It remains one of the most watched and followed comic book legal battles in recent times - the superstar writer, Neil Gaiman , versus the superstar artist, Todd McFarlane . The case began in 2002 and it would take ten years and change, a bankruptcy, a Marvel Comics backed Gaiman and countless hours of court time before it was resolved. In short, Gaiman took McFarlane to task over two characters, Angela and Medieval Spawn, and won. Along the way another character reared it's head, and this character would prove to be the most important - Miracleman





Along the way depositions were taken and re-taken. Two court cases happened, each time Gaiman came out on top. McFarlane eventually paid Gaiman a reported $1,100,000 in costs Marvel Comics ended up with Miracleman , and the rights to finally reprint the long out of print stories by someone called 'Original Writer' (Alan Moore to you and me) and the many artists. Also part of the deal was the understanding that Gaiman would finally finish the Miracleman story that he'd begun, with Mark Buckingham, decades ago. Let's hope it lives up the hype that has surrounded it for so long.





Regular readers of this blog will know that I've been following the Gaiman/McFarlane fight for a number of years now, and have posted many of the depositions (including Todd McFarlanes ) so you can understand my joy when Neil Gaiman's 2002 deposition in the case finally found its way to me. Within this lengthy document you will discover things that you might already know, but then you may well discover things that you never even considered. It's entertaining, to say the least.





I'm also presenting some Gaiman/McFarlane documents for your viewing pleasure, including Gaiman's Eclipse deal for Miracleman, along with the now legendary fax exchange between the two men. It's a long post, but well worth the effort.





Read, and enjoy!









IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF WISCONSIN

NEIL GAIMAN, a resident of Wisconsin,

and MARVELS AND MIRACLES, LLC, a Wisconsin Limited Liability Company,

Plaintiffs,

vs. Case No. 02-C-0048-S

TODD McFARLANE, a resident of Arizona,

TODD McFARLANE PRODUCTIONS, INC., an Arizona corporation,

TMP INTERNATIONAL, INC., a Michigan corporation,

McFARLANE WORLDWIDE, INC., a Michigan corporation,

and IMAGE COMICS, INC., a California corporation,

Defendants.

Deposition of: NEIL RICHARD GAIMAN

Date: Monday, June 24, 2002





DEPOSITION of NEIL RICHARD GAIMAN, a witness of lawful age, taken on behalf of the defendants in the above-entitled cause, wherein NEIL GAIMAN, et al., are the plaintiffs and TODD McFARLANE, et al., are the defendants, pending in the District Court of the United States for the Western District of Wisconsin, pursuant to stipulation, before HEIDI L. DAVIS, a Notary Public in and for the State of Wisconsin, at the offices of LaFollette, Godfrey & Kahn, Attorneys at law, One East Main, Madison, Wisconsin, on June 24, 2002, commencing at 9:05 o’clock a.m.

APPEARANCES

ALLEN A. ARNTSEN and JEFFREY A. SIMMONS,

FOLEY & LARDNER, Attorneys at Law

150 East Gilman, Madison, Wisconsin

appearing on behalf of the plaintiffs;

KENNE TH F. LEVIN,

Attorney at Law, 20 North Wacker Drive,

Suite 2200, Chicago, Illinois, also appearing on behalf of the plaintiffs;

PETE SALSICH, Ill,

BLACKWELL, SANDERS, PEPER, MARTIN, LLP,

Attorneys at Law, 720 Olive Street,

Suite 2400, st. Louis, Missouri,

appearing on behalf of the defendants;

TODD G. SMITH and GABRIEL S. GROSS (a.m.),

LAFOLLETTE, GODFREY & KAHN,

Attorneys at Law, One East Main Street

Madison, Wisconsin, also appearing on behalf of the defendants.





=======

NEIL RICHARD GAIMAN, called as a witness, after being first duly sworn in the above cause, testified under oath as follows:

EXAMINATION BY MR SALSICH: Could you please state your name for the record.

A: Neil Richard Gairnan.

Q: And could you spell your last name for me.

A: G-a-i-m-a-n.

Q: And are you a citizen of the United States, Mr Gaiman?

A: No.

Q: Do you reside here in the United States?

A: I do.

Q: And what state are you a resident of?

A: Wisconsin.

Q: Have you ever had your deposition taken before?

A: No.

Q: Let me just kind of go through some of the ground rules today. I understand you were out in Phoenix last week at the depositions of Todd McFarlane and Larry Marder. You probably observed the procedure. If I could refresh your memory on a few things.





As you saw, it’s a question and answer process. And the court reporter here today is making a record for us. And the goal is that we get a clean record, meaning something that the lawyers can all use later in the case if need be, and it will preserve your testimony.





So with that in mind, I would like to make sure that we, in order to make it clean, that when I’m asking you a question, if you will wait until I finish my question and give your answer. I will do the best I can to wait until you finish your answer before I ask the next question. Is that all right?





A: Yes.

Q: And you have just, my next point, you are already doing it correctly, is we do need to have verbal answers to questions and more than just verbal, they actually need to be words. So things like uh-huh, uh-uh don’t translate very well in the record. Is that okay?

A: Yes.

Q: There will be times when all these rules break down.

We start getting into a conversation, and I’m as guilty of it as the next person, so things aren’t very clear, we are talking over each other. If that’s the case, I may step back and go back over a few things just to make sure we have things clear. Do you understand?

A: Yes.

Q: Also, if at any time you need to take a break, just let us know, that’s fine. We have got refreshments here and there is obviously restrooms.

I would ask you, however, if you do need to take a break, if there is a question that’s currently pending, you should go ahead and give a response to that question and we will take a break afterwards.

A: Okay.

Q: Also, you have counsel here. As you probably saw last week, sometimes lawyers make objections to the questions. There may be a lot of objections today, there may not, but just so you understand, those objections that your attorney is making are in order to preserve the record. A judge would later on rule on whether the question was in fact objectionable. So it may be that I will change my question or it may be that I will simply ask you to go ahead and answer the question anyway.

And unless your attorney specifically instructs you not to answer that question, I will ask that you go ahead and answer. Do you understand?

A: Yes.

Q: You are certainly free to consult with your attorney about any of this. I’m not talking about keeping your attorney out of things. I just wanted you to understand the process.

A: Okay.

Q: You said you never had your deposition taken before. Have you ever been a party to a lawsuit prior to this?

A: No.

Q: Have you ever been a witness in a lawsuit of any kind?

A: No.

Q: What is your educational background?

A: School, English school.

Q: Do you have a college degree?

A: No.

Q: Public school, private school?

A: English public school, which is a private school.

Q: Did you take any college courses?

A: No.

Q: And I would like to ask you some questions now about your employment history. And I don’t need every single job you have ever done. We only have a day.

And I understand that you are a writer, is that correct?

A: Yes.

Q: And have you been a writer -- let me step back. Maybe I can come at it this way. Since the time that you left public school, have you worked as a writer?

A: Yes.

Q: Pretty much nonstop that entire time?

A: My first -- at the point where I started paying taxes, I was paying taxes, very small ones initially, as a freelance journalist, as a writer. And that’s what I have been paying taxes on ever since.

Q: And of course we are going to assume that there wasn’t a five-year period where you were working without paying taxes, right?

A: I was not -- I worked for a I think about a three-year period after getting out of school as a counsellor for the Church of Scientology and was not earning enough to pay taxes during that time.

Q: Are you still involved with the Church of Scientology?

A: I don’t understand the question.

Q: Okay. Thank you, by the way, for telling me that, because that’s something I should have mentioned before.

If there is a time today, and there may be many, that you don’t understand my questions, please just ask me to rephrase them.

You stated that you spent three years, approximately three years working as a counsellor with the Church of Scientology, is that right?

A: Yes.

Q: Were you a member of the Church of Scientology at that time?

A: Yes, at the time.

Q: Are you still a member of the Church of Scientology?

A: I don’t consider myself as such.

Q: When was the first time you published any freelance writing, or maybe I should ask when was the first time, and just generally by year, that writing you did was published?

A: In 1981.

Q: Do you recall what that was, what the first work was?

A: A review of a 10cc concert, I believe.

Q: And was that with a newspaper?

A: Yes.

Q: Did there come a time in your employment or in your career as a writer that you began writing in the comic book industry?

A: Yes.

Q: When was that?

A: 1986, although I had begun writing comic scripts which were later published in comics form in 1985.

Q: So mid-eighties you began writing comic scripts, is that correct?

A: Yes.

Q: And in 1986, was that the first time one of your comic scripts was published in comic book form?

A: Yes.

Q: Do you recall what comic that was?

A: There were a couple that were more or less simultaneous. It would either have been 2000 A.D. or it would have been Knock About Comics, outrageous Tales from the Old Testament, which was a bible comic.

Q: You said 2000 A.D. Was that the title of a comic book series?

A: It’s an English weekly comic, an anthology comic, and they ran a series called Future Shocks, which were three, four, five pages normally with a twist ending.

Q: Have you gone back since we hit the year 2000 to see if you were correct in any of the predictions you might have been making back in the mid-eighties?

A: I was never really into prediction.

Q: I guess that’s a no?

A: No, I have never gone back to check.

Q: Just curious. Did there come a time that you began working with DC Comics?

A: Yes.

Q: When was that?

A: 1987.

Q: And how did that come about?

A: I wanted to write for DC Comics.

Q: Why is that?

A: 2000 A.D. stuff that was published, I rapidly realized that they were taking all rights to the work I did.

Q: Who do you mean by they?

A: 2000 A.D., at that point I think it was Fleetway Publications. One had to sign over all rights and I saw stories I had written reprinted in American editions and that they gave me no copies of and that I was not paid for.

Q: When you wrote for the comic 2000 A.D., were you paid for that work?

A: Yes.

Q: Were you paid a flat fee for turning in the script?

A: Yes.

Q: Did you sign a contract with, was it Fleetway Publishing?

A: Yes, it was a back-of-the-check contract at the time.

Q: And did that back-of-the-check contract state that you were granting all rights in the work you were turning in to Fleetway Publishing?

A: I no longer remember.

Q: How do you know that they were taking all rights?

A: Because they never paid anything else for use.

Q: Were you finished with that?

A: I am now.

Q: Did you ever complain about that to Fleetway?

A: I spoke to Steve MacManus, the editor, who said that was how they did it and they would love to change it, but it wasn’t changed. And that was the last thing I did for 2000 A.D.

Q: When you say they were taking all rights, what do you mean by the term all rights?

A: In this case I mean specifically reprint rights without payment.

Q: So that I understand your answer, do you mean that Fleetway had the right to reprint your work without paying you, is that what you understand by them taking all rights?

A: In this case.

Q: When you say this case, we are referring to the 2000 A.D., correct?

A: 2000 A.D. short stories, that was their practice.

Q: Just so I understand, do you believe that 2000 A.D. should have had the right to do reprints but that they should have paid you for that, is that your contention?

A: Yes.

Q: So it was the lack of payment that was the real problem, is that correct?

A: No other rights issues ever came up on those stories.

Q: Did you have an understanding as to who would own the copyrights in the work that you submitted and was ultimately published in 2000 A.D.?

A: Not at the time.

Q: Do you now have an understanding of who owned the copyrights in the work that you submitted and was later published in 2000 A.D.?

A: Can you give me the question again?

Q: Sure. I asked if you had an understanding of who owned the copyrights in the work that you submitted and was later published by 2000 A.D. and I think your answer was not at the time. So I’m just simply asking at some future time did you come to have an understanding on who owned those copyrights?

MR ARNTSEN: I’m just going to interject here. In answering the question, to the extent that any understanding is based on communications with lawyers, don’t answer as to that. If your understanding comes from sources other than communications with lawyers, then you can answer it.

A: I washed my hands -- after doing those four, maybe five stories for 2000 A.D., I washed my hands of them, have not worked for Fleetway since, have not submitted work for Fleetway since, have not gone back and looked at, nor could I find, I suspect, these days, any pieces of paper signed with Fleetway since, and chalked them up to experience as a bad job.

I also have made no specific study recently of or at any time of English copyright law.

Q: So is your answer that in fact you do not have an understanding as to the ownership of the copyrights in the work that you submitted and was later published in 2000 A.D.?

A: I suspect --

Q: No.

MR ARNTSEN: Don’t speculate. Just listen to the question and answer it.

MR ARNTSEN: I didn’t know whether to instruct or kick there.

THE WITNESS: Kick is fine. I have never done this before.

Q: You are doing fine. Let me just make a statement now. I’m not going to be interested in learning from you today anything that you learned from your counsel or discussed with your counsel. I’m not interested in invading the attorney-client privilege. And Allen will do a good job of making sure that I don’t, even if I wander in there accidentally.

A: Good.

Q: So you understand that. Also, if you would bear with me a little bit and I’m going to look to you, even though you have not done a deposition before, what you have done that I have never done before is work in the comic book industry.

I represent Todd McFarlane. I know something about the work. I represented Image Comics. I know a little bit about their history, but I am not ever going to scratch the surface of what you know.

And part of what we are going to be doing today is trying to get your understanding of some events that took place as long as 10 years ago and more recently. And also, these events have to do and are intimately related with the way comic books are written and published.

A: Understood.

Q: So if I’m stumbling about in this area a little bit and I’m asking the wrong question, please help me out. Okay? I’m not going to ask you to do my deposition for me, but bear with me.

I may say some of the wrong terms. If you can correct me so that we are cleaner.

MR SALSICH: And, Allen, if you can, if it comes up, I looked at Todd’s transcript, I know that happened a few times there.

Q: So the lawyers are, we are getting up to speed, but we will, I will need your help today. Is that okay?

A: Understood.

Q: Also, and I think this probably makes the most sense, I would like to talk primarily in a chronological fashion.

Obviously we are here today to discuss events that took place with you and Todd McFarlane over the creation of some issues of Spawn and things that move forward from there. And I think it makes the most sense to proceed roughly chronologically.

We may jump back and forth, but if I’m way off base in my time or you need to explain something that happened prior to what I’m asking about in order to give a good answer, please feel free to do so and we will just work our way back around. Is that okay?

A: Okay.

Q: And again speaking of chronologically, why don’t we start with the beginning. Will you tell me the first time you met Todd McFarlane?

A: It was a convention called Dragoncon in Atlanta in late June or early July of 1992.

Q: And what were you doing at that convention?

A: I was guest of honor, or one of them.

Q: And what were you doing in the comic book world that would have made you guest of honor at that convention in 1992?

A: I was the writer of a comic named Sandman, which in 1992 was the single-most acclaimed ongoing series of comics probably that there has ever been in terms of literary rewards received and respect in the industry and personal awards that were coming in for the comic and for the writing thereof.

Q: Did these personal awards and the literary awards, did those translate into box office success, if you will, of the comics? Was Sandman a big seller?

A: You -- Sandman slowly worked its way up from the first issue through to the last issue, from, on a league table of one to 500 being all the comics published that month, we started probably in the low nineties and slowly over the next seven years worked our way up more or less to number one.

Since that time Sandman has been collected in trade paperback and has gone on to continue to sell millions of trade paperbacks.

Q: And when you say trade paperback, so we understand, is that a collection of three, four, five, six issues that had previously been published?

A: Yes.

Q: You mentioned seven years. Was that the run of the time that you were working on Sandman during which the book was actually published in a monthly form?

A: I would have to work it out exactly. I think the first issue came out in January of, I think the first issue had a January, 1989 cover date.

Q: 1989?

A: 1989 cover date and was actually published at the end of ‘88, because cover dates and time of publication are not necessarily coincident. Our last issue went on sale my recollection is Spring of ‘96.

Q: Do you know how many issues overall were contained in this series?

A: 75, plus a special.

Q: Why did you stop putting out the Sandman issues?

A: The story was done.

Q: We will come back to Sandman in a little bit, but in 1992, in the Summer of 1992 you were in Atlanta at a convention and this is where you met Todd McFarlane, is that correct?

A: Yes.

Q: Did you know of Todd McFarlane prior to meeting him at this convention?

A: Yes.

Q: How is that?

A: When -- as a writer of comics, I would get the DC Comics, they send you everything they publish that month, and I saw Infinity, Inc. which was drawn by Todd, and later I remember somebody coming up to me in the DC offices showing me Spiderman number 1, which Todd drew and which people thought was very funny because the writing demonstrated that the person writing it had never written anything before.

Other than that, I knew nothing about him.

Q: So you knew Todd was a comic book artist in 1992, is that correct?

A: Yes. I also knew that in 1992, that he and several other artists whose work I wasn’t particularly familiar with because they were all Marvel people, had just left Marvel and founded a comic studio called Image or a publisher called Image, which they announced at the time was all about creators’ rights and treating creators well and that was -- so I knew that.

Q: And how did you come to meet Todd at this convention in Atlanta, were you on a panel together or --

A: No. We were signing in the same room. And in fact, the room contained the two of us, and I was signing on the left at a table and Todd was signing at the right on a table. And we had two lines and they both went out of the haul and went down the stairs and went around.

And Todd’s line was 14-year-old boys and under and my line started with 16 years old and went over, went up from there.

Q: Was Todd signing copies of Spiderman?

A: Spiderman and Spawn, I think there were the first – I think he was up to Spawn 2, maybe Spawn 3 at that point.

Q: So Spawn had really just started at that time, is that correct?

A: Yes.

Q: And Image Comics had just started, as far as you knew, right around that same time?

A: Yes.

Q: Did you and Todd at that time talk about working together?

A: No.

Q: Did there come a time when you did discuss working together with Todd?

A: In several months after that, he phoned me up and asked me if I would consider writing an issue of Spawn. And all, as far as I know the Image people, they were all artists.

And when Image started, they were getting a lot of stick from fans and from the comics press for being illiterate garbage, which is probably a polite way of putting the things they were saying about the comics, chiefly those written by Rob Leifeld.

And Todd had phoned me up and asked me if I would write one. He said what he wanted to do was go to the four best, biggest and most important writers in comics and get a guest issue written by each of them to show people that an Image comic could be well written and to show his, I don’t think he used the word humility, it’s not a word that Todd would use, but that was what was being communicated, that hey, I can learn, that kind of thing.

Q: And that he wasn’t already too big to realize that other people could help out as to the quality of his creation, is that right?

A: Yes. And I also think he considered it the ultimate marketing gimmick to have good writing. He said at one point to me during this that Leifeld and co. were putting foil-embossed stamped covers on things and rolling out new number ones in order to get the numbers. And he had four issues of good writers and that was his gimmick.

Q: So did all of this conversation take place during one telephone call, do you recall, or how did this work?

A: There were several conversations.

Q: Were they all on the telephone?

A: Yes.

Q: At some point did you agree to write an issue of Spawn?

A: Yes.

Q: Was that issue 9?

A: Yes.

Q: Did you discuss with Todd prior to actually doing the writing that was submitted for issue 9, did you discuss financial terms with Todd?

A: No.

Q: Never?

A: Define never.

Q: Never prior to submitting your work -- let me step back. At some point you just testified that you in fact did write an issue of Spawn. That was issue 9, is that correct?

A: Yes.

Q: And I want to talk in a little bit more detail about the process of the writing, but at this point was there a time in which you actually submitted a script to Todd McFarlane or his company to be included along with artwork in issue 9?

A: No.

Q: You never submitted a script?

A: A script is not printed along with the artwork in issue 9. The script is what the artist then draws up. If the script had been printed, it would have been a completely different thing.

Q: Maybe I misspoke.

A: I’m not being semantic here.

Q: No, I understand. And I may have misspoke and it is important for you to correct me if I do that because I don’t want to use terms incorrectly as they apply to this specific industry.

My question was did you in fact submit a script for use in or that later was combined with work to become issue 9?

A: Yes.

Q: Prior to submitting that script, at any time prior to submitting that script, did you ever discuss whether you would get paid by Todd McFarlane for your work?

A: I don’t think it came up in those terms. Can I be helpful for a minute so that we don’t have to --

Q: Sure, yeah.

A: There was no initial discussion of payment amounts.

As I recall, when I agreed to do it, I got a check and a call from Terry Fitzgerald, who worked for Todd in some capacity, which rather surprised me, but this was after I had agreed to do it, sending a check for $10,000 for having agreed to do it and saying that when the script came in, there will be another $10,000 and then after that it would be based on royalties on -- there would be a royalty that would come in on the issue.

And when it became apparent that the orders of the issue were, according to them, I believe 1.1 million copies, they said it was going to be around $100,000, which would be the kind of royalty that you would have got from any publisher on those kind of sales, but that was not -- none of the financial details were discussed with Todd in those early phone calls.

Q: So I understand correctly, I believe you said that you were surprised to receive the first $10,000 check from Terry Fitzgerald, is that correct?

A: Yes.

Q: So when you received that check from Terry Fitzgerald, had you not discussed any financial terms with Todd at that point?

A: No.

Q: You had not?

A: No.

Q: Did you call Terry and say “What’s this check for”?

A: As I recall, it came with a note saying, which I believe we still have in the files, saying here is $10,000, we will send you another when we get the script.

Q: How did the size of that -- step back. Did Terry’s note suggest that that was an advance against future royalties?

A: Yes.

Q: How did the size of that advance, $10,000, compare with advances you had received for other work you were doing at that time?

A: It was comparable.

Q: Had you ever received a $10,000 advance for one issue of a comic book before?

A: If memory serves, I had received more than that for Black Orchid, which was a three-issue series that I had done for DC in 1988. As a novelist, I was used to receiving, I received significantly more than that.

As for a one-shot story, it was significantly more than I had received for one comic.

Having said that, I had not written at the time, nor had I had any interest in writing comics that would have sold in the numbers that Spawn was. And also, we were in the middle, actually that was – we weren’t even in the middle, that was the high point of -- you can actually go back and look at the graph. That was the high point of what was called the speculator boom.

So it was -- that payment would have been very comparable to anything coming out then as a number one or with a foil-embossed cover or anything.

Comics were selling 750,000 to 1.5 million copies. These days 100,000 is incredibly good. These days 40,000 is really good.

Q: You were at Todd McFarlane’s deposition last week, were you not?

A: Yes.

Q: And you heard Todd tell his version of the events that we are talking about, is that correct?

A: Yes.

Q: Do you recall Todd testifying, and I’m not going to try the exact testimony, but I have read a rough version of the transcript, do you recall Todd testifying to the effect that each of the four guest writers, and that would include you, of Spawn issues 9 through 11 received essentially the same financial terms?

A: Yes.

Q: And that those terms were, as Todd recalled, $100,000 each?

A: Yes.

Q: Was there anything about Todd’s -- excuse me. Let me ask you one other question.

Do you recall Todd testifying that regarding the financial terms between you and him for issue 9, that you wanted to make sure that you did not get any worse than the standard DC Comics deal that you were getting for Sandman at the time? Do you recall Todd testifying to that?

A: I recall Todd approximating -- I recall Todd saying that, yes.

Q: What I would like to ask you is now is your time to tell your version of those events. And I would like to ask you maybe just generally tell me what you understand to be all of the discussions you had with Todd about money terms and then I will break it down and ask you some questions.

MR ARNTSEN: And what time frame here are we talking about? I think it would make -- for instance, there are some obvious time breaks. One is before the script is submitted.

One is, you know, when the comic is published and then obviously going forward on that -- just wait a second.

Q: That’s a good point. And let’s try to do it this way, and this may be not always normal deposition procedure, but I think it may help this time.

I’m not interested in conversations that you and Todd had in 1995 or 1996 or even later about going back to what was said in 1992.

What I’m talking about is the discussions that you had at some point, and correct me if I’m wrong, at some point would you agree with me that you and Todd came to an agreement in and around 1992 that resulted in you submitting the script that ultimately was included in issue 9?

A: Yes.

Q: And that you, pursuant to that agreement, whatever it was, you received at least $100,000, is that correct?

A: $100,000.

Q: And that you, going forward from that point in time, you did receive some royalty payments as a result of the work you had done in issue 9, is that correct?

A: I would have to check to see.

Q: I’m not asking you to hold -- right now what you got, but --

A: I don’t know. I would have to check.

Q: In any event, you did agree to do the work and Todd did agree to pay you something that became $100,000, is that right?

A: Yes.

Q: That’s the time period I’m talking about, just that agreement. And I don’t know whether that agreement took place prior to doing the work or in the process of doing the work or shortly thereafter. So you will kind of need to tell me all of that discussion.

A: Before I got the work, before I agreed to do it, there were several phone calls from Todd promising things and trying to persuade me to do it. From my perspective, there were a number of downsides to working with Todd and to working with Image.

They were, despite their obvious commercial success, the industry laughing stock at the time, which meant that by working with them, by putting Mr McFarlane in the position where he could use as his sole advertisement for Spawn 9, a black page with the word Gaiman written on it, that was something that was lending him cache and I had to decide whether or not I was willing to do that.

So Todd was very much courting me. He very wisely didn’t mention money at the time.

What he talked to me about was showing unity with creators, sticking it to the big companies, complete creative freedom, not signing anything away, and just being, and also just pointing out that it would shake people up.

And I think on the second phone call, when I was still wavering, he also said “Okay, you know, I think I have got Alan now where I have got Alan and I think Dave Sim and Frank Miller are going to say yes. Come on, it’s the big four, you can’t be left out.” And those were the things that he used to persuade me.

I remember him offering complete creative freedom. The phrase he used was “You can have 22 pages of Spawn reading the newspaper for all I care. You can make up his past, you can do whatever you like, you have complete creative freedom.” And I said yes in the end.

Money was not discussed. The point money was discussed was after that first check came in with a little note from Terry Fitzgerald after I had done the first, my first sort of brainstorming. I had just brainstormed, said here is an idea, here is an idea, here is an idea and sent it off to them. And I got this check.

And the next time Todd phoned, I said “By the way, you know, you sent me a check, you haven’t sent me any kind of contract.” And Todd said “We don’t send contracts, we treat you better, you know, it’s just that’s not how we do business, we don’t do contracts, but we will treat you” -- he said “But I 1will tell you what, I will treat you better than DC ever would with their contracts.” And that was the sum total of it.

And I thought okay. And I sent my agent, Merrilee Heifetz, my literary agent, her share of the money, her 10 percent. And she phoned me up and said “Where is the contract that goes with this?” And I said “There is no contract. Todd has said he is going to treat me better than anybody would with a contract.”

And she said “You trust him?” And I said “Yeah, he seems like a very good guy on the phone and he is not asking me to sign anything away.”

So obviously I trusted him. And that was where we got up to at that point and that was the entire conversation about money.

Once the orders started coming in on these books, Spawn from what, this is -- I don’t know if this from personal knowledge, but this is what Todd told me at the time, the orders from Spawn, for Spawn 6 or 7 were down to about 600,000 copies.

And with the Alan Moore issue, they went up to about 1.2 million. And for me they were about 1.1 million. So they doubled as a result of the gimmick. And Dave Sim came in at about 800,000 and Frank Miller’s was up there around a million.

And he decided to just, said “I’m just giving you all $100,000.” And this was after the orders had started coming in and he saw what was actually happening. And he said “I’m just going to give you all $100,000 rather than do the sums, so you have each got a round number and you can do with it what you will.”

And I did the sums in my head, figured 1.1 million, 195 comics, 100,000 seemed about comparable to the kind of money I would be getting from DC, if I decided to write a number one for them at that point and, yeah, left it about there.

I had recently done, about that time, I did Sandman number 50, our 50th anniversary edition, which came out with a special cover, extra length issue, and that at the time had sold over a quarter of a million copies. So, you know, you were looking at a 30, $40,000 royalty check. on that. So it was definitely comparable.

MR ARNTSEN: Can we take a quick break here?

MR SALSICH: Sure.

(A short recess is taken)





Q: Mr Gaiman, before we took a break, we were talking at some length about your agreement with Todd McFarlane that led to your work on issue 9 on Spawn. Do you recall that conversation?

A: Yes.

Q: And I want to break down and just ask you a couple follow-up questions about what you just testified to.

First of all, you were having your conversations with Todd McFarlane during this time.

Did Todd McFarlane explain to you that he was speaking on behalf of a company he had formed?

A: No.

Q: Did you ever discuss any of the corporate structure involved with Todd and Image Comics or Todd McFarlane Productions or anything like that?

MR ARNTSEN: Ever? What time period?

Q: He has got a good point. Let him make those objections even though if you and I think we understand each other, it’s important to make sure we do clarify the record.

Again, we are talking about the time frame between your meeting Todd McFarlane in Atlanta in the Summer of 1992 and the time that Spawn issue 9 hits the newsstands.

A: He told me that Image Comics was about creators rights, that the analogy that he would use, that DC and Marvel were the plantation owners and they were the slaves who left the plantation and started a free land, that, you know, from the first he explained that Image would treat me better and treated its creative people better than DC or Marvel ever did and that, and I remember at one point in there he even offered me my own Image comic if I wanted one under him.

I remember he explained that the five shareholders, or possibly six shareholders, there was one guy who was sort of graying out on the edges and I don’t know if he ever did anything, who left early on, but they could bring comics to the table and they would come out with the Image I on them, which meant you would sell at least over half a million copies.

If I wanted to do one of those, I could just find an artist and go for it. So those were the kind of things that were being said.

Q: Did you understand that you were making an agreement with Image Comics when you did Spawn issue 9?

A: I understood that I was talking to Todd McFarlane who wanted me to write an issue of his comic which was being published by Image. I assumed that Todd had an agreement with Image. And as he kept telling me, you know, he was part of Image and the Image I was very important to him, the logo.

Q: Did Todd ever tell you that he had formed a company called Todd McFarlane Productions?

MR ARNTSEN: Again ever?

MR SALSICH: Same period we were talking about.

MR ARNTSEN: ‘92 to ‘93 is what we are talking about?

MR SALSICH: Correct.

MR ARNTSEN: Up to ‘93?

Q: Let me ask a clean question again. Assuming the same time frame we have been discussing, 1992, 1993, at any point during that time did Todd McFarlane tell you he had started a company called Todd McFarlane Productions?

A: No. Phone calls from Todd would begin “Hey, this is the Todd-meister,” or “Yo, it’s Toddy,” not this is Todd McFarlane representing Todd McFarlane Productions or similar. I don’t remember Todd ever mentioning Todd McFarlane Productions.

My understanding was that I was, he was the artist, I was the writer and it was two creative people getting together.

Q: Who did you understand to be the person or the party that paid you $100,000?

A: Todd.

Q: Not Image Comics?

A: Todd was one-fifth of Image Comics.

Q: You are aware that people could be one-fifth of one company and one-tenth of another company?

A: Yes, but he was one-fifth of the company that it was coming out. Todd was talking about Image all the time, you know, bringing it out as an Image comic. He was definitely representing himself to me on the phone as somebody to whom the success of Image Comics was absolutely vital.

And I knew that my comic was being published by Image Comics. It had that great big Image I on the cover. Beyond that --

Q: I understand all that. What I’m really just trying to get to is in the complaint that you have filed in this action, you have named Todd McFarlane as an individual as a defendant, you have named Todd McFarlane Productions, Incorporated as a defendant, you have named TMP International, Inc., you have named McFarlane Worldwide, Inc. and you have also named Image Comics, Inc. as defendants. Are you aware of that?

A: Yes, I am.

Q: One of the claims that you make in your amended complaint in this lawsuit refers to what has been called a, excuse me, the 1992 agreement?

A: Uh-huh.

Q: Okay. Are you -- do you recognize that?

MR ARNTSEN: Just to interject here, as you know, counsel drafted the complaint.

So again, to the extent you are talking about facts and using the complaint as references for that, that’s fine, but it’s a legal document.

Q: Absolutely, I understand that. And I’m not going to try to make you make statements that I’m later going to argue are legal conclusions, if there is anything particularly noteworthy about something you may have used in a heading.

I’m simply going to ask you about some facts.

You or together with your counsel have alleged two agreements that you have with Mr McFarlane and/or some of the other defendants, both of which you claim have been breached. And that’s the reason for this lawsuit, is that correct, or one of the reasons?

A: It is.

Q: One of those agreements took place in 1992, is that correct?

A: Yes.

Q: And one of them took place in 1997, is that correct?

A: Yes.

Q: I want to focus right now on what we at least today will hope understand is the 1992 agreement, correct?

A: Yes.

Q: And in 1992 the only agreement that you have testified to so far with Todd McFarlane is the one that led to you writing issue 9 of Spawn, is that correct?

A: Yes.

Q: And I’m doing that primarily for purposes of narrowing our discussion to the 1992 agreement. Maybe it’s easier if I say regarding the 1992 agreement, we will understand what we mean, rather than trying to get at a particular time frame. Is that okay?

A: That’s good.

Q: If at some point I use that term and you say well, I’ve got to explain it by going forward to 1994, ‘95, please do so. Okay?

A: Okay.

Q: All right. And my question is with whom did you enter into the 1992 agreement?

MR ARNTSEN: Object to the extent it calls for a legal conclusion, but answer with regard to your understanding.

Q: Certainly. What is your understanding of who were the parties to the 1992 agreement?

A: Me and Todd.

Q: Just Todd McFarlane the individual?

A: I didn’t know -- I think that’s a legal conclusion.

He didn’t represent himself to me specifically as I am now talking -- when I saw him do his deposition the other day, he would quite frequently say things like “Now, at that point I, and I’m speaking here as Todd McFarlane Productions.”

He didn’t do any of that stuff to me on the phone, but the and I felt that I was talking to somebody who was wearing, in terms of the hats that he was wearing at the time, there was Todd the artist, who was going to be drawing my comic, there was Todd the creator and ongoing controller of Spawn, the comic, and there was definitely Todd as one-fifth of the Image partnership.

This was being seen -- I wasn’t just writing a comic for Todd McFarlane. I was writing -- it was very important to Todd that I was writing an Image comic. That was repeated several times, that, you know, he didn’t phone and say “I, Todd McFarlane, have been taking hits as a bad writer.”

In actual fact, by the point that he got -- well, I mentioned earlier that he was laughed at for Spiderman number 1. By the time he got to Spawn, he was, you know, approaching competency and, you know, was competent.

It was the other guys who were getting -- it was Image Comics as a generality, not Todd, that was getting the shit for bad writing and I -- which was one reason for coming to me, getting one of the four most respected writers in comics at that point to come in and write an issue, have an Image comic.

Q: Now, you testified before that at the time you agreed to do the writing for issue 9 of Spawn, and I want to focus our time now more narrowly in the time that you entered into what we now will call the 1992 agreement.

A: Uh-huh.

Q: Do you understand that at some point in time you and Todd reached an agreement that led to you writing issue 9?

A: Yes.

Q: That’s what I want to focus on, at that point in time. And I don’t know exactly when that is, so you may have to tell me.

A: Okay. Todd phoned me up, Todd gave me a bunch of reasons for writing it. I said I would think about it.

Todd phoned me up again. Todd gave me a bunch more reasons for writing it. These would have included, well, these did include at that point it wasn’t treating you better than DC would, that was a little way after, but at that point it would have been, you know, we will take care of you better than any of the big companies, this is all about creator rights, it’s all about creators banding together, you know, we have to do this to show -- and respect.

Respect was one of Todd’s things that he kept talking about. He specifically mentioned his upsets with Marvel and why he left, which is they had foreign reprints of his stuff he didn’t get paid for. They do T-shirts that he never got, posters that he never got, he wouldn’t -- he didn’t get a share of.

He talked about a character called Venom, who I don’t know very much about, and I don’t know if it was somebody he created, but he was saying he didn’t get a share of the stuff, and over at Image it wasn’t going to be like that.

This was about respect, and that I think was the point where I went, I said yes, I will do it, understanding that this was all about respect.

And I remember during that period, I don’t remember whether it was after I had agreed or after I had said yes that first time, but before he said the better than DC thing, when I had asked for a contract, or whether it was even before that, he had Terry Fitzgerald send me the rough draft of his Comics Journal interview, he did this interview with The Comics Journal, and sent me a bunch of interviews by Todd in which he was just talking about, you know, the respect that people didn’t get in comics and how the end of the day he left Marvel because it got down to Spiderman T-shirts with his images on and he got nothing, he didn’t even get copy of the T-shirt, and that was never going to happen.

So it was that kind of, that was -- we are talking about a conversation, a 10-year-old conversation here and several 10-year-old phone conversations, but he was very, he was still very angry about the way that they had been treated at Marvel and was very adamant that Image was not somewhere where people were being treated like that.

Does that answer your question?

Q: It does. And just so that I can narrow it down, so I understand again, and I want to just focus on specifically the point in which time you came to the agreement. And I think you have mentioned that it was during the process of Todd’s talking to you about his reason for leaving Marvel, his reasons for starting Image with the other Image founders --

A: Would there have been -- I mean, I know asking you is something -- but in terms of context here, you know, my agreement was, you know, at the point where I said yes, I will write an issue for you, you know, there was that as a moment of agreement, but obviously there were things beyond that.

I could have handed him an issue and he actually could have gone “You can’t use this.” We might have ended it at that point or whatever.

Q: That’s a good point. Let’s break it down into two steps here.

A: For me probably the real moment of, you know, we have separate -- because there was no contract, because they declined to send a contract when asked, I felt the agreement was -- you know, I’m not sure I could draw a line in the sand and say before this there was an agreement, after this there was not, an agreement, through that, you know, the agreement was much more broad and general.

Q: Let’s see if we can try to do that today a little bit. Okay. And I realize I’m asking you to go back 10 years, but there was a point in time in which you agreed to do the work, correct?

A: Yes.

Q: And then there was a point in time when you did the work, correct?

A: Yes.

Q: And there was a point in time when Todd accepted your work

A: Yes.

Q: -- correct? And then lastly, there was a point in time in which issue 9 was published?

A: Was published.

Q: And on that time frame, between item number one, you agreeing to do the work and item number two, when you did the work, you received $10,000 in a check sent with a letter by Terry Fitzgerald, correct?

A: Yes.

Q: And then you did the work, correct?

A: Yes.

Q: And then you received another $10,000 check upon submission of the work, correct?

A: Yes.

Q: And then Todd accepted the work and --

A: Possibly the check was sent for acceptance of the work.

Q: And doing the work and Todd accepting the work were pretty close in time, correct, you doing the work and Todd saying great?

A: Yes. There were a couple of other things that were done in that process before we got there.

Q: And rather than go into details in those, would they generally be described as somewhat of an editor-writer function, I mean, he may have suggested oh, what about this or you may have discussed doing something, was it that sort of thing that happened between there or --

A: Todd didn’t suggest things. Todd kept repeating “Hey, if you want, whatever you want to do is fine.”

Q: Let me ask you this. Did Todd accept the first draft that you sent of the script for issue 9?

A: Yes.

Q: So that’s all I’m talking about, doing the work and Todd accepting the work. So then you received the $10,000 check as part of that, as the result of that little transaction, you doing the work and Todd accepting it, correct?

A: Yes.

Q: And then sometime between issue 9 being – between what we have just talked about, you submitting the work and Todd saying great and issue 9 being published, in the comic book industry isn’t there a step called the solicitation?

A: The solicitation of -- yes, there is, but the solicitation was done before that.

Q: When would the solicitation have been done?

A: The--

Q: Prior to you submitting the script, wasn’t it?

A: Yes. I got a call from Terry Fitzgerald saying we need something for the solicitation. And I wrote a paragraph for Terry describing that he could put in his solicitation and I spoke to Todd and told him a little bit about the issue.

Q: And based on those conversations with Todd, maybe it was more than one or maybe it was one, and then the paragraph you sent to Terry, it was based on that information prior to you submitting a full script that Todd had to do the solicitation, correct?

A: Yes.

Q: And just so we are clear, what do you understand by my use of the term solicitation in this context?

A: In this context two different things, one of which is soliciting into the trade, soliciting the book to the trade, having something to show them and tell them so that the comic stores could order.

Q: And you referred earlier to a point in time in which the orders started coming in and it looked like yours was going to be 1.1 million and Alan’s was going to be 1.2, et cetera. Are those the orders coming in that you are talking about when you say the solicitation at this context?

A: Would you like a quick 35 seconds on sequencing and --

Q: Yes.

A: Okay. In order to understand comics, you need to know what, that the body of the greater part of what was being sold in is being sold into something called the direct sales market. This is not -- it’s not newsstands. It’s not supermarkets with a stack of comics.

It’s the dedicated comic stores that are selling to people who are coming in to buy comics. They are buying their comics exclusively through a distributor and the distributor is buying them nonrefundably from a publisher, nonreturnably.

The typical magazine trade, you send out your magazines, 50 percent of them will come back. When the direct sales market began, you were selling comics in nonreturnably and you were printing them to order because you give the distributor your details on your comic, he or it then brings out a catalog.

At the time there were two big distributors, Diamond and Capital, and several smaller ones. These days it’s basically just Diamond.

And those phone book sized catalogs then go out to the comic stores, who look through them and go okay, well, I have got X number of people who buy Sandman, so I will order X number of Sandmans.

So in order to do that, you need to have material ready before the comic is, you know, in terms of you may have a three-month production cycle for a comic, but you may need your solicitation information four months before the comic is ready so that they can get it printed, so that three months before, you have that sequence.

Given the way that that works, you are printing to order when you print. So that’s how, that’s how that works, which is why you need something to solicit.

Now, you are soliciting to the trade at that point, but the trade also is, you know, the comic store owners very well give away, sell, have out there on the front, and so on and so forth, the catalogs from the distributors. They make sure their customers know, hey, you know, I have got this thing coming up in three months’ time, or you will get things, it gets even more to the point where if you are doing a lithograph or a statue or something that’s going to take longer to produce, you may solicit it in six months ahead of time with information to the store owners that you are only going to be doing it to order so they better let their customers know and get orders from their customers six months ahead of time.

Q: Because the store owners, the direct marketing to the dedicated comic stores, they are obviously taking the risk that they will buy too many of a certain issue because they cannot return it, is that correct?

A: Exactly.

Q: So they need to then go out and solicit orders from their customers?

A: Yes.

Q: Okay. And so when you earlier stated that, again the point in time we are still talking about are sort of a four-step process here, prior to issue 9 being published

A: Prior to it being written.

Q: Okay. Prior to it being written, the solicitation is done?

A: Yeah.

Q: And as a result of the solicitation, Todd at some point is able to predict that the orders are going to be around 1.1 million of the comic, is that correct?

A: Yes, because they need the, you know, they need the numbers in before they get the book printed.

Q: And then it was as a result of getting the orders in, the numbers in that came from the solicitations, that Todd McFarlane stated to you and Alan and Dave and Frank that I’m just going to give you guys all $100,000, is that correct?

A: That was later. Initially I just remember hearing from Terry Fitzgerald, I said “What are we, you know this is really cool, this advance, what are we talking about, do you think, in terms of the final royalty.” And he said “It looks like about $100,000.”

I think it was only after Alan Moore’s issue was actually published that Todd turned around and just said “Hey, I’m giving you guys $100,000 each.”

Q: It was based on, again based on what you just explained about the process, somewhere around the time that Alan’s issue 8 was actually published – and Spawn is published monthly, correct?

A: Yes, ish.

Q: Roughly. So by the time issue 8 hits the stands or the dedicated comic stores, solicitations have probably all gone out all the way through issue 11, would that be correct?

A: Yes.

Q: So at some point right around that time –

A: Yeah.

Q: Very close in time?

A: Right about there.

Q: So right around that time when Alan’ s has come out and yours is the next to come out, Todd has got a pretty good understanding, as far as you know, about what the numbers for these four issues are going to be, is that right?

A: Definitely, yes.

Q: And he sees that they are all going to do great, some are a little more than the others, but says I’m just going to give you guys all $100,000, is that right?

A: Yes.

Q: And as far as you know, or as far as you knew at the time, you said you did the rough calculation based on what you would have expected to receive from DC Comics based on an issue that sold like yours did, like issue did, and figured that that $100,000 was about right, is that correct?

A: Yes.

Q: And then shortly after Todd says I’m going to give you all $100,000, is that when issue 9 was actually published?

A: I don’t recall.

Q: Sometime around the time yours was published Todd told everybody he was going to pay them 100,000, does that sound about right?

MR ARNTSEN: I’m just going to object just for a second. He is not necessarily going to know what Todd told other people. He is going to know what Todd told him. So just with that objection there for sort of clarification.

Q: I understand the objection. Let me ask you, did you not earlier testify that Todd told everybody he was going to give them $100,000? When I say everybody, I mean the four of you.

A: Todd told me that he was, this was around publication as we were heading up into it, that he was going to give everybody $100,000 as a flat check and not try and calculate anything because Todd -- and there would be no paperwork. It just made everything simpler to cut a $100,000 check. I know from conversation with Dave Sim that Dave got $100,000 check for his issue.

Q: And you testified before that you thought Dave Sims issue took orders in around the 800,000 number, is that right?

A: That is what Todd told me at the time.

Q: Was there something else?

A: I remember Todd explicitly saying that all of the -- the 1.1 million and the 800,000 excluded newsstand and that there would be more money to come once they got their newsstand figures in during that time, but I don’t have recall of seeing another check, nor did he ever mention the newsstand stuff to me again.

Q: Is it your testimony that you did not receive any more checks or that you just don’t recall for issue 9?

A: For issue 9, yes, I never received another check specifically for sales of issue 9.

Q: Let me ask you this, and maybe we can do it this way. I think we are very close here, but I think it will be very important to do it like this.

Can you tell me as you sit: here today what, and I realize I’m asking you to go back to a point in time at which you reached the 1992 agreement as you have described it in your complaint, what you understood the terms of that agreement to be, what were you committing yourself to do in the 1992 agreement?

A: I was going to write him a really good issue of Spawn.

Q: Was that it?

A: Well, further than that, I was not being asked to sign anything away. He made it explicit this was not work for hire.

Q: Did Todd actually use those terms?

A: He said “I’m not asking,” you know, “you don’t sign” he said “You are not signing anything, but you are not signing anything away.”

Q: Tell me --

A: I don’t know that he said anything specifically about work for hire, but I know it’s not work for hire unless you sign a specific agreement to that effect.

Q: So I just want you don’t recall Todd using the words work for hire one way or the other?

A: No.

Q: What exactly do you recall Todd saying, as close as you can remember his words, and I realize it’s going back a while, but you have probably given a lot of thought in the last six, nine months now with this lawsuit, it’s certainly been discussed a lot on Web sites and interviews and things like that. So to the extent that that’s helped you recall the conversations you had back then --

A: I don’t understand what people discussing it on Web sites would have to do with our conversations.

Q: Well, from what I have seen on some of the documents we have been produced and from what I have seen on your Web site, you have had some interviews and you have had other discussions I think on the Web site itself about what happened when you and Todd agreed to work together on Spawn issue 9, is that right?

A: You would have to show me the interviews.

Q: We may do that in a few minutes. I just got handed a stack of E-mails that were in response to your request that people send you E-mails about anything Todd may have said back in that time.

So my point is this. Have you had the opportunity in the last six to, let me finish my question, if I can, have you had the opportunity in the last six to nine months, and that time frame may be a little fuzzy, to give some thought to what took place back in 1992 between you and Todd?

A: No more than I had previously, you know. It wasn’t big and complicated.

Q: What I’m trying to get to then is what was it though, and you stated that your agreement was, in 1992, your obligation under the 1992 agreement were to write a really good issue of Spawn, correct?

A: Yes.

Q: And nothing else, and that includes not signing anything away, is that correct?

A: I don’t see that not signing anything away was one of my obligations.

Q: Well, you were not asked for any further obligations such as signing away anything, is that correct?

A: Very explicitly no, yes.

Q: Did you have any other obligations as you understood them in 1992 under your 1992 agreement?

A: Obligations, further than writing a really good issue of Spawn at that point?

Q: That’s my question.

A: My obligations, no.

Q: What were, and I’m going to -- we are going to talk about Todd and not Image Comics or not anybody else, because as you have already testified, Todd didn’t really talk about which hat he was wearing at that time, is that correct?

A: Uh-huh.

Q: As far as you knew you were entering into this agreement with Todd, is that right, Todd McFarlane?

A: Yes.

Q: What did you understand when you entered into the 1992 agreement Todd’s obligations to you to be?

A: I understood that if he liked the issue, he was going to draw it and print it. I understood that this was not work for hire.

I understood that Todd would initially treat me very well as he’d kept saying and later clarified into when I actually asked for a written contract, which I was very -- which I would have liked, that no, I could trust him, but whatever happened, he would treat me better than DC. I understood that.

I’m trying to think of other things specifically from Todd that he would have said at the time that I would have understood.

Q: What about financial obligations from Todd, specific financial obligations from Todd to you?

A: Well, at the point where we were talking money, I understood he would treat me better financially than DC ever would.

Q: Did you ever discuss with Todd what that meant, financially?

A: Later, yes.

MR ARNTSEN: Ever?

Q: No. When later? Let’s start that way. We will rule that out.

A: 1996.

Q: So in 1996 is it your testimony that that was the first time that you talked with Todd specifically about what the financial terms were back in 1992?

A: There may have been a phone conversation in ‘95, but basically, yes, 1996, when I went out to Phoenix, was the first time that we actually sat there and talked money.

I was concerned that toys were coming out, the Angela toys specifically, that I was getting no money for, and they had either just published or about to publish the Angela trade paperback, the first one, and I was concerned, there seemed to be no royalty provisions or anything, and wanted to find out why I was no longer getting anything.

And I was also concerned at that point that Todd might get -- at that point I still trusted Todd and I was rather concerned that he might either sell to Mattel or get hit by a car or something and that whoever took over from Todd would find no pieces of paper that had any kind of, that listed what my share of what I had created for him was.

Q: So prior to, if I understand correctly, prior to possibly 1995, but maybe 1996, prior to 1995 or 1996 there was never anything in writing between you and Todd that discussed royalty calculations, or any specific financial terms with respect to any of the work that you had done for Todd to that point, is that correct?

A: True.

Q: And in 1992, when you are entering into the 1992 agreement, you and Todd never discussed the financial terms that you would upon which you were doing the agreement other than Todd saying he would treat you better than DC Comics, is that correct?

A: Yes.

Q: With one addition, that he actually sent you two $10,000 checks and then finished it off with an $80,000 check around the time or shortly after issue 9 came out, is that correct?

A: Yes. Could we have a quick break?

Q: Sure.

(A short recess is taken)





Q: When you were working on issue 9, when you did the script for issue 9, among the people that appeared in the story in issue 9, there were three characters that you have claimed in your lawsuit were created by you, and I think Todd has agreed in his deposition that those were characters in the script that you wrote for issue 9. Do you recall the three characters I’m talking about?

A: Of course.

Q: One of the them is the Angela character, is that right?

A: Yes.

Q: Cogliostro?

A: Yes.

Q: And a character that later became known as Medieval Spawn?

A: Medieval Spawn.

Q: Okay. Let me just restate something. We have been going a couple hours. We have got kind of conversational. I have talked over you a couple times and you have talked over me, and that’s natural, but if we can both try to do the best we can to wait till the other is finished, it will be a lot cleaner and we will end up doing the thing faster too. Is that okay?

A: Absolutely.

Q: I would like to ask you some questions about the development of those characters.

A: Sure.

Q: And first of all, let’s just start with Angela. Where did you get the idea for Angela?

A: I asked Todd to explain Spawn to me. And he said Spawn is an intelligible, or as best I remember, he said Spawn was a CIA operative, he is dead, he gets killed, he goes to hell. And the devil, who at that point he didn’t have a name for, later called him, actually Alan Moore called him the Malebolgia, has sent him back to earth with a limited power thing and he is training to be in the Army of Hell. It was very important he was part of the Army of Hell.

And I said to Todd “Okay. And who are they fighting?” And Todd said “I don’t know.”

And I thought about it a little. And I thought well, this wasn’t talking to Todd, this was on my own, I thought well, you don’t have an Army to fight librarians. If you are putting together the Army of Hell, one assumes that they are there at some point to fight the Army of Heaven, and that if you have an Army, heaven’s army is worse. I thought cool, that gives me an angle.

And I thought well, is there any reason why the angel can’t be female. They were, up to that point, I think Todd sent me three or four issues of Spawn at that point, whatever was published. There were no women anywhere in them except for Spawn’s ex-wife, that I remember.

I thought well, let’s create a fun female character who is a kick ass angel. And I thought it would be good to -- there wasn’t much up until that point, Todd didn’t have a lot in terms of Spawn background story at that point. He had his situation, CIA guy dies, goes to hell, comes back, is no longer, you know, is super powered dead thing whose life has moved on, and he had a scenario. He didn’t actually have -- from talking to him, it became apparent he didn’t have anywhere he was going with it and he didn’t have much in the way of background.

So I thought it would be a good thing to give him background and to do the kinds of stuff for him that I would do for me in an issue of Sandman, where I will set up, you know, you will toss out a dozen things knowing that in two years’ time, or a year’s time, or six years’ time or whatever, you may need them.

Q: Okay. So you conceived of the idea again building on the foundation that there was an Army of Hell, Alan Moore had started to give some identity to the leader, and you may have not even know that at that point?

A: I think at that point I didn’t know.

Q: So you came up with the idea of the angel, is that correct?

A: Yup.

Q: And you wrote in your script whatever information was included at least at that time in her story, correct?

A: There was -- yes. There was also the solicitation in which that was, if memory serves, that would have been where I named her, which was done before.

Q: And you understood from the outset and throughout the process that Todd was going to be the artist who drew the visual image of the character of Angela, correct?

A: Yes.

Q: And I understand that you sent some thumbnail sketches along with your script to sort of give an idea of how it visually might layout as the story progressed, is that correct?

A: Yes.

Q: But did you hear Todd testify the other day that he drew the actual character of Angela who appeared on the cover as part of the solicitation that he submitted prior to receiving your script?

A: Yes.

Q: Did you agree with that or is that how you recall it?

A: Yes.

Q: Let me ask you then about the -- another question about Angela. Then it’s my understanding, we will talk a little bit more about this in a few minutes, that the Angela character sort of took on a life of her own, at least to the extent that she ended up getting her own three-issue mini-series about two years later, is that right?

A: Yes.

Q: And you were the author of all three issues of the Angela mini-series, correct?

A: Yes.

Q: Two other characters that are central to this lawsuit that you have alleged were your creations in issue 9, one is Cogliostro and one is Medieval Spawn, is that right?

A: Yes.

Q: I would like to ask you about Cogliostro.

A: Go for it.

Q: Tell me how you got the idea for this character.

A: Spawn was kind of dumb, and he was sitting, living in this alley with these burns. And Todd had this gadget, this sort of device of his power counter going down.

And I had to have something for him to do in the alley while he was waiting for Angela to turn up and beat him up, which means that he has to have a conversation with somebody, which means that I wanted a -- it needed to be somebody who knew a little bit more than he did, the idea being that I wanted a character who just was there in order to basically say aha, you don’t know what’s going on and there is all sorts of mysterious stuff and furthermore, there is cool things to learn.

Q: Sort of give a little exposition at that point about things that may come up in the future or maybe things that happened in the past?

A: Exactly. And in the first draft of the script I called him old man. And then I thought well, let’s give him a name. And I called him Count Nicholas Cogliostro. I named him after the assumed name of Joseph Balsamo, who was an eighteenth century fraudulent magician, because I thought, I liked the idea of naming him after a fraud. He is an old fraud, but he is also a fraud that knows the truth.

Q: Is that character you mentioned, the assumed name of the eighteenth century fake magician, fraud magician, you are probably more familiar with this than I am, I have seen that name in some other literary works. It popped up in last year’s movie The Affair of the Necklace, which is the old story of --

A: That’s--

Q: Is that the same character?

A: Same guy.

Q: So that’s where you had the name and decided to be -- it made some sense to draw in a name of somebody that had a fraudulent background. Were you meaning to imply that this guy was a fraud as well?

A: Well, fraudulent and magical and, no, my idea for that character, and to be honest, I have no idea how much of this Todd has or hasn’t used because it’s been many, many years since I have looked at a Spawn, my idea for the character that I told Todd when he asked me about him was that this guy was one of the hell Spawn from the dawn of time who had survived the –the idea was, Todd had this whole thing set up whereby the Spawns come in with a power counter and when your power counter hit zero, the devil gets you.

And I thought well, wouldn’t it be cool if there was just one of these old guys, you know, I don’t ever have to run my power counter down, I don’t have to run around fighting crime, I can work other ways and he would come in sort of as Spawn’s mentor wherever he needed him, just somebody.

Todd didn’t have anybody in the series that could come in and say anything like aha, you shouldn’t have done that, a little bit of wisdom over here for you, which gives you a plot. If you are writing a monthly comic, you need a character that will do that. You need something that will do that.

So while I had Spawn stuck in this alley with a bunch of bums and --

Q: Let me just stop you right there. Just so I understand, do you visualize Cogliostro not so much as a character about whom the story was, as much as the plot device, to help the story move along, to help direct or lead Spawn through the path as he went forward, is that right?

A: As an author, you can’t divide characters into characters and plot devices. Characters have a function, which can be a plot device, but they are also characters.

His basic function was I wanted Spawn to have somebody to talk to. And I wanted Spawn to be – I wanted Spawn to be distracted by something, by the conversation at the point where Angela comes up behind him and goes whomp, which meant that -- I had never written a fight scene. I quite liked the idea of writing a comic with shouting, hitting and running around, which is not something I had written before, but I thought okay, if I’m going to do this, it has to have shape and purpose, it has to be surprising and interesting and I need a conversation.

So was he created as a plot device, well, Angela was created as a plot device. Everybody is created as a plot device, they are part of the story, but yes, he had a function and I assumed that it was a function that would just be the action, again, the action of leaving behind more than I was -- more than I could deal with at that point, but it would give Todd stuff that he could do stuff with.

Q: You said that all characters are characters, some have plot device type of functions at certain times, I don’t want to mischaracterize you, but is that --

A: Well, all characters have plot device characters. The hero is the hero. He has a function in the plot. If he meets a mysterious old man who knows something gnomic, that’s a character too. He also has a function in the plot.

Q: Would you agree with me that there are characters who are more involved in a particular issue or in the ongoing story than other characters? In other words, are there major characters and minor characters?

A: In what story?

Q: In any story, just as a general matter, or are all characters equal in their value to the story?

A: You are talking to somebody who made not only a living, but got huge critical recognition out of the fact that one of the things that I would do continually in sandman was introduce somebody as a minor character and then bring them back several years later as a major character. Characters who came on for two panels would come back six years later.

So if you are talking about an ongoing storyline, there is no such thing as a character who will always be a minor character, because you have a story every month to fill and you are going to want to go back and use them.

Q: In fact, wouldn’t it be fair to say that only until you got to the end of the story would you be able to look back and say well, that character turned out only to be minor after all and never did come back?

A: Yes, but the end of the story would not be the end of the issue.

Q: Correct.

A: The end of the story would be 10 years down the line.

Q: I mean 75 issues as you had in Sandman. You were at Todd’s deposition the other day.

Again, you Did you hear his description of how he ultimately, in his mind, changed the Cogliostro character in future issues from the character that appeared in your script?

A: Yes.

Q: Did you agree that that was an accurate description as far as you know of how Todd treated the Cogliostro character or do you take exception to something he said there?

A: His description of me asking him what I wanted putting in and him saying he needed the Cogliostro character was a lie, this anti-Moses thing. As I recall at the end of the issue, once he had drawn it, he phoned me up and he said “Hey, this Cogliostro guy, who is he?”

And I said “Well, I have got this idea, you know, an old Spawn,” and so forth. He said “Oh, I thought he was Moses.” So I drew him holding this box as if he was Moses going down, with wine, as if he was Moses going down from the mountain.

I heard Todd say he had expanded on the character and made him, he kept saying more of a Harvard man, you know. He said my guy was a lush, his guy went to Harvard, but characters do change.

The most significant change, at least according to the response to our lawsuit, was that Todd had changed the character’s name, which Todd admitted during his deposition had occurred during a letterer’s error, which changed Cagliostro to Cogliostro, and because he couldn’t remember what the character’s first name was, at some point later down the line when he had to give him a first name and didn’t bother going back and checking. So that was what Mr McFarlane testified to at his deposition as to the character’s name.

Q: In any event, you would agree in subsequent issues of Spawn, the character does have a slightly different name than the one you gave it, is that correct?

A: Due to a lettering error, absolutely.

Q: Would you agree that the character in subsequent issues has a personality that has developed in ways that were not necessarily included in your first script?

A: All characters do that.

Q: And so that over time, as you have described in the Sandman circumstances, a character who has a relatively minor role perhaps that might be defined in terms of numbers of panels or pages in which that character appears, at a later point in time, maybe years later, takes on a much more substantial role, is that correct?

A: I don’t understand your question.

Q: Well, I’m just trying to understand the change process you described. You talked about Sandman. And I believe it was your testimony that there are times when you introduce a character who is minor -- and let me ask you a question right there.

When you used the term a minor character who later becomes a major character, do you recall that testimony?

A: As I recall it was you that used the phrase minor character from the beginning, but yes.

Q: Let me ask you. Is that a word we can use just so we understand what we are talking about? And use a different one if I’m using the wrong one.

What I’m referring to, I believe you testified that there were characters that you introduce all the time and they may not have a significant role at the time you introduce them, but that at some point in the future they come back and have a much larger role in the story, is that -- am I mischaracterizing your testimony?

A: An example of that for me might be the angel whose name I remember possibly incorrectly as Gabrielle in issue 9. She is a minor character. In terms of issue 9, there are four major characters in it, given the body of what I wrote. I wouldn’t classify any of them as minor characters.

I would classify the major characters in what I wrote, just by allocating speaking parts, as Angela, Medieval Spawn,. Spawn and Cogliostro. The minor characters would be Gabrielle and the burns in the alley. And I think that’s it for characters in my issue.

In terms of whether any of them would become important, if Gabrielle, the angel to whom Angela goes and-reports at the beginning, had then gone off to get her own series or then turned up in important ways, as she did in -- I put her in my scene in 26, I used her in the Angela mini-series. That’s more taking a minor character and giving them a major role.

Q: Can you give me an example of a character in the Sandman series that was introduced in an early issue perhaps and came back to have a larger role in a later issue?

A: Sure. I created a character called Barbie in sandman 11 or 12.

Q: Barbie?

A: Barbie.

Q: Bobby?

A: B-a-r-b-i-e, like the toy. And she was a ditsy blonde who had a boyfriend named Ken. And they just thought that was so cute. And you got to see nothing of her except that she was one of a dozen people or half a dozen people living in a big old rooming house.

She had this boyfriend named Ken. They thought that was cute. And in one panel, maybe two panels, you saw that she had this strange dream life where she was on this odd quest with a giant dog. And then in Sandman 32 I think it was, it may have been later, it may have been 34, but, you know, several years later I came back and made Barbie this character who had been in a handful of panels and nothing important. She was scenery as far as anyone was concerned.

She got her own storyline, which was called A Game of You. And she was the protagonist. And that, for me, would be taking a minor character and putting them on stage.

Q: When the Barbie character got her own storyline, and she’s in 32 or 34, whatever it was, issue, A Game of You, did she have character traits in that issue that were not apparent in the first issue?

A: Of course. Characters evolve. And if they are going to bear more weight, you are going to change them.

By that point she had started, she had left her husband and had started painting chessboard designs on the side of her face and went off on this strange and wonderful dream quest which was the subject of the story, but all characters change. All characters evolve over time.

Q: Let me ask you about Medieval Spawn, that character.

When you submitted your script for issue 9, did you give that character a name?

A: No. I just said he was -- what had happened on him is I had phoned Todd and said -- and I thought, because Todd had this whole thing with this guy in the Army of Hell. And I thought oh, okay, if you have got the Army of Hell, you don’t just want one captain. This is something that the devil could have been doing for a long time. And that would give you, that would give -- and my main thing was that will give Todd a lot to play with if you get bored.

It’s a wonderful thing not to be stuck in 1992 and having to do all your stories in 1992. You could have some past. You could have some cool stuff. So I phoned Todd up. I said “I have got an idea. Tell me, have there ever been any other Spawn characters in the past.” And he said I don’t know. And I said “Well, could there have been?” And he said “Sure, if you want it.” And I said great.

And so that was my -- so I took that, I went okay, Spawn is in the past, what would be romantic and what would be sort of cool if I was a 12-year-old boy, because that was my sort of, you know -- a lot of what I was trying to do with Spawn number 9 was okay, so I’m 12 or 13, what would be cool to see. And I thought well, a knight in armor.

So let’s do a Spawn who is a knight in armor, and that would be fun. And she can kill him, and it will be 800 years ago and then now she is coming back to kill our guy. So he was the Spawn then.

Q: And he just had the name -- does he have a name?

A: I just referred to him as the Spawn.

Q: And his costume is pretty similar to the modern day Spawn’s, other than it’s a suit of armor appropriate for a knight? I mean, he didn’t have --

A: Other than it’s a suit of armor appropriate for a knight, and not a dark, one piece with chains, it’s the same thing.

The idea that Alan Moore had come up with that I remember Alan telling me on the phone, I don’t think I had seen Alan’s issue before I got to write mine just because of the way -- the speed with which these things were being done, but I spoke to Alan and I remember Alan phoning up and saying I have got a great idea, the Spawn costume is alive.

Todd had asked him if he could come up with an explanation for why Todd kept forgetting and drawing different numbers of spikes and chains and things on the Spawn from panel to panel. So Alan’s idea was well, the costume is alive, which I just thought was a lovely idea.

So I gave him -- I thought okay, we will take something like what the Spawn costume is and then reconceive it as you are a medieval knight in armor, you know. He has a different -- I gave him a little back story in the thing, not much because I didn’t have -- I only had 22 pages to play with, and I had, you know, he had to be dead by page 8, but I gave him a little bit of back story. You got the feeling that he had a similar kind of story to Spawn’s but not the same.

In this case it was his sister who was somebody who -- the person who was still living who was important to him and not his wife and so forth.

Q: Other than the description you gave of him in the script, did you write anything else down or draw any pictures of --

A: Yes, I gave Todd my thumbnails. Sorry I interrupted.

Q: That’s okay. Other than the thumbnails and your description of the character, the medieval, the 800-year-old Spawn character in the script, did you write -- did you draw any other pictures independent of the thumbnails of the Spawn character?

A: I could conceivably have doodled them, but nobody would have seen them but me other than the thumbnails.

Q: So your entire submission for issue 9 was made up of the script and the thumbnails you attached with it, is that correct?

A: Yes.

Q: Did the Medieval Spawn character appear in issue 26?

A: Not that I recall.

Q: Did he appear in the Angela mini-series?

A: I think I put his helmet in there on her trophy room. The only other use that I know of that’s been made of Medieval Spawn was he was a number of toys, and rather to my surprise, Image put out a series with him in which I was never sent, so I never read.

Q: So you never brought him back in a later issue of Spawn that you worked on, is that correct?

A: He was dead. I killed him. The first thing I did was kill him.

Q: What about Cogliostro, did you ever bring him back as a character in either issue 26 or the Angela mini-series that you worked on for Spawn?

A: No, there was no need for him.

Q: So the only characters that you brought back a second time from issue 9 were Angela and Gabrielle, is that right, as far as you know?

A: Yes.

Q: And of course Spawn appears?

A: And Spawn.

Q: But Spawn was obviously created prior to issue 9, is that correct?

A: Exactly.

Q: Would you agree that the character that we have been calling Medieval Spawn was a derivative work of the Spawn character, the original Spawn character?

A: Absolutely.

Q: But Angela and Cogliostro were not derivative characters, is that correct?

A: Yes.

Q: There is no earlier incarnation of either of those characters in Spawn issues 1 through 8, is that right?

A: Not at all.

MR ARNTSEN: When you hit a chapter break, let’s stop for lunch.

MR SALSICH: Yeah, I’m thinking this is actually a good time. Let’s do that.

(A noon recess is taken)

(11:40 a.m. to 12:45 p.m.)

Q: Mr Gaiman, before we took a break, we were talking at some length about what we had agreed to call the 1992 agreement. Do you recall that testimony?

A: I do.

Q: And I suppose we just, since we have all taken a break and gotten back into our conversational mode, we should remind ourselves that, for the record this afternoon, and I’m going to try to move things along more quickly this afternoon with specific questions and show you some documents and so forth, if we can try to pay attention to those formalities, it will make things go faster and make a cleaner record. Is that okay?

A: Absolutely.

Q: And I just want to clarify a couple things that you stated. You testified, did you not, that the first time you had a conversation with Todd McFarlane about specific financial terms related to the 1992 agreement was either in 1995 or 1996, is that correct?

A: Yes.

Q: So at the time you were entering into the 1992 agreement with Mr McFarlane, you never discussed any particular percentage royalty rates that might apply, did you?

A: No.

Q: And you never discussed what would be done in the case of reprints, did you?

A: No.

Q: And you never discussed even the possibility of toys or action figures being created based on any of the work you were doing, did you?

A: I remember at one point in those early days, Mr McFar1ane said that he would have to trademark the characters in his name because of the toys and I didn’t have -- but that I shouldn’t worry about that and I said fine.

Q: When was that conversation, do you know?

A: That was sometime in early ‘93. I don’t remember when he got the toy company actually together. I remember it as being early ‘93.

Q: Was this before or after issue 9 was completed?

A: I don’t know.

Q: Do you recall anything else about that conversation?

A: Just that it was in there with a lot of other stuff, but I do remember, that was the only recollection specific I have to toys of those days.

Q: You didn’t talk anything specific as to if a toy is created based on one of these characters, that you would get some percentage of the sales of that toy, did you?

A: I remember him again saying “Hey, I’m going to look after,” you know, he said I’m going to do toys and saying that he would look after me, but there was no specific figures mentioned and I assumed his good faith.

Q: I understand. Sometimes lawyers, we’ve got to get to the specifics. Certainly if an generally helps us get to those specifics, please let me know.

The 1992 agreement that we have been talking about, was that, as far as you know, was that limited to your work on issue 9?

A: Limited to my work on issue 9 and any use that Mr McFarlane made of it.

Q: Of issue 9?

A: Yes.

Q: What about issue 26, did you not submit some work for issue 26?

A: Yes, and I assumed that we were in the same, having heard nothing to the contrary, I assumed we were still in the same ballpark.

Q: Would that be true also of the Angela mini-series, the work you did on that?

A: Absolutely.

Q: When you were doing issue 26, was that around 1994, do you know?

A: Around then.

Q: And the Angela mini-series came around that same time, did it not?

A: I wrote that stuff together. In fact, I may have even written the bit for 26 after I wrote the Angela series, just going, I really wanted -- there was a little piece of bridge information that I really wanted in the storyline, which I hadn’t been able to put into the Angela series because it hadn’t started there and I just wanted to set things up.

Q: And so the Angela mini-series and the work you did on issue 26, those would have been 1994?

A: Yes.

Q: Does that sound right? So in any event, prior to the financial discussions you had with Todd McFarlane in 1995 or 1996, correct?

A: Yes.

Q: And so the work you did on the Angela mini-series and the work you did on issue 26 I as far as you knew, was done on the same terms as you had agreed in 1992 with Todd regarding issue 9?

A: Yes.

Q: When you started having the conversations with Todd in 1995 or 1996 -- and let me ask you specifically. Have you had a chance, since we had this conversation earlier this morning, to determine whether your meeting with Todd in Phoenix was in 1995 or 1996?

A: The meeting was in 1996. There may have been conversations that led to the meeting because otherwise I can’t imagine, it’s much more me going, you know, I wouldn’t have just flown out to Phoenix, to sort it out face-to-face if we haven’t had phone conversations or I was obviously not satisfied with the way things were going on the phone.

Q: When you had your meeting with Todd in 1996 in Phoenix, is it fair to say that’s the first time you and Todd discussed specific financial terms that in your mind should have applied to the 1992 agreement?

A: Yes.

Q: At that time did you -- well, tell me at that time what you told Todd, if you can remember, that the terms should have been?

A: Well, what was happening -- let me just preface this by what was going on at that point.

Q: Please do.

A: In the meantime Todd did a Medieval Spawn toy. It was one of his first rollouts of the toys. He credited me, unasked, which I thought was very nice of him as the co-creator of the character on a comic that came out with the toy and later sent me a check for $20,000, which although it didn’t come with any breakdown of how it was derived, and in fact, I think just came with a helpful note “This is for Todd because we love you,” or something like that, I was told on the phone was my royalty share of the Medieval Spawn toy, which I thought was really cool.

And then Todd -- then I wrote the medieval, the Angela series

Q: Let me stop you there if I can. It’s your recollection that the Medieval Spawn toy came out and that you received the $20,000 check --

A: It was 20,000 six, there was a bunch of figures.

Q: Okay. I realize that it may have a different, 20,800 and something dollars and something cents, we are referring to the same the payment you received for the Medieval Spawn toys, right?

A: Yes.

Q: I want to get a timing here. If I understood you correctly, your testimony is that those events occurred, the toy being produced and you receiving payment for it, Medieval Spawn, was prior to your writing the Angela mini-series, is that correct?

A: That would be my recollection. It may have occurred about the same time.

It would be easy enough to check. I mean, it will be in the documents.

Q: So in any event, so go on, you were saying you got this money for the toy and lead me up to of you getting to Phoenix.

A: So I have been paid money for the toy, don’t know how it’s been arrived at, but it’s $20,000 and that seems a fair amount to me and Todd seems to be living up to his hey, you can trust me and I’m looking after you side of the deal.

Then 1995, late 1994, early 1995, the Angela toys are out. I remember being incredibly proud when they made the cover of USA Today as the most inappropriate toy of the year, according to the American Family Association. And I would hear from Todd that they were selling incredibly well and that they were incredibly popular, cool, the Angela toys.

And I thought great, I will get a royalty on these. Nothing ever happened, no payment ever came in. I would ring Todd’s people and say “Is there a payment,” and they would go “Oh, yeah, yeah, don’t worry about it, we are not businessmen here.” Todd would say that a lot, that he wasn’t a businessman, he was a creator and you just had to bear with a certain amount of disorganization and his funny way of doing things. So I waited. Never saw any royalty.

I had written the Angela mini-series. And the main reason I had actually written the Angela mini-series was my son, Mike, at that point was 13, going on 14, if memory serves, and he had found a copy of Spawn or he had found one of these Medieval Spawn toys and said this is really cool. And he started asking me, you know, “Dad, why didn’t you write something I could read. I love this Spawn stuff.”

So I found Todd and said “Okay, I think I’m – it looks like I’m going to be writing another series for you. Let’s do Angela. And let’s do it as a three issue mini-series . “ And Todd said great.

And really it was just written for Mike. The last issue, in the letter column we put a photo of his hockey team, which he loved, so --

Q: Tell me again, so moving forward again and --

A: Sir, I really was on the way.

Q: I apologize for interrupting you. I don’t want to -- like I said, I do want to get through some things by five today.

A: I’m sorry.

Q: That’s all right. Because it’s all important. It’s all part of the story. But you have got the Angela things coming out?

A: Anyway, Angela comes out. I hear from them. Todd didn’t like trade paperbacks. Todd had said to me several times just in conversation there were things he didn’t like and he didn’t like trade paperbacks because they weren’t proper comics and he didn’t trust them.

And meanwhile, I was making a huge part of my income from trade paperbacks and saw that there was an enormous demand for them. So at one point in there they said we are going to be bringing out Angela in trade paperback. And I said great, we should work out a royalty deal on this. I said -- I was feeling less comfortable by that point with the idea --

Q: Let me stop you right there. You just said that you found out that they were going to do an Angela trade paperback of the three issues that you had done, is that right?

A: Yes.

Q: And you said “Great, let’s work on a royalty deal,” is that what you just said?

A: Well, I said to them what is the -- do we have a royalty deal on this. Up until that point the only the way that things seemed to work was one would get these checks and they would say here is a check for $800 because Todd thinks you are a good guy. And I actually saw in the press at one point an interview with Todd where he was saying no, we don’t do royalties, we just send people love checks and they are better than any royalties could ever be.

So I didn’t trust the love checks and I went out to Phoenix. I talked to Todd. I do remember talking to him. I have no recollection of what the substance of the conversations were in ‘95.

Toward the end of ‘95 about I think I was getting a little bit testy here, I felt like there were no checks coming in, he had these things and he was not paying and there seemed to be no real effort to pay.

And I was concerned that, as I said earlier, that Todd could either sell the toy business to Mattel or he could get hit by a truck and there would be no paper records of any kind of deal and I thought we needed to memorialize it.

Q: So you thought in 1995. you have now seen the Medieval Spawn toy you got a check for, but now later there is a Angela toy that apparently is very popular, but you have not seen a check for that, is that correct?

A: Yes.

Q: And the Angela trade paperbacks coming out and it occurs to you that now it’s time to figure out what your royalty arrangement is with Todd because the actions that Todd has taken in the last three years don’t tell you what your royalty deal is, is that correct?

A: Yes.

Q: So then you have your meeting in 1996 --

A: Yes.

Q: with Todd and that meeting is in Phoenix?

A: It is.

Q: Do you recall what time of year?

A: I think it would have been late spring, very early summer because I had just come back from England where I had made a TV show and I remember I had a tape of one of the episodes with me.

Q: I was going to ask you if it was hot, but that really wouldn’t help you in Phoenix.

A: It was very, very hot.

Q: Well, that tells me it was spring as opposed to hot in January. Okay.

Now, you are up to this meeting in late Spring of ‘96 and this is when you and Todd sit down and start hashing out --

A: We sit -- we are not at this point in any way -- it is not in any way adversarial at this point. It’s me going in and saying look, you said when we started this whole deal, you would take better care of me than DC did, we have to put something down on paper. You could sell to Mattel tomorrow, you could get hit by a car tomorrow, I don’t trust your wife to send me love checks or to know what they are for, I have created characters for you, you are using them, if you go on to do TV or movies and put them in, there is a whole other world out here that we have yet not gone into. Let’s get this down on paper.

Q: So is it correct to say that at the time you meet with Todd in Phoenix, you two do not have a deal regarding future movie rights, you do not have a deal regarding future TV rights based on the use of these characters, would that be correct?

MR ARNTSEN: I’m going to just object as vague. He said in terms of the DC Comics I have a deal in terms of general terms as opposed to say five percent of this or for this.

Q: That’s fair. Let’s do it this way . Let me ask you another question or two, then maybe I will hand you some documents and we can start focusing in.

A: Okay. Shall I finish about the Phoenix meeting?

Q: Please do.

A: Okay. And Todd kept saying “But you can trust me and I will send you, I will send you bigger checks than you will get if you have a contract.” And I said “Todd, call me silly, but I would much rather have a written contract and $500 in royalties than $1,500 that is going to turn up on a whim and could end the moment that you decide it’s not convenient.”

And he said that he thought that was crazy and I said that that was how, you know, just assume that was how I was billed. And we then wound up – then everything ended very badly in terms of Todd had to wrap up rather quickly. Larry Marder had come out for that meeting because they just learned that Marc Silvestri had left the Image partnership that day, so they had to sort of get on the phone and try to sort that out.

The way it was left, ended was Todd saying “Do you trust me?” I said “I trust you completely.” He said “Good. Then I will work this out in a way that is going to be fine.” He said “I’m really pleased you came down here. You have been completely reasonable and we will sort this out.”

And he also said that, he mentioned to me he just bought Miracleman. And he said “What are you going to do with Miracleman? What are you thinking about.” And I said “I don’t know at this point.”

And he said “Well, I have had lawyers look over the agreement that you made with Alan Moore and we think we could break it, but obviously we are going to honor it. So you have -- you know, we are going to respect your third of Miracleman, but we need to figure out what it is and it may be a bargaining chip.” And I said “Well, that’s fine.”

Q: Let me get this straight a