You know, John Byrne's going to hate my guts for this...

For the past couple of years at the main UK comics festival in Bristol I've put on - and written the script for - the Hypotheticals panel, which presents industry professionals with hypothetical situations at a fictional comic book company. Things like the relationship between an artist and a writer and what a company might do if it suddenly discovered it never owned the rights to its flagship character.

This year we ran it again and I was asked the following questions:

You've just been appointed as the new chief financial officer of Wonder Comics. A new proposal comes to you that will mean you can publish some new titles, but only at the expense of the cancellation of middle-ranking books, titles that are making profits for the publisher. Couldn't you publish both sets of books?

And then:

Would you recommend the cancellation of a book the moment it starts losing money?

In this essay I'll take a look both at the answers to these questions and to the inevitable question that wasn't asked: When would you not cancel a comic book that was losing money?

I promise that there are few accountancy references in here. Remember though that this essay can cause drowsiness and should not be read while operating heavy machinery.

Couldn't you publish both sets of books?

The answer to that is a simple "No." Well, to be precise, "No, not necessarily." Like any large commercial organisation, a major comic book company operates under a main corporate budget. The budgeting process is a long and arduous process that I'm not going into here, but there will be a budget. Trust me on this.

'Any large commercial organisation operates under a corporate budget.' And as part of that main corporate level budget, there'll be a budget for staffing, a budget for light and heat... and budgets for creators and printing costs. As CFO, I'd need a very good reason to authorise an overspend of those budgets. And for a start, it may not even be possible to get extra printing facilities... or there may not be the staffing resources available... or...

So, no, the company won't be able to print two books using the same budget. If a new book will make more money than another currently published book, then, given that both books can't be published together, I'd want to publish the replacement book in order that the company can make the most money.

Further, if the book is part of a 'family' of books, all dealing with the same character(s), then if the company decides to take the characters' adventures in a new direction, a decision might be made to cancel one book in the line that is thought to be peripheral or even detrimental to the new direction.

And if the management of the company/line believe that (a) that all or some of the readers that were reading the cancelled book will transfer to the non-cancelled books in the line, thus giving you 'free' revenue for no additional cost; and/or that (b) the tighter line (with fewer books to link to continuity) will attract more readers, then it's their responsibility to act for the benefit of the company, and cancel the 'peripheral' book.

I loathe clichés - in fact I avoid them like the plague - but at the end of the day, my responsibility as CFO isn't to the editors or to the creators - other than making sure they get paid! - or to the readers of the books, but to the company and its owners. My responsibility (the same responsibility that any CFO with a shred of integrity has) is to safeguard the long-term financial security of the company, which means my ultimate responsibility is to the stockholders.

The editor's job is to get the damned book out of the door and onto the stands. My job is to make sure the company's still around in a year's time. And in two years. And in three years and in... well, you hopefully get the point.

And in that vein, let's address the second question.

Would you recommend the cancellation of a book the moment it starts losing money?

The flip - though completely honest - answer I gave at the panel was: "Nope. If I wait until it's losing money, I'm not doing my job. I'd cancel it long before it reached that stage..."

Oh boy - did this get some looks from the audience that could curdle milk. But it's true. I'd pull the book while it's still making profits. And sleep well afterwards as well.

'I'd cancel a book long before it starts losing money.' There's no way that a company can support a book that's losing money. Now, hold it a minute, I hear you scream. What about fan reaction? Well, fan reaction is all very well, but why is the company in business? To lose money? Of course not.

I have to address something here that most readers either don't realise or don't want to realise:

Comic books companies are not in business to make comic books.

They're in business to make money.

So, a comic book that's making money for the company will always be published, right? Wrong. As well as the reasons above, we need to deal with one more thing that is misunderstood: the idea that if a comic book is making a dollar of profits, then it's making 'satisfactory' profits.

Uh-uh. Erroneous. Mistaken. Incorrect. Wrong.

Why is it so wrong? Well, take a simple example. Forecast numbers show that it will cost £30,000 of resources to create the first three issues of a comic book and that you will get £31,000 worth of revenue in the nine months from start to finish to complete that process. That's £1,000 worth of profit. In the same time, you could invest that £30,000 in the bank and get, say, 5% per annum interest. 5% of £30,000 x 9/12 = £1,125.

The company would be better off financially just investing the money in the bank! Well, again, not necessarily. (For a start, it's ignoring the difference between resources/assets and 'cash', and it's also ignoring that the book may make larger profits as it continues.) But at its most simplistic? Yes.

It goes back to what I said earlier: If a new book will make more money than another currently published book, then, given that both books can't be published together, I'd want to publish the replacement book in order that the company can make the most money.

Now, the editors of the books will, hopefully, fight to keep the book. Why "hopefully"? Because if a responsible person (and I'll be generous and describe editors as responsible people) within the company doesn't believe in the product of the company, then you might as well pack up and go home.

'If the editor doesn't believe in the product, you might as well go home.' But if one can make more money using the resources to do something else, why would any comic book company publish (or continue to publish) a book that's losing money?

Now that's far more interesting. And there are four basic reasons, all of which are to do with the company ultimately making more profits:

1) The editor fighting tooth-and-nail for the survival of the book has a good track record on turning books around. If an editor has that good track record, then it would be a foolish 'suit' that ignored it.

2) The company may be happy to run the title as a "loss leader". If the company has a project for which large profits are foreseen, the company might well allow a linked title to make less than required profits.

3) Linked to both (1) and (2), if the company has an 'event' planned and the book is to play a part in that event and to be promoted heavily to that end, then yes, the book would probably be kept on.

4) Two reasons that are really the same. If a book is losing money and is to be cancelled, the publisher may allow the book to be continued long enough to complete an ongoing storyline. But in this case, the book is still going to be cancelled. All that's being postponed is the date of cancellation. However, a company may also allow a book to be continued in the short term, if there is a relaunch planned with a new creative team and new direction.

It's important to realise that in all the cases above, (to publish or not to publish) the decision is linked to contribution to profits for the company in the long or medium term. Anyone that makes business decisions based solely on the short term is thinking like the guy who jumps off the Empire State Building only to shout as he plummets past the 17th Floor, "I'm doing fine so far..."

Lee Barnett is an accountant and comic book writer. His first story for Marvel appears in X-MEN UNLIMITED, due on the shelves in August.

This article is Ideological Freeware. The author grants permission for its reproduction and redistribution by private individuals on condition that the author and source of the article are clearly shown, no charge is made, and the whole article is reproduced intact, including this notice.