Videogame IP aside, manga, anime, and webtoons are perhaps the fastest-growing emerging form of underlying rights for live action film and TV adaptation. They often have all the hallmarks of valuable and sustainable franchise IP: high concepts, deep worlds, iconic characters, and big, engaged fanbases.
However, the deals can be complex, and multifaceted, with multiple business, legal, and cultural hurdles to overcome. They often take longer to close than a lot of more traditional deals.
Pryor Cashman is doing a lot of deals in this space at the moment, and here are the eight key learnings that have emerged:
1. Establish a Relationship
It's imperative at the outset of these deals to establish a relationship – on both the creative and BA/legal side. These companies will be entrusting the buyer with valuable IP, often with a significant preexisting fan base. Accordingly, trust and rapport are key.
I would not recommend sending any kind of proposal without one or two calls/Zooms minimum. On those calls, ask questions and seek to understand and address any concerns. Explain how you do business and envision how the relationship will work, while acknowledging that the rightsholder may have their own different but equally valid processes. A lot of this is predicated on finding common ground between disparate parties, which is why you should probably...
2. Engage a Cultural Facilitator
Engaging a consultant who can help facilitate the relationship can be enormously valuable – especially if that person has a preexisting relationship with the rightsholder. The person can be an attorney, agent, consultant, or executive producer. While there are usually people in major Asian media companies who speak excellent English, the facilitator may also speak the language natively. Their role is to help you "walk between worlds" (not dissimilar to doing deals with videogame companies).
Also note that while I have grouped webtoons, anime, and manga together for purposes of this article, it would be a big error to treat Japan, Korea, China, and other Asian territories as homogenous. Find someone who specializes in the specific territory.
3. Determine Which Rights You Actually Need
When doing these deals, you must remember that often these IPs are very established and hugely popular in their native expression. There are also often existing publishing and merchandising programs, videogame adaptations, and sometimes even preexisting live-action adaptations in the native language.
Even if they haven't yet exploited a particular subset of rights (e.g., games), that doesn't mean they'll be willing to grant you exclusive rights. Sending an all-rights, all-encompassing US-style rights deal may not go down very well. Be thoughtful about which rights you actually need, and be open to a split-rights scenario.
4. Build a Fair Structure
These rightsholders may be unfamiliar with US norms, but they are sophisticated nonetheless and will usually inquire as to what happens following a successful project – particularly with respect to potential spinoffs and sequels. They will usually not grant broad rights without corresponding payment for exploitation (or strong reversion protections, which may mean a "use it or lose it" type rolling reversion). Be accommodating to this concern and be prepared to address it.
Note also that bigger companies may have US affiliates or otherwise a desire to be true partners – in which event you're looking at a true co-production and not a rights acquisition. We've done several similar deals recently.
5. Chain of Title (Part I): Identify the Stakeholders
Chain of title for these properties can be complex. Anime, for example, is often produced, financed, and owned by multiparty consortiums instead of single entities. The original creators may have more approval (or "moral") rights than is customary in the United States. Sometimes there can be question marks as to what you're actually buying (e.g., the anime and source manga, or only the underlying manga). Ask the right questions early on.
6. Chain of Title (Part II): Decide What You Need
The other side of the coin is that rightsholders may not have all of the COT documentation that US buyers expect – and if they do, it often needs to be translated. You'll need to decide whether you are going to require comprehensive COT paperwork upfront or wait until the project becomes more "real."
Often, the answer will track expenditure – if you're going to hire a six-figure writer (as opposed to doing an if/come pitch), you'll usually want confidence in chain of title.
7. Keep the Paper Simple
This is key – often, sending a 60-page agreement will stall or kill the deal dead. Best practice is often to keep paperwork as simple as possible (I acquired a big Japanese games/comic series with a three-page document).
If you give these deals to a junior lawyer with limited experience and no discretion to be creative (read: getting what you absolutely need in an efficient manner), you're going to have a bad time. In the same way that it's very hard to do a game IP deal without experience of that world, it's naive to try to acquire an anime series in the same rigid way you'd acquire a US novel.
8. Be Patient and Flexible
This is critical. These deals take a long time, a lot of conversation, a lot of trust, and usually a lot of creative dealmaking. I once made an inquiry about a big anime series for a client and was told they'd let us know within 12 months if they wanted to engage (!). However, opportunity lies in hard things. Not every company is able (for various reasons) to do a deal with a Japanese, Korean, or Chinese company, or to acquire a manga, anime, or videogame. That presents a competitive advantage to those that can.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
