I'm looking forward to comments from those who have been through this, but interested to hear any one's opinions on it.

An Indie team builds a game.

They had no real discussions on money..

At some point, they decide to release, and suddenly money comes pouring in, however unlikely.

How does the team settle where the money goes?

What I've seen, is that everything is split evenly, with the company itself usually being one of the splits (I.e. purchasing servers, licenses etc..)

But that doesn't always seem like a good idea. For instance lets take a random 7 person team. 4 of them are doing a relatively stable amount of work. 2 are clearly exceeding the others, and one was barely available, but still got some work in. How do you approach those things?

Thanks.

Or, how do you approach it early, if its not just split evenly?

1.An Indie team builds a game. They had no real discussions on money..

2. How does the team settle where the money goes?

3. Or, how do you approach it early, if its not just split evenly?

1. That is a potentially fatal mistake. They really needed to execute a collaboration agreement before it came near making any money.

2. Each individual hires a lawyer, and after the smoke settles, the lawyers have a sizeable chunk of the money.

3. Negotiate a collaboration agreement!

http://maientertainmentlaw.com/?m=200811

http://sloperama.com/advice/article58.htm

You approach before you start the project and setup up some % for each.

Or you will have to distribue the money equily, even if the work was not done equily, in luck of this kind of discussion.

You are going to need a good lawyer in contract law for this one! Serious!

I feel strongly that anytime money is gained by sales or investment, everybody who worked should get paid something . The ideal is that everyone be paid as they go, though it might not be practical, so you should try to allow for some earnings with any funds which arrive. Everyone's time is very valuable in terms of money.

That being said...

With unequal work accomplished, especially very unequal in this case, then I say NO WAY on equal payment long term. However, a contract can stipulate a small amount short term for everybody split evenly on the first payment. The remainder should also be negotiated.

Each person should have kept track of their own hours spent on the project (as I always do) by items, including the leader. This should have been verified every week. With lack of such foresight, I recommend that everyone estimate their time spent and also what percentage they feel was contributed. Have a conference to discuss it. Vote on each person's contribution. You might have it very tough to come to a consensus, but the lack of strategic foresight on the part of the leadership caused all this or lack of strong leadership. Work hard and be sensitive to resolve these issues and do so contractually, making clear that each person consents to the payment amount.

A contract should express what each team member agreed as a future payment plan. Here is going to be a lot of discussion.

Once everybody agrees to a payment plan, then get it contracted, signed, and notarized as soon as possible.

Now that this has all come to light, strong leadership is more important than ever and the survival of the organization is in the negotiations. This is a critical time to resolve past unpaid work and create a plan for fair future payment.

As above, you're talking about a business, and running a business by the seat of your pants is not wise. Besides all the problems with the team/money/etc, you really don't want to be negligent of business or taxation laws and end up in court...

The income from selling a game goes to the company selling it. After that, the company can decide how to spend it. If the team members are shareholders then they can all have influence on these decisions. Any payments from the company to team members will have to be done in accordance with staffing/contracting laws of your country.

I'm thinking on the lines of, splitting the first amount of money that comes in equally and then actually having a discussion about further payments (ie, fire the guy that did nothing, stablish % for each member and such).

I think under common law in the US each contributor would be considered a partner in a defacto partnership and they would have to split things evenly regardless how much work each person does. Each would be on the hook I think for taxes too as a partners in a defacto partnership are jointly liable. Partners also implied duties to each other regards to the business/partnership.

So it could be messy as indicated above.

(I am not providing legal advice)

I can hardly imagine such a situation. Even if you didn't have a clear agreement initially, releasing the game to the market commercially should cause at least one of these 7 guys to think "ok, but who will get the profit?".

Still, if something like that happens, then in my opinion - you work as a team, you release it as a team, you split on even terms. If someone was underachieving, you could have kicked him out before. You didn't? Seems you needed him after all. Evaluation of everyone's contribution into the project will be a pain in the ass and you will probably regret getting into this long before it is settled.

Also, if a team achieves a success, it is probably wise to keep it together instead of arguing over some cash. The team should think ahead. If this game gave them a lot of money, the next game might work out as well, meaning more money. This time, maybe with some initial agreement of profit splitting.

Well, my 2 cents.

First, you will have to pay taxes first... I don't know how it work in the US but if it is not done yet, you should declare your activity (as a bunch of freelancer ? a limited ?) and the income (in France we also have to pay social taxes and other taxes).

Then, if their is money left, refunds each one for the expenses directly related to your project (you talk about licences, server etc, so you must have kept the receipt -maybe the bank report will do this time ?-)

Then, if their is still money left, divide equally. You didn't talked about how to split, too bad, but for the next project you will settle an agreement about that.

Thanks for the insights and ideas everyone. This was helpful. I had another question on how it all relates to a team of Minors (in the US) but I posted that as a separate question, and I'm letting you know in case you have input relating to that.

http://www.gamedev.net/topic/639115-project-team-are-all-minors-ideas-on-handling-incomefinances/

Thanks again.