Only Talking Valuation…
Not What You Do With It…
I was not talking estates, or taxes, or Thor Power Tools… (Don’t ask.)
You need to at least begin to understand valuation before you get to estates, taxes, or selling your catalog of copyright.
So I was only talking about some basics of valuation. What you do with the valuation is up to you.
All catalogs, no matter the size, will have a valuation. I know early stage writers and publishers think none of this is important, just as they believe copyright is something to learn down the road.
And even more scary, even some long-term professional writers don’t understand the value of their own work. So they never deal with it or talk about it, and then when they die, their heirs are left with a mess.
And the valuation of any piece of copyright will change on a regular basis.
An example… I wrote the first book in the Cold Poker Gang like a decade ago. I put it in Smith’s Monthly and we published it without promotion. It sold a few copies a month. The value of that copyright would be fairly low at that point.
But as the years went by I wrote more Cold Poker Gang novels and stories, and we branded them, and the sales picked up a little per book. First book now worth more in valuation methods at that point in time.
Then around the 9th book the series exploded and went from selling a few copies per book a month to like 300 per month per book, eventually settling back to a few hundred per month per book. The copyright valuation for that first book really jumped and when combined with the entire series and branding and such, had a vastly increased valuation.
Same copyright, different factors.
Stayed level for four years, then I wrote more books and the overall sales numbers jumped again. And thus the valuation for that first book jumped again.
So early stage writers and publishers need to just keep writing, let things grow, and as your business grows, so does the valuation.
Again I am not talking taxes or estates or anything. What you do with the valuation of your catalog is up to you. But these posts have been about that first step in how you value your copyright.
Actually the first step is learning copyright. And how it works as a property that has value, no matter what you might think.
Interesting to note is that most people in the working world sell their catalog of IP on a daily basis.
That report you wrote for your boss last Friday? Copyright protected.
Those 3D models and technical drawings I made last year? Copyright protected.
Heck, even the post-it notes stuck to the edge of your monitor could be copyright protected…
All employment contracts I have ever seen have a clause that states that all IP created for work is owned by the company. So I’m effectively selling my copyrighted properties for a salary/wage.
I’ve actually seen some horrible contracts from the videogame industry online in which the company will even claim ownership of the hobby projects the videogame developers make. I hope the developers being offered such a contract renegotiate or walk away, I know I would.
Yup, and that is selling them. Exactly.
Yep, true. I was extremely pleased that my daughter’s art school (CIA) curriculum had a mandatory course on IP and basic contracts. It didn’t go very deep, but she walked out of it wild-eyed and asking all kinds of questions. I.e. awareness, along with “get a lawyer to look over your contracts.”
She’s in animation, and works for a small game development shop here in town, owned by a friend of the family. She made sure that hobby projects remain with her, and she’d said she’d rather keep working her gas old station job and commission art gigs than sign a contract “like that.” (Yes, I did feed her some information from this forum as well.)
Her patience paid off. I doubt most in her field are as lucky.
Would you -please?-
consider doing an audio of Magic Bakery?
Don’t I talk all the way through the videos? (grin)
We are getting closer to audio in some things.
I listen to both- but there are more times and places I can listen to audio- like while working outside, driving, and in places without Wi-Fi- which is most of my day.
I have all your currently recorded nonfiction, and most in print format, too.
Yet there something about audio v/s print:
Hearing you via your narrator is more ‘Boss’ and ‘kick-in-the-pants’ to my critical brain!
There’s another context in which having a defensible valuation matters:
Here’s an example from a house sale during/after bankruptcy (full description from my friend Bob Lawless at:
that is an easy extension to “well, since the house had to be valued in bankruptcy, wouldn’t an author’s/publisher’s IP portfolio, too?” Yes. Yes, it would. And the rationality of that valuation would flow through to every other aspect of the bankruptcy estate and proceeding. (See? You don’t even have to die to worry about an estate!)
And the relationship of that valuation to allowable exemptions (stuff the debtor gets to keep) is only the most obvious issue.
In my (unfortunately) extensive personal and professional experience, there are three kinds of attorneys who INVARIABLY screw up IP issues: family law (let’s just not go there… right, Mr Clancy?), bankruptcy, and trusts-and-estates. (I can back up that “invariably” with a statistically-significant 100% error rate, or rather could but for confidentiality and ongoing-litigation restrictions.) IMNSHO it’s malpractice — virtually never caught, let alone corrected or punished — for attorneys and other professionals like accountants to impose their own perspectives on IP valuation issues without at least talking to an IP professional. Authors need to insist on that consultation themselves, whether as the debtor or when caught up in a licensee’s bankruptcy proceeding.
Now you just hurt people’s heads, C.E. (grin). Yes, writers can’t declare bankruptcy unless they want to watch all their work be controlled by others, but we do get caught up in licensee’s bankruptcy. Used to happen in publishing alone all the time back in the 1980s before the big group hug publishers have done. (Consolidation). And writers, not knowing how to deal with it, got screwed beyond belief (in science fiction mostly by one editor who ran two publishing houses into bankruptcy alone before settling on a desk in the hallway at TOR books where the publisher there would not let him touch anything.)
What C.E. said is correct on all three areas, which is why Kris and I have on retainer one of the world’s best IP firms with offices all over the world including here in Las Vegas.
Dean, there are three kinds of creator-debtor situations in which the creator is not risking loss of control. But first, a caveat for those who somehow find this later:
This is not legal advice for your, or anyone else’s, situation. It is a general description of doctrine as of (very) early 2023. It is intended to at most encourage discussion with qualified counsel inside of attorney-client privilege. It is not an offer of counsel, representation, or more than mere commentary exactly as worthy of actual reliance as something you found scrawled in the margins of a library book.
In any event, three situations without significant loss-of-control risk, in general (but see the caveat above), include:
(1) A beginning-of-career creator with very little in-marketplace product to date. As a rule of thumb, less than a couple years actually earning income from three or fewer distinct market-baskets (a short-fiction collection in which the individual works — mostly against Dean’s advice! — are not individually available is one basket). A valuation would probably be considered too speculative by the bankruptcy court and Trustee, and the cost of administering the asset would be too high compared to its analyzed value. The creator-debtor can thus move (and there are deadlines) to have this property abandoned back to the creator as not providing a source of value to the creditors.
(2) A long-out-of-market creator who can show minimal income from those works during the preceding 90 days plus 5 years. (Don’t ask about that time calculation — you really don’t want to know.) Again, it’s the same principle: Any valuation would be too speculative and would require too much work to realize for the benefit of the creditors. This is a not-uncommon circumstance; consider a publisher that won’t revert because the work remains “in print” under a 1973 definition, but is making no effort to sell copies.
(3) The writer’s other assets are so substantial — but illiquid, so debts cannot be paid as they come due — or due to the “day job” the writer is eligible for a Chapter 13 (wage-earner, and they really mean wages and not self-employment income) plan, that will all creditors will be paid in full.
These are not made-up examples; naturally, I have obscured things, especially since I was consulted on one matter years afterward to ensure continuing compliance (and protect against an interloper’s claim). I’m reasonably sure that Dean and Kris are at least casual acquaintances of a type-3 person who did precisely that (other life circumstances led to the filing).
The real point here, though, is that bankruptcy proceedings are another place where valuation matters. In all three of those (real) instances, the bankruptcy court and Trustee rightly began from the best valuation available.
Thanks, C.E., that’s fantastic. I knew two writers who got into bankruptcy early on and the judge did exactly what C.E. said, ignored the writing as not being worth the time and the writer got the property (IP) back.
Bottom line folks, copyright is IP in which the “P” stands for property and thus all writers need to stay out of their own bankruptcies and get real help when some of their IP is tangled up in a licensee’s bankruptcy.
Again, thanks, C.E.