Friday, September 25, 2009

Profit and Loss

First, let me say that Profit and Loss would be a righteous name for a super hero duo. A sort of corporate-themed vigilante team. "We're here to help investors and creditors determine the past performance of their enterprise, predict future performance, assess the capability of generating future cash flows, and clean up the streets!" It would have sort of a Watchmen/Dark Knight feel to it.

Anyway, I believe I've mentioned costing as it relates to comics before in this blog, and I thought I might go into it in some more detail. This may only be of interest to those looking to get into comics. And maybe not even them. This will be a "how the sausage is made" type entry.

At any publisher, your project is going to go through the costing process before it is given the go ahead for publication. Or more likely, your project is going to go through the costing process and there it will die an unceremonious death mourned only by you and, if you're lucky, your editor. It's not a kind process and, given the current state of publishing and the economy, I can only imagine that it's become even uglier than I remember it. For the sake of example I am going to talking about my memories of the costing process at Dark Horse Comics. 1) Because I worked there in the editorial department for a time and 2) because I've had a book go through the process there myself.

Once you have convinced your editor that your idea for a comic is a good one (no mean feat and perhaps worthy of an entry of its own), your editor will take the idea to the Costing Committee. The Costing Committee is made up of a mix of senior editors, financial people, marketing and advertising. The editor will give to the Costing Committee any relevant material that you have given him: your pitch document, art, etc. And the first thing the Costing Committee does is have a Profit and Loss sheet (P&L) made up for your project.

This part of the process is sort of like magic to me, but the individual making up the P&L plugs lots of bits of data into a spread sheet. The creative cost, the parameters of which were discussed between you and your editor; the cost of producing a book of a given page count; whether the book is color or black and white; and etc. And all of these things are broken down into print runs of various size. This tells the costing committee, for example, that a color book that is 120-pages long with a print run of 5,000 copies will likely sell X number of copies in a year and so will ear Y number of dollars. If X and Y are high enough numbers, then your book will be published. In today's publishing climate, I'm guessing that X and Y being high enough is becoming increasingly rare.

I should mention some more about the creative costs and the the discussions that go on between you and your editor. Your editor is by no means an accountant, but he has a fairly good idea (or should) of what kinds of budgets he can get approved. And that budget figure is going to be different depending on if you are just starting out (a low figure) or are an established creator who's name on a project means a guaranteed level of profit (potentially quite high. And this discussion between the two of you should be a back and forth and you have to understand that when your editor will not give in to your every request, he is doing so not because it pleases him to disappoint you (at least that's not the only reason), but because he knows what sorts of budgets are being approved by the costing committee and how much chance of success your project has of going through at a given dollar amount.

You may wonder why I'm thinking so much about the costing process. I will be honest: it's not just for your education and edification, but because I have a book currently going through the process. Writing this entry is helping to remind myself that the process takes time and that there is, ultimately, nothing I can do to speed it along. I just have to hope that the numbers my editor and I (and my co-creators) agreed upon are ones the committee will find agreeable.

I'll keep you posted as the situation develops.

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