Pricing And Negotiating: Forbes Magazine Contract

by Bill Cramer, Wonderful Machine

Over the years, I’ve shot for lots of business magazines, but my favorite was always Forbes. The photo editors were experienced, smart, and nice. They appreciated good photography and they used it well. Not only did they have a reasonable contract, and decent budgets for assignments, but I was often able to generate additional revenue from those assignments by licensing the pictures to other publications or by selling article reprints to the subjects or their companies. However, with Forbes experiencing the same financial pressures that most print publications are facing, their contract has changed dramatically. (After several years on the market, Forbes Media announced recently that a group of investors has acquired a majority stake in the company.)

In an effort to save money on assignment photography (or even make money on it), Forbes has created The Forbes Photography Collection to license pictures generated from their assignments through Corbis Images. They hired Robyn Selman, formerly of Corbis, to guide that process as their Director of Photography. Forbes Media isn’t the first publisher to syndicate their photographers’ pictures (Condé Nast comes to mind), but still, it’s a dramatic shift from the way most magazines and photographers have historically done business with each other.

In a nutshell, here’s how their new contract differs from their old one:

Instead of photographers getting compensated separately for residual use of their photos (including space, foreign Forbes editions, and article reprints), those rights are bundled into a flat shoot fee, and the photographer gets a maximum of 12.5% of third party sales through The Forbes Photography Collection. (The contract specifies that the photographer gets 25% of Forbes’ half of the gross fee when Corbis is the only agent involved in the sale. If another agent gets involved in the sale, the share to the photographer could be less than 12.5%.) From what I gather, the shoot fees are 1000.00 or more (plus expenses) now, as opposed to 700.00/day (plus expenses) against space with their previous contract. It’s hard to compare flat fees to day rate vs. space, but my own experience was that my Forbes assignments frequently generated space rate payments. So while the fees and expenses for the initial shoot may be about the same, photographers are giving up significant money (not to mention control), on foreign editions, article reprints (which are often worth more than the original assignment), and stock sales to the subject and to other magazines.

The flat shoot fee is negotiated for each assignment. In the past, photographers and the magazine would renegotiate day rates and space rates every couple of years (as a practical matter, the magazine would simply have standard day and space rates that they would pay). With this contract, Forbes no longer ties the fees directly to the amount of time it takes to shoot the job or the size/number of photos that appear in the magazine. That’s problematic in several important ways. First, if the value of the assignment isn’t tied to the amount of time it takes to shoot the job or the space the pictures occupy in the magazine, then what will be the basis of that negotiation? Second, putting the photographer and the photo editor in the awkward position of renegotiating the fee for every assignment wastes valuable time and energy at exactly the moment when you need to get a job done fast, and it sets up a regular source of conflict that will have the effect of eroding rather than building and streamlining the relationship between contributor and editor. Third, it creates a conflict of interest between the photographer and the client. It’s natural and sustainable to put the photographer’s economic interests in line with the client’s. Lastly, anyone growing a business (even a freelance photographer), needs to build equity along with revenue. For photographers, the rights to their photographs are their main source of equity.

I can understand Forbes Media’s impulse to capture this additional revenue in the short-term. But is it in their long-term interest?

I’m not sure it’s sensible for Forbes to enter into the business of syndicating photographs. For starters, it’s clearly outside their area of expertise. Though there is a modest amount of residual value to the photos for Forbes, I wonder how much of it is negated by the administrative costs of starting up and maintaining the infrastructure required to support those sales, and the additional up-front fees they have to pay the photographers. Also, the minuscule back-end split they’re offering photographers not only removes any incentive for them to produce lots of excellent photos (which would otherwise earn those photographers space rates and other residual fees), but they’re also making it less attractive for good photographers to work with Forbes in the first place. So the photos they’ll end up with won’t look as good in the magazine and they won’t have as much residual value as they otherwise would. A smarter approach would be to maintain the day vs. space fee structure, and simply lower or raise the fees as their ability to afford high-quality photography shrinks and grows. (Another approach might be to maintain a higher fee structure, and increase or decrease the number of hand-out and stock photos that they use, as their budgets ebb and flow.) Either way, it’s naive to think that you can reduce the compensation to photographers without adversely affecting the quality of their photos.

Here’s the contract. It’s separated into an Artists’ Agreement (which gets signed once), and a Schedule A (which gets signed for each assignment):

1_forbes_contract_four_up

If you are a photographer (or a magazine), and need help building an estimate or reviewing a contract, please feel free to contact any of our producers. If you’d like to read more of our Pricing & Negotiating articles, you can find them here.

Wonderful Machine

There Are 8 Comments On This Article.

  1. Real SIMPLE!
    Don’t sing there sh|ty contract and don’t work with a company that wants to screw photographers.

    The quality if their publications will go down,
    their circulation will continue to go down,
    and they’ll be forced to pay for quality.

    that is unless photographers that are little puszy boys are willing to take what they can get rather than growing a pair of b@llz.

    • Actually, they’ll just shut down or subsist with a minor diminished existence. Look at Life and Newsweek.

      If you think the cuts are bad for photographers, you should see the cuts that happen on the editorial side. Overwork, people asked to do the job that 4 people would once do, middling pay, rapid turnover.

      Many magazines are screwed by declining interest. It’s unlikely that most of the current big names will be able to reverse that.

  2. I mean… $1,000 day rate (plus expenses) is still pretty respectable. I think what’s going to happen is the younger, hungrier, cream of the crop is going to start filling those rosters. It feels like Forbes might be molting their old talent. The syndication restriction is pretty weird, though and this partnership with Corbis sounds a little too attractive to other “bottom-line” oriented publications.

    • While I don’t think that’s the intent (molting), that’s the result. Many people will get tired of working for those rates before their 10th year of business, or mid-30s, whichever comes first.

      Although I enjoy doing editorial work creatively and working with the people there, from a purely business standpoint editorial work is a loss leader. I can put it on the blog and use it promotionally toward advertising clients. I can’t always put the work in the book though, the rates are usually too low to have outstanding production values, unless I totally eat the cost of that myself.

  3. Forbes want me to shoot a cover for them in China for lower than USD100(include all), I know it may be a good reference for me, but I refuse to do it.

  4. just so the kids on my lawn know what they are missing, the backend sales are where corporate photography gets interesting, you go to some random Arkansas town in the middle of summer when it’s pretty much unlivable outside, you hire the rental car, drag your dog and pony show out to a corporate office park and setup (am I making this sound delightful?) you do your pictures for the magazine and you do some safeties, portraits on white or a neutral background. You get the business card of the PR contact at the firm. Always. Later after the story runs you sell the portrait back to the firm for real dollars.
    This contract does not seem to preclude that however they want you to get permission from them to sell your own work. Its crazy.
    Oh and yes 1000 is “respectable” if its 1999. Do your CODB and you will find likely a minimum of 1500 a day is what it takes to keep the doors open. Not to mention that the contract wants your RAW’s, expects your digital cap fee to be “included in the rate” and also expects photographers not rent out their kit as has become the norm.
    To accept this you’d have to line out most of the contract.

  5. Markthetog

    I am hardly surprised by this practice. The print world is in very dire straits and the only advice they will get from accountants and other “management” gurus is to cut costs.
    Forbes always struck me as a family publication that, despite its cheerleading for Wall St., never practiced what Wall St. preached and was a good place to work. Apparently the new stakeholders are cutting the arms and legs off the patient to save him.