Imaging leasing?

My company is redecorating our office and wants to have a more "Colorado" feel in the artwork. Our CEO approached me last week about using about 20-30 of my images in sizes from 8x12 to 20x30 for various places in our office and conference rooms. I was excited about the opportunity and said I would bring in my portfolio for him to review. Since he travels quite a bit it took a week to get a time we could meet again.

On the second meeting it turned out that what he would really like to do is lease the images for a 5 year period, after which the images would be mine again. He offered to pay for the cost of materials for all the images, but didn't want to purchase them outright. So, this essentially amounts to getting to use my images for no cost over a 5 year period. This wasn't sounding so good any more, even though I would retain ownership of the printed pieces. I probably wouldn't get a lot of extra purchases (i.e. advertising) from the placement in the office, but we do get clients in from time to time that may take a notice, although I'm not sure it would amount to much.

So, I guess I'm wondering if I am just over reacting to this development or not. Do you think this is still a good opportunity or should I ask for some type of payment in the lease terms. Say 50% of the normal purchase price? Should I ask for the payment up front or have it divided equally over the 5 year period? I'm not even sure I will be with the company that long and will probaby have to make sure the terms also incorporate me leaving the company earlier than the 5 year term.

What do you all think? Do it or not?

Craig

Hi Craig,

Since your CEO wants to do a lease, I think I would approach this like any other lease agreement such as a car or an apartment. Considering this as a car instead of a bunch of images, your CEO is offering to buy the raw materials, use the car for five years and then give it back to you. I don't see where there is any profit for you except for publicity.

I would look for a lawyer or legal aid organization to help me put together a lease agreement and then negotiate price and terms with the CEO. Make sure you get something out of the deal. I don't know anything about your job, company, or CEO but I think if you take a business-like approach you may earn a lot of respect from the CEO. That could be more valuable in the long run.

Cheers,

Well, I've generated lots of sales from pictures that I have just hung in my office for my own personal viewing pleasure. Having someone pay to frame 20-30 images that you get to keep is worth considering, especially if the framing is top quality. Does the offer include paying for frameshop labor, or are you expected to do that yourself at no charge?

I agree with Bill to a point.

Personally, I would not want to take on the cost of profesional framing and printing for 20-30 images, then get reimbursed for the cost over the next five years. I don't think this is a sound proposal and it would really cost you alot of money up front to make this work. You also need to make at least some profit out of the lease to cover the cost of artwork that will be damaged and unsaleable upon the completion of the lease. And I think you really should be making at least a little profit from this arrangement. Have you ever dealt with an office leasing company? They might have artwork for lease and I think it would be worth talking with them to see what they charge.

Mel-

Man, this is a tough one. You don't want to be taken advantage of, but you also don't want to create a rift between you and the guy who signs your checks. Bill's words of wisdom aside, the idea of "leasing" framed prints sounds silly to me. You have something he wants, he should just buy them outright. In five years of productive photography, you will likely have moved on from the images he choses, leaving you with a print inventory that will be collecting dust, unless you already have a print sales component to your photography skills. I'd offer him a deal where he pays for the prints and framing, plus x-amount over and above to satisfy your need to generate money from your work. Let's face it, if you do this deal in a way you're not happy with, you'll have 20-30 constant reminders every time you walk in the office.

I should add that I, too, have prints up at a few offices in Colorado Springs, and to date, not one supplemental sale.

To Mark's point, if your CEO is really expecting you to finance the project, then get repaid over a 5-yr period only to the point of covering the initial material costs, he's must not have much respect for your work or your business skills. Ask him how many business deals he's closed that included no profit for his company.... Even though you get the prints back after 5 years, now you have to find buyers for them to make any profit at all.

I'd counter with a reasonable proposal that allows for a 'lease' type of arrangement, but also pays you a reasonable amount for your work, in addition to time and material costs. Typically, long-term leases are structured such that the sum of the payments exceeds the outright purchase price. If you felt inclined, you could agree to structure lease payments that equal your typical selling price, or whatever price you feel is appropriate given your relationship to the company. I'd be reluctant to go for 5 years unless it's a formal contract that they are obligated to fulfill even if you leave the company. I'd also ask for a certain % up front to help cover your purchase of materials.

I personally wouldn't worry about losing out on this opportunity; I can't imagine anyone anywhere agreeing to those terms. A resonable counter-offer should get you the deal, and some fair compensation for your work.

Craig, maybe you can clarify. Both Rick and Todd understand that you would outlay cash for printing and framing which would be repaid over five years. I understood that you would not outlay ANY cash. All materials are paid for upfront and you would get the framed pictures back after 5 years. You get advertising and 20-30 nicely framed prints at no cost to you. As Todd noted, neither of those might be worth much to you. In that case, the decision is easy.

Thanks for being a great sounding board guys. I think the comments by Mark, Todd, Rick and Mel ring pretty true with how I feel about this situation. Bill, I also saw your side of the argument, but feel five years is too long, but perhaps he may go for a year lease. That time frame would be much easier for me to swallow free use on; at which point I could reuse the images in our own house or give as gifts to friends and family. I don't have a sales component to my photography at the moment, so I don't think a resale would be a possibility.

I think what my CEO thought was my photography was just a hobby and I'd jump at the chance to just display my photos, thus an inexpensive way to redo the office. But this hobby is expensive, and any way of helping pay for it is welcomed. I think with the effort I put into my images and the time it takes to get anything that you really like is worth something.

I think I will counter-offer with something more reasonable and let him decide if that is something we can both live with.

Thanks again, Craig

Hmmm.... I'm with Bill on this one. I'd sell prints to another office of course, but at my place of business, I would take this deal. Assuming, of course, that Bill is correct and your boss is paying 100% of the cost of making these prints up front. As mentioned above, you get 20-30 framed prints at your place of business, at no cost to you, and you get them back after a few years.

Keep in mind that the cost of making the print should include some amount for your time, not just materials. Maybe you can consider that profit.

Even if I was to sell images to my boss outright, I'd probably give him some kind of "friends and family" discount anyway, so in the end, the difference in cost between selling-outright-with-a-discount and leasing-for-the-price-of-time-and-materials probably wouldn't be that different.

Does the cost of materials include a brand new 44" printer to make your prints???

I'm skeptical about doing something for nothing. I always think in terms of time... it takes a lot of work to prepare, print, frame 20-30 prints (nevermind the effort to take the photos). Is this worth your time and effort?

But, if you are assured of making all your money back + 20-30 of your own prints (basically for free) then that would be a very tempting proposition for me.

Either way, it would be a hell of lot cooler of your boss to just pay you a fair price for your prints.

I should have clarified this earlier when Bill asked about paying for materials. He would be for the prints only. If I want them professionally framed that would be paid for by me. He mentioned that he would like to have the prints sized to fit frames we already have in the office. This is another reason I don't really like the proposition because while the frames are functional, they definitely are not in the "professional quality" department and wouldn't really show the prints off to their full potential and I don't think I would take them at the end of the lease either.

Brent, I think you are right about the discounting, I wouldn't charge full price, but I don't want to essentially give them away for free either.

Jack, I like how you think about the printing

As they say, time is money and we all spend an exorbitant amount of time on our images and that needs to be fairly compensated for. The time I spend on my hobby is time I can't spend with my family and while I love photography I also love spending time with my two children; it's a constant balancing act.

Craig

Craig, with that clarification of payment for prints only, I would certainly decline this "lease" offer. No brainer! I'm sure your time would be far better spent with the family.

In addition to figuring out your immediate time costs, also be sure to consider the time value of money (of the print assets) when you do your lease calculations. I don’t mean to insult anyone with my finance 101 suggestions, but you’d be surprised at how many people never consider this. If you decide to do the lease, you might set it up as a 5-year, end of year annuity with a yield to maturity of 4.78% (5-year T-Bill rate) + a risk premium for the firm. Or, if you can find out the firm’s cost of debt, you could use this discount rate. Do you work for a publicly traded company? You could also integrate a partial payback at maturity for the value of the print assets. From a financial standpoint (feelings and impressions aside), it is very easy to figure out how much $ you would make/lose on this deal. Take all of your estimated revenues and costs (in their respective time periods), and calculate the present value of each. Without knowing your actual #’s, it’s hard for me to make a recommendation. If I were you, I would create a lease structure that allowed you to make a decent profit on the deal and then present it.You could also present multiple scenarios that essentially amount to the same present value and then let him/her choose one. If you need help with financial models/calculations, let me know.

Once again, I'm with Bill. Paying for prints-only, in possibly sub-standard frames, isn't really a good deal. Depending on the existing frames, after 5 years, you'll probably get prints back which have been faded from UV-exposure, since the existing frames may or may not have UV-resistant glass.

I'd forget about it. Not worth the trouble.