How Screenwriters Negotiate Step Deals


Ready for a business lesson for screenwriters? How do we get paid? Mainly by check, but sometimes in magic coffee beans… Just kidding. But there is a step payment process used in many screenwriting deals.

Screenplay option

The first type of payment for your screenplay is typically an exclusive  OPTION. This is analogous to renting your literary property. They usually last for six to twelve months and are brokered at 10% of the purchase price. Once the option expires, the rights to your script automatically revert to the screenwriter.

The second type is an outright movie script  PURCHASE. Although you’ll normally receive ten times the size of option payment, you are relinquishing all further rights and control over your work.

Screenplay turnaround

Film producers often do this when they like your story, but intend to hire another writer to develop it. If you want it back in the future, you’ll need to buy it during a process called TURNAROUND. Another studio will often pay more than the initial studio paid for it to cover development and incidental costs. Therefore, many movie scripts get lost in development hell when the costs of another studio buying your script become prohibitive.

Elements of a screenplay step deal

If a film producer intends to keep you on to develop further drafts of your screenplay a STEP DEAL is usually negotiated. In the days of yore, multi-step deals were the norm. Three or even four step deals. This doesn’t mean that producers dance as they deliver your multiple checks. A step deal simply refers to various drafts of a script. At the end of each step, a writer’s services can be terminated depending on your contract. The

At the end of each step, a writer’s services can be terminated depending on your contract. The WGA has minima which must be paid to the screenwriter at each step. The amounts paid usually decrease with each step. So when you read the trades and see that a script has sold for six or seven figures, the writer doesn’t receive all that up front. Damn.

Of course, other factors come into play such as whether the screenplay is original or adapted, whether it’s a rewrite or a sequel, or the source material. Was it a book, comic book or graphic novel, short story or newspaper article.

The level of development required affects the screenwriters’ fee.

A writer gets paid half the first step usually at 50% upon commencement and the remaining 50% once the material is submitted. This is called the COMMENCEMENT or SIGN UP FEE.

At each step, a screenwriter’s commitment to further steps is contractually stated as being either optional or guaranteed. If you are guaranteed a certain number of steps, you must be paid for them, even if a producer hires another writer. Otherwise, they may not exercise the option of hiring you for further drafts.

There is usually a PRODUCTION BONUS payable upon the first day of principle photography if your project is greenlit. It should be noted that studios are notorious for delaying payment by months, even up to a year, so don’t quit your day job just yet. On the positive side, a studio script sale is usually quoted as one figure against a higher figure, such as $100,000 against $300,000 if the project enters production. I must add that the difference between the two figures is payable, not the sum. I’ve tried that one too, with no luck.

On the positive side, a studio script sale is usually quoted as one figure against a higher figure, such as $100,000 against $300,000 if the project enters production. I must add that the difference between the two figures is payable, not the sum. I’ve tried that one with no luck. Damn.

The first step of a deal could be a story, treatment or first draft. Subsequent steps include revisions and a polish. As studios are currently dispensing with development financing, they are increasingly offering only one and two-step deals. This means that they essentially want close to a shootable script as soon as you’re hired to write an assignment or purchase a script from you.

After your checks arrive

So you’ve landed a multi-step deal guaranteed for two steps at $100,000. What next?

  • If you have a writing partner, the paycheck must be split. Unfortunately, you can’t ask for $100,000 each. I’ve tried that one too. If there are more writers, you must all enter WGA arbitration.
  • Then you must pay federal and state taxes which could amount to 25-30% depending on your individual circumstances.
  • Then you need to pay your agent, which is another 10-15%
  • If you have a manager, that’s another 10%
  • If you’ve used an attorney for any part of the process, that’s another 5%
  • Finally, you need to pay that pesky WGA, who negotiates screenwriting fees on your behalf. If you’ve worked for a WGA signatory company (all studios are signatories), you’ll need to join the WGA for $2500. If you ask them nicely, they may offer you an installment plan. If you’re already a WGA member, your dues are 1.5% of your earnings. If you work they get paid. Sounds fair. It may seem like a lot of money, but it’s worth it when things go awry. You’ll never be able to negotiate these fees on your own.

So there you have it. After all the deductions are accounted for, you’re left with about $100 as disposable income. Spend it wisely.

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