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» Hatrack River Writers Workshop » Forums » Open Discussions About Writing » Contract Advice!!!

   
Author Topic: Contract Advice!!!
theworldinthewords
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Hey All,

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.

Thanks for any advice you can give.


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J
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To make even $30 on residuals, the episode would have to net $100,000.

Take the money up front.


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KayTi
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I'd ask for the $30 and .01%

Good luck!


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theworldinthewords
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well, they'd have to make $1000 for me to get $30, but still, will they really make that much money per month on these episodes? I don't know. That's my predicament.
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Wolfe_boy
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Well, if $1,000 in revenue is the threshold for getting paid $30 one way, and $100,000 in revenue is the threshold for getting paid the other way, which would you rather have?

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.

Jayson Merryfield


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djvdakota
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First off, I'd put a little money out to have a lawyer look the contract over. Or maybe one of your professors might do it for you.

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

Third, J is right. The episode would have to make $100,000 to make you $30. It's POINT03%, NOT 3%. That's 3 cents for every 100 dollars earned per episode.


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theworldinthewords
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you're right, I made a mistake there.

I've gotten others to look at the contract, and it seems pretty legit. I just need to make this decision. I could probably try to renegotiate later.


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extrinsic
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The real payoff is the experience that you can enter on your screenwriting curriculum vitae. Thirty bucks, royalties, residuals whatever your income, it won't compare to what that first job on your CV will do to help get the next job.

My only reservations would be how long-term the job is, what's my escape clause if I want out, what other of my activities might the contract prohibit, like noncompete or morals clauses, and will their reputation in future come back and damage mine by association. They may be innocent and benevolent now, what happens tomorrow?


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Zero
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Seems like I'm always reading about writers getting screwed by payments based on "net" profits. Take your money up front.
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JeanneT
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The advice I've had from professionals is NEVER take your money on the back end. You know what comes out the back end, right? Get your money up front. And congratulations!

[This message has been edited by JeanneT (edited June 19, 2008).]


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kings_falcon
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First, Congrats that's wonderful.

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.

Some shows will make millions per episode, but unless you have access to their figures you probably don't have a sense of the show's income potential. Try to get a peice of the back end (.01 or so), but right now you need the credit for your writing resume more. Don't lose the contract.


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Rommel Fenrir Wolf II
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CONGRATULATIONS

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.

RFW2nd


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Stagecoach
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I'd ask what the percentage payment is based upon: gross or net revenue. Net would mean you get a percentage of any money left over after they pay expenses. If they have a good bookkeeper, they will never show a profit---and you will get zip.

At least with a percentage of gross, the computation is simple: just multiply the percentage against the actual dollar amount earned. Of course, either way, you will need to have access to their accounting records to be sure you aren't getting ripped. They may tell you they didn't earn any money from a project, but how will you really know?


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TaleSpinner
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Here's my 2c.

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).]

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


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SaucyJim
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One thing I'd ask is for some clarification: you said that you'd be paid for every "bit" of your script they used in the episode. What constitutes this bit?

Other than that, I'd agree totally that you'd want the money up front. And hey, if it gets to the point where they're making more than $100,000 on every episode, see if you can't renegotiate your contract.


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