"HGGC Explores $4 Billion Sale of Typeface Firm Monotype"

Ray Larabie

A positive result of HGGC considering Monotype's sale is this scintillating thread. Meow!

Dusan Jelesijevic

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JoyceKetterer

My gut says there's a lot of debt and a lot of puffery to this price.  I think that if they really thought they had increase the value this much they'd be taking it public again, not going for a private sale.  I hope we get an inkling what it actually sells for... I'd not be surprised at all if they are hoping to sell to Adobe or Microsoft, in which case they are public so we'd get some information.

John Hudson

I suppose Adobe might be interested in having the fonts, but not at a price that would require them to adopt Monotype’s aggressive policies: the whole Adobe Fonts model is based on frictionless use, avoiding license policing.

I am pretty sure Microsoft would have zero interest in acquiring Monotype: they’re not even leveraging most of the MT fonts for which they acquired rights in the 1996 bail out.

Flipping to another PE firm seems the most likely outcome (other than failure to sell, which would presumably be dressed up as a decision not to sell).

JoyceKetterer

@John Hudson Just because I think that's their hope doesn't mean I think it's likely to happen.

Miles Newlyn

As I understand it any foundry signed up with Monotype has to accept their new terms, which is just a button in the path to their improved foundry dashboard.
These new terms give MT the right to first refusal should the foundry be sold at any time - including gifting to successors, or doing anything with it besides selling to MT.

This would be a factor in MT's valuation.

Nadine Chahine

A few months ago Monotype Fonts was marketed as having 40,000 fonts. Now it's 150,000 so it looks like a lot of foundries have accepted the new terms.

Justin Penner

Miles Newlyn said:

As I understand it any foundry signed up with Monotype has to accept their new terms, which is just a button in the path to their improved foundry dashboard.

No one is being forced into the new agreement, but they're pushing it pretty hard. I'm still considering whether to sign, but in the meantime I'm still able to sell fonts, get paid, and upload new fonts. But for some reason, sales reports are literally blurred out with a message saying you have to sign the new agreement to unlock the sales reports feature. This seems to be a breach of section 3(c) of their previous contract, which states that Monotype must make reasonable efforts to display sales reports in real time.

Miles Newlyn said:

These new terms give MT the right to first refusal should the foundry be sold at any time - including gifting to successors, or doing anything with it besides selling to MT.

Not exactly a first refusal, but it was a requirement to notify Monotype in advance if you intend to sell your foundry. Interestingly, I remember this being in the new agreement, but it's not included in the latest copy I'm looking at.

Justin Penner

Justin Penner said:

sales reports are literally blurred out with a message saying you have to sign the new agreement to unlock the sales reports feature.

I contacted foundry support and they've fixed this. It's still blurred on the dashboard but the earnings report tab is working now.

I think the biggest problem I have with the new agreement is that foundries are required to upload their entire retail font library and all future releases. What if you're an independent type designer that releases some of their work through other foundries? That door is now closed. What if you want to submit something to a specialized marketplace like Future Fonts, where it doesn't make sense to release through other distributors? That door also seems to be closed if you sign the new Monotype agreement.

Ray Larabie

I think the biggest problem I have with the new agreement is that foundries are required to upload their entire retail font library and all future releases. 

There exist unforeseen situations which could inadvertently lead to a breach of contract. Historically, I have facilitated the sale of custom font variations specifically tailored for CNC metal cutting machines through specialized platforms. Although these variations may seem niche and not viable for wider application, not presenting them to Monotype as stipulated would, indeed, constitute a breach. Or it least it seems like that; I'll get to that later.

In the early 1990s, the prospect of web fonts was largely unanticipated, yet they evolved to become an integral format in subsequent decades. We must consider the potential for new, yet-to-be-conceived markets. Under the terms of the present agreement, signatories would be compelled to submit fonts pertaining to these unforeseen markets to Monotype.

My primary concern with Monotype's new agreement is its capacity to hinder the evolution and adoption of novel distribution methods. Emerging platforms might face difficulties in attracting foundries due to the potential contractual implications with Monotype. For instance, engaging with a new distribution platform might necessitate confidentiality agreements, which could seemingly conflict with obligations to inform Monotype of engagements with rival font subscription systems. While the legal intricacies of such scenarios remain unclear to me, the perceptible implication could be a breach of Monotype's agreement. Smaller font foundries, without legal consultation readily available, might err on the side of caution, thereby sidestepping emerging opportunities in font distribution.

In my perspective, this agreement seems to represent a regression in fostering font industry innovation. Given that a significant number of foundries affiliated with Monotype have likely acceded to this new agreement, the broader implications are already in motion.

Andreas Seidel

I ask where the opinion comes from that many foundries and designers have accepted these new contract terms. Some of the terms may be valid for the U.S., since immorality is very rarely found by American courts. For other jurisdictions such as Europe or Germany, this is not the case. Here, some of these contract clauses would most likely be void.

For astype fonts, I can say that the new contract terms will not be signed. Current font updates and new fonts will no longer be available on MyFonts.

Nick Shinn

I haven’t signed the new contract, and don’t intend to.
It’s sad, as MyFonts enabled my type business in the first place and was its mainstay for many years. But there is no loyalty in big business.
FontShop, Monotype and Fonts.com were also my distributors.
So, no new Shinntype fonts there, and I’m considering whether to dissociate completely.

Patrick Griffin

Nick, that was a long time ago. More than a dozen years, an eternity in internet time. When John Collins ran MyFonts, he actually listened to suppliers and made sure to take care of them. He also surrounded himself with a dream team of people who actually cared about type. I suppose part of it was that he wasn't beholden to some generic investors on a valuation deadline. For all the mud the industry threw at Bitstream back then, they were a real type company making type and type tools. John and his team were unique on many levels, and quite a few font makers owe them a lot of goodwill.

I think the majority of the smaller foundries on the Monotype platform signed the new agreement, simply because they don't know any better and/or their options aren't that many. This really underscores the need for some kind of independent organizing, so we can at least reach out and keep each other informed about the underlying reasons for certain changes in the industry, and make decisions accordingly. Not that I'm holding out any hope for that, not anymore. We're too divided and caught up in our own fault lines to be able to contend with too many currents from too many directions. Rome's already in embers, and now we're just watching a few fiddlers play the score. 

Some of us here are quite privileged to offer some value to this conversation simply because we've been doing this long enough to have some kind of rolodex or buffer that can carry us through the next few years. We really shouldn't let our privilege colour our perspective, though. Watching young talented people try to find any kind of opening into the industry over the past 5 years has been quite wrenching. The prospects of this industry seem dim, along the lines of something very resonant Chris Slye said earlier in this thread, about how fonts have simply become "content" — meaning Palatino and some cutup doodle junk now have the same value because they're both font files, mere data, and the one with the most files wins. Well, we must have screwed up somewhere to end up in this strange game. Either that or we were too distracted by something to notice the rug vanishing from under us.

Sorry about the rant. I must have been bottling it up for a while.

Caren Litherland

This.

This really underscores the need for some kind of independent organizing, so we can at least reach out and keep each other informed about the underlying reasons for certain changes in the industry, and make decisions accordingly.

What do you suppose would happen if

• customers declined to license anything from PE-funded companies;
• foundries declined to join forces with PE-funded companies; and
• workers (even when they’re called “managers” or “directors”) declined to work for PE-funded companies (easier said than done, I know, since some people have family members to support, don’t benefit from other sources of income, etc.)?

🤔 

Igor Petrovic

I belong to those who think that customers would be willing to purchase directly from type foundries (or from stores that would be marked as fair by the type design community) if they were properly informed about the current situation on the market. They get the same product at the same price, yet they make an act of activism, which is an emotional bonus. At least I would feel that way if I were a properly informed customer.

Patrick Griffin

Caren, I wouldn't malign PEs just because they're PEs. Some PEs are happy to remain hands-off and are just fine with a steady return on their investments. Some even contribute to industry growth without any kind of valuation/flipping mandate. Our issue here is with the past and current owners of Monotype. This is the nearly irreversible damage they have done so far, in no particular order:

- Normalized unsustainable and high-handed licensing terms that have driven millions of users away from commercial fonts. It would take a series of miracles to bring those users back now.

- Normalized draconian one-sided supplier terms and return rates. Now the entry level into professional type design for newcomers is too many dead ends and uphill battles that pretty much everyone gives up within weeks or months of trying.

- Bought up the most popular font libraries and outlets, dumped them all in one big pot and turned them into the equivalent of a penny stock exchange. Now the remaining distribution outlets have no choice but to try and emulate that behaviour, but of course they don't have the staying power big money has, so by emulating Monotype they're in effect driving themselves off a cliff while whistling past the graveyard.

I can tell by your suggestions that you're optimistic that something can still be done. Your suggestions have been proposed many times before, and every time they ran into some kind of wall. I think educating font users on the benefits of directly supporting the indies may work to a great extent, but it requires some solidarity between foundries — real solidarity, not the usual lip service we encounter here and there — and willingness to put time and money into it. But I'm sorry, I think we're too fragmented and it's probably too late. Monotype is just one symptom of a much bigger malaise sweeping the world right now. I hate to think of how we will be perceived 50 years down the road.