appears both the McElroys and First Second are coming together to modify the existing contracts and ensure the future contracts will be more equitable.

To someone not aware of the fan response, it would seem all of this would hurt the McElroys as this is a graphic novel they had a hand in producing and the copyright has been assigned to them. On September 3, they put out a statement saying they were paying artists an additional $500 out of pocket, as well as mentioning they were working with First Second regarding the restrictive contracts. The statement also said they were working with another artist who had created artwork for merchandise to ensure they were properly compensated, emphasizing the current platform for selling merchandise allows them more control over agreements with artists. It seems the McElroys do focus on trying to control artist compensation and merchandise logistics, which is ultimately one of the ways they protect their brand.

This begs the question as to how on Earth they allowed this to happen given their protective nature with their creation. It does not make sense how a group of men who have said they do not appreciate artists making money off of fan art of their podcasts without their permission and have stated they have more control over a revenue stream right now did not pay attention to this. It seems like when negotiating a contract with First Second there was not a discussion as to how artists for the fan art gallery would be compensated. It is possible that, given timelines in the publishing industry, this was not an issue on their minds. Both the present merchandise store and the first volume of the graphic novel launched at about the same time in 2018, and the McElroys are now a type of celebrity that must also navigate a tricky business aspect.

But ultimately, through inaction, the McElroys helped ensure artists, some who are Black, people of color, or transgender, were compensated poorly and placed in restrictive contracts. These are artists who have helped contribute to the success of the McElroys and were taken advantage of by the publisher. The McElroy brothers, all of whom are straight white men, helped perpetuate systemic inequality in the publishing industry. As Mursean insightfully tweeted, “to be clear, when the publisher of such a popular IP makes these predatory contracts, you as the creator of the IP have . . . responsibility to make sure that the writers and artists working under you are paid a fair price.” If the McElroys claim to be committed to doing this in other avenues, why was nothing done about the graphic novel until Baumann and Mursean sounded the alarm?

To the fans, all that matters is the McElroys fixing this. At the end of the day, they listen to the McElroys shifting blame to the publisher and the previous merchandise store. Some absolve them of wrongdoing, while others treat them as Ubermenschen who can do no wrong. Many fans believe that ultimately the publisher is at fault or that the real “bad guys” are Baumann and Mursean. To fans, they are merely trying to make the McElroys seem like as though they are “less woke” than they really are. God forbid the McElroys are human and made a mistake that needed to be corrected, which happened after Baumann and Mursean publicly spoke about it. Had those two artists not spoken up, would the contracts for the graphic novel have remained in place? This thought does not seem to appear to many fans because, again, the beloved podcast hosts are Ubermenschen.

This is an attitude constant throughout podcast fandoms. Rumors of harassment from fans of a popular leftist podcast? That is just people on the far right trying to smear the podcast. The podcast Crime Junkie can be accused of plagiarism but takes down the episodes and then goes on to book a performance at the Riverside (which was cancelled due to the COVID-19 pandemic). Even when podcast hosts do something particularly bad, actions tend to be taken only by the podcast distributors. Fans of podcasts will still find a way to excuse the horrible behavior of a host. The host is just misunderstood, or, worse, the host is doing something so great with their podcast you can overlook what they did.

Here, the McElroys opened their purse and blamed their publisher. Publishers may be sneaky, but for hosts so devoted to protecting their brand that you can write an entire paper on it, they clearly took their eyes off the ball. That does not matter to the fans. If you fix the mistake after being criticized and pass off the blame, you will remain the white knight.

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