legallicensingnegotiation

How to Protect Your Rights When an Agency or Studio Expresses Interest in Your IP

ddigitalart

2026-02-16

10 min read

Practical negotiation tips for creators approached by agencies/studios—what rights to keep, red flags in term sheets, and option-agreement fixes.

When an agency or studio like WME or Vice calls: protect your IP before you celebrate

One of the best problems a digital creator can have is being approached by a major agency or studio. But excitement can quickly turn into regret if you sign away core rights in a first conversation. In 2026 we’re seeing more agencies and studios—WME signing The Orangery (Jan 2026) and Vice rebuilding as a production studio—actively hunting creator-owned IP across comics, animation, and digital art. That means huge opportunity, but also bigger risk. This guide gives practical, negotiable steps and scripts you can use the moment studio interest becomes real.

Quick takeaways — act before enthusiasm costs you

Never sign a term sheet or option agreement without a lawyer experienced in entertainment IP.
Keep copyright and ownership of the underlying work whenever you can; license only what's necessary.
Identify and limit three things: scope (what rights), time (how long), and territory (where).
Watch for red flags: “all rights,” “perpetual,” “work for hire,” and vague profit/accounting language.
Turn offers into leverage with reversion clauses, approval rights, and clear compensation + audit rights.

Context: why 2025–26 matters for IP-hungry studios and agencies

Late 2025 and early 2026 saw major signals that traditional agencies and publishers are moving from representation into production and IP consolidation. WME signing The Orangery (Jan 2026) and Vice retooling its executive bench to behave more like a studio are not isolated events — they signal a bigger trend: agencies-studios want creator-owned IP they can adapt across streaming, gaming, merchandising, and immersive experiences. For creators this means better access to budget but also much stronger asks from the buyer side.

First 48 hours checklist when you get an outreach

Get the outreach in writing. Ask for a short email summarizing their interest and how they want to proceed.
Do not transfer files or original high-res assets without an NDA or marked “review copy” watermark.
Ask who in the organization will handle negotiations (agent, executive, business affairs?).
Tell them you’ll need to review any term sheet and request a draft for review. Buy time—don’t commit on the phone.
Contact an entertainment-focused IP attorney and send the term sheet; if you don’t have one, ask the agency for a reasonable window to retain counsel (typ. 7–14 days).

Key rights to try to retain (and why)

When studios ask for rights, they’ll aim for flexibility. Your job is to preserve the valuable parts of your IP while granting only what’s necessary to close the deal.

1. Copyright (ownership of the original work)

Why retain: copyright owners control future exploitation, sequels, publishing, and licensing for merchandise.

Negotiation tip: grant a limited license or an option to purchase rather than an assignment. If forced to assign, secure reversion and buy-back clauses.

2. Sequels, prequels, and derivative works

Why retain: sequels and franchises are where long-term revenue lives. If you give these away now, you’ll lose future income streams.

Ask for: a carveout for future works by the creator or a revenue-share on sequels/adaptations created by the studio.

3. Merchandising, consumer products, and NFTs

Why retain: physical and digital merchandising can out-earn an initial adaptation fee. New markets like NFTs and virtual merchandise (2024–26 growth) are lucrative.

Negotiate: separate merchandising terms with defined revenue splits and approval rights. Keep digital asset rights unless the studio pays a premium.

4. Publishing and print rights

If you’re a comic or graphic novelist, reserve publishing and print serial rights for the original medium unless the deal explicitly covers publishing.

5. Moral and credit rights

Always secure on-screen credit and moral rights protections (no derogatory treatment). Credit has long-term brand value.

Option agreements — structure them to protect you

Studios often start with an option agreement: they pay to reserve the ability to buy the IP within a period. A poorly structured option is a way to lock you out while they shop your work.

What a fair option should include

Option fee: real money (not $0–$1). Market depends on profile; insist on a fair, non-trivial fee and a defined purchase price (or formula).
Option period: keep it short (6–12 months) with a fixed number of extensions tied to measurable milestones and incremental fees.
Scope limited: the option should specify which rights are in play—film, TV, games—do not grant “all rights” by default.
Exclusive vs. non-exclusive: insist on non-exclusive unless the fee and purchase price reflect exclusivity.
Turnaround and kill fees: if the studio declines, ensure you get a reversion of rights and a documented decline (kill fee if applicable).

Red flags in term sheets and what to do about them

Term sheets are negotiation roadmaps. Watch for these red flags and use the suggested fixes.

Red flag: “All rights, worldwide, perpetual”

Why it’s bad: it removes your ability to monetize the IP later. Ask to limit rights by medium, territory, and time. Replace “perpetual” with a fixed term + reversion on non-use.

Red flag: “Work for hire” or immediate copyright assignment

Why it’s bad: you lose copyright. Fix: insist on a license or an option to acquire copyright at a defined purchase price with reversion on non-production.

Red flag: vague financial terms and undefined profit participation

Why it’s bad: studios use accounting to minimize payouts. Ask for gross participation where possible; define net profit definitions clearly and include audit rights.

Red flag: broad indemnities and no limits

Why it’s bad: you could be liable for costs beyond your control. Counter with reasonable carveouts: indemnify only for willful infringement and not for studio changes or third-party claims unrelated to your work.

Red flag: assignment rights to affiliates or successors

Why it’s bad: your IP could be flipped to a third party without recourse. Ask for notice and consent (or a payment) on assignment, and reversion if assigned to an unrelated party.

Agent relationships — how to preserve control and value

Agents (and agencies like WME) can be powerful allies — they open doors and negotiate better terms. But agency involvement also changes dynamics when they move into production or take equity stakes.

Red flags from agents

Agent requesting ownership of IP or options as part of representation.
Commission structures that take equity in lieu of fees without clear valuation.
Agent’s dual role: representing you while also advising a studio with conflicting interests.

Best practices

Get representation agreements in writing with specific commission rates and a sunset clause if you stop working together.
Insist the agent disclose conflicts and abstain from negotiating deals where they have a stake unless you consent.
Use the agent’s relationships for leverage, but insist on legal review of all offers.

Sample clauses and language to ask for (copy-paste friendly)

These are starting points—always have your lawyer adapt them.

Limited License: “Licensor grants Licensee a non-exclusive, limited license to adapt the Work into a [specified medium] in [specified territory] for a term of [X] years, after which all rights revert to Licensor unless Licensee has commenced principal photography or published the adapted Work.”
Option: “Licensee pays an option fee of $[amount] for an exclusive option for [6] months to negotiate a definitive agreement. Option extensions may be granted only upon payment of $[amount] per month and written justification of progress.”
Reversion-on-Non-Use: “If, within [24] months after execution of the Purchase Agreement, Licensee has not commenced principal photography or publishing activities, all granted rights revert to Licensor.”
Audit & Accounting: “Licensor shall have the right to audit Licensee’s accounting records relating to revenues from the Work once per year upon 30 days’ notice.”

Negotiation scripts — say this on the call

Use plain, professional language. Here are three short lines that work in real conversations.

“I’m excited—this sounds promising. I’ll need a written term sheet and 10 business days to have counsel review before we proceed.”
“We’re open to an option, but we’ll need a market option fee and a six-month term with one paid extension only.”
“We can consider a film/TV license, but we’ll need to retain publishing and merchandising rights or negotiate a separate, paid license for those.”

Money matters — how to structure compensation

Compensation should reflect both near-term risk and long-term upside.

Common components

Option fee: non-refundable but credited to purchase price.
Purchase price / acquisition fee: defined in the agreement or determined by a formula tied to budget or revenue milestones.
Upfront fee for license: paid at signing of the production/publishing deal.
Backend / royalties: percentage of gross where possible; if net, define the accounting and include audit rights.
Bonuses / escalators: milestone payments for greenlight, release, box-office tiers, or streaming view thresholds.

If negotiations stall — alternatives and plan B

Not every studio deal is the right deal. If they insist on draconian terms, consider:

Non-exclusive licensing to multiple partners to keep options open.
Self-producing on a smaller scale or partnering with an indie producer who accepts a fair split.
Retaining certain formats (print, comics, web) while licensing audiovisual rights.
Using the studio’s interest to solicit multiple offers; create a competitive bidding process.

Case study: a smart reversion saved a creator’s franchise (2025 example)

In late 2025 an independent graphic novelist licensed TV development rights to a mid-size studio for an 18-month option fee. The contract included a strong reversion clause: if no pilot was greenlit within 18 months, rights reverted. The studio shuffled the project internally and failed to produce. The creator re-pitched to a streamer, and secured a better license deal with a larger backend and merchandising share. The lesson: reversion works.

Final checklist before you sign

Have an entertainment/IP lawyer review the full term sheet and agreements.
Confirm ownership/copyright status of all underlying assets and collaborators’ signoffs.
Verify the scope, time, territory, and exclusivity are narrowly written.
Negotiate reversion on non-use, audit rights, credit, moral rights, and merchandising carveouts.
Get all promises in writing; verbal assurances are not binding.

“Treat every first pass term sheet as the starting point for negotiation, not the final offer.”

Where to find help in 2026

Look for entertainment attorneys who have recent experience with agencies and studios that switched into production in 2024–2026. Industry trade outlets like Variety and The Hollywood Reporter are good for tracking which players (WME, Vice, emergent transmedia studios) are actively acquiring IP. If you have a manager or agent, confirm their experience handling option and purchase deals with those exact companies.

Closing: protect the future of your work

When big names call, the exciting possibility of a TV show, movie, or large-scale licensing deal can feel like validation—and it is. But validation without protection can cost you the future value of your IP. Use the early conversations to set boundaries: small, specific licenses, fair option fees, short and paid option periods, and reversion on non-use. Retain the rights where the long-term economics live (sequels, merchandising, publishing) and demand transparency in accounting and approvals.

Want a ready-made negotiation checklist and sample clauses you can adapt? Download our 2026 Creator IP Negotiation Pack and get a one-page term-sheet red-flag cheat sheet tailored for digital artists. If you’re facing a live offer, reach out for a template review — we’ll show you exactly what to say in your next call.

Act now: keep control of your IP and turn that agency or studio interest into a long-term win—not a one-time giveaway.

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Senior editor and content strategist. Writing about technology, design, and the future of digital media. Follow along for deep dives into the industry's moving parts.