So I'm a university student wanting to pursue a career in screenwriting. Recently, I've just gotten hired to write screenplays for an internet media site, which is huge for me because it will be the first time anyone has ever paid me to write. I've already gotten my first check in the mail, which they gave me for the spec script I wrote for them when I was being hired. Anyway, I now have a contract, and it only needs to be signed.

Here's my predicament-

I can get paid either of two ways:

1) I can either be paid $30 per episode for each bit of my writing that the production company uses in an episode

or

2) I can be paid .03% net lifetime profits for each episode in which my writing is used

It's a startup internet media site, so obviously not hollywood, but hey, it's a start. My predicament is just which payment option to choose. I've always been told by my screenwriting professors to get as much money up front as you can for your scripts because typically production companies are able to manipulate the books so that you won't get residuals, even though they're in your contract. Also, I don't know how well this site is going to do. So if I were to choose the residuals option, even though I would continue to receive payment for my writing, there is no guarantee that the series will make a profit period, or even a profit that is substantial enough to matter.

On the other hand, if I choose the $30 buyout option, then I am guaranteed payment for my writing, but there's always the chance that the series will do well and that I'll be limiting how much payment I receive to only the $30.

And given, it's not anything major or anything. I'm not ever going to be looking at 1000's of dollars or anything, but it's a start, you know? I just want to stay humble about it.

So anyway, which should I do? I don't know, but I need to figure it out soon so I can get this contract back to the production company.

I'd say take the $30 and if the site really hits it big, try and renegotiate later. For now though? Take the money and run.

Second, I like the suggestion of asking for $30 plus .01%. That way you cover all your bases.

Second, take the money and run. How much they will negotiate depends on what your resume looks like now. If this is a first paid job, and it sounds like it is, getting your foot in the door may be more important.

Hay don’t forget us. When you get “rich” you can throw a large party for all your Hatrack River friends, and DON’T forget the booze.

First, just getting the job is a Big Deal--congrats.

You'll get the writing credit regardless of how you're paid, so the question really is, which way to get paid?

While I haven't dealt with contracts in the entertainment industry, I have worked with industrial contracts. The first thing I'd say is, contracts are precise things, or should be. Oversights now could mean tears later. So I'd suggest some precision in thinking about it.

A contract can't be "pretty legit". It's either clear and fair with regard to your interests or it's not. If you get anyone to look it over for you, they should know what they're doing.

What does "$30 per episode for each bit of my writing that the production company uses in an episode" mean? What's a "bit"? A paragraph? Scene? Gag? If they use two scenes in one episode is that $30 or $60?

There's a similar problem with ".03% net lifetime profits for each episode in which my writing is used". How much of your writing can they use before having to pay you? A sentence? A gag?

Also, as Stagecoach says, "profit" is a very slippery amount. It's what's left after they've taken tax, bank interest and expenses out of gross revenues. Unless "expenses" is well-defined in the contract, a percentage of gross revenues sounds better. (Watch out for weasel words like "reasonable". One person's "reasonable expense" is another's "renting a Ferrari for a day is not a reasonable expense!")

Whether it's a percentage of gross or profit, some commercial contracts I've seen include giving the supplier (you, the writer) the right to have the customer's accounts professionally audited (at supplier's expense) to assure that revenues and percentages are calculated correctly and fairly. Not all, though, because some people interpret the request for the right to audit as tantamount to saying, "I don't trust you"--not, perhaps, a good way to establish a relationship of mutual respect.

Renegotiation has been mentioned. I think that would be hard, very hard. If the Writers Guild of America find it tough to renegotiate their deals for residuals, how hard would it be for an individual? If the venture is successful, your motivation to renegotiate is clear: you'd like a larger slice of the action. But where's their motivation to renegotiate? They have a contract with you, and now they're fat and happy. Someone mentioned get-out clauses, and this is one reason to think about contract period, termination and so on.

If the venture is successful, and you find a way of getting them back to the negotiating table, where are the negotiating strengths? Theirs is clear--a successful show. Yours? Your strength will be as good as your standing in the writing team. If you're a key writer, if the show can't continue without you, maybe you'll do well. But if you're replaceable, it'll depend on how much they like you.

Money now or the chance of money later? If you need the money now, take it. If you can live without it, and if you're sure the show will be a winner, go for the percentage--and check when the contract says it's payable. Annually? Monthly?

If you think there's a good chance the show will fail, take the money now (and maybe ask yourself why you're bothering). It's a bet, there isn't a certain answer. That's how business, including the entertainment business, works: if you invest in a new idea and it makes money, you reap the rewards--and if it fails, you lose the investment.

That's why KayTi's idea is often the best way--take enough money now to pay the bills, and hope for some residual gravy later.

If it's succesful and if they renegotiate, they'll be reluctant to match the offer of residuals you have now, bcause they took the risk and they'll expect that to be recognised, by giving you less than the 0.3% on offer now--unless you turn out to be really, really good.

I'm not sure what screenplays for an internet media site means, but everything internet is risky IMHO. For every internet scheme that makes money there are a hundred or a thousand that don't. The dot-com collapse was driven by business models that were presented as radical, the way of the future, when really they were just modern South Sea Bubbles. This would push me towards taking the money now.

A final thought: If I could live without the cash now, and if in my heart I believed in the show and trusted its directors and producers, I'd take the residuals because that would motivate me continually to monitor what audiences like and do not like, reflect that in my writing, and make the show a success. I'd be a part of the team who believe in the show and make it a success and share in its good fortune.

You're right to want to get the contract back to them quickly. One of the worst things to do would be to make this negotiation painful for them. Whatever your decision, make it a quick clean negotiation and throw yourself into a great career!

Hope this helps,
Pat

[This message has been edited by TaleSpinner (edited June 21, 2008).]