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BREAKING & ENTERING: Negotiating Negotiations Part 2

Negotiations: Secrets you need to know when there’s money on the table. The folks with the money are going to keep it their own pockets as long as possible.

A producer who’s sold to all the majors, Barri Evins created Big Ideas to give aspiring screenwriters what it takes to break into the business by sharing methods she uses with professional writers. Sign up for Barri's newsletter and follow her on Twitter @BigBigIdeas.

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Negotiations: When There’s Money On The Table

Last month I devoted my column to negotiations, focusing on The Free Option – what many aspiring writers are likely to encounter first. Of course, the goal is to get paid to write. I want writers to have a solid foundation in the basics of industry negotiations so they don’t go in blind. Read more on negotiating a Free Option here.

BREAKING & ENTERING: Negotiating Negotiations Part 2 by Barri Evins | Script Magazine #scriptchat #screenwriting

Writers may think that they will never have to sully their hands with actual negotiation – that’s what agents, managers and lawyers are for, right? Well, yes, they are on the frontlines, but it’s going to be up to you to when it comes to “advise and consent.”

As I’ve said, I am not a lawyer. I am not offering legal advice, but I believe it’s best for writers to go into a negotiations being prepared and understanding the fundamentals. Hopefully, these real life examples can help you grasp the lingo and the basics of writing deals and negotiations.

I love negotiating. I learned it the hard way, in real world situations, but I also had the input and support of top-notch entertainment attorneys. (Read about my first jaw-dropping negotiation here. A terrifying encounter that left me fearless.)

Know What You Want Before Heading Into A Negotiation

Hopefully, your Free Option will help launch your career and introduce you to many working industry professionals. What’s next? A sale!

Yes, of course you’d like that splashy, seven-figure spec sale. But those only seem to get fewer and father between. The spec boom of the 1980s was followed by a 1988 Writers Guild of America strike – the longest in history at five months. Imagine all those unemployed writers, sitting at home banging out spec scripts, and the glut of material that followed, leading to a booming spec market of the 1990s, marked by million and multi-million dollar spec sales that shattered records as studios stockpiled material. But by the 2000s, studios were far more reluctant to shell out the big bucks for specs that might never develop into successful films, prompting the rush to proven intellectual property.

According to Daniel Miller, in his L.A. Times article, "Hollywood ‘spec script’ is making a comeback," “Despite signs of new life for spec scripts, veterans don't expect the market to ever be what it was.” I can’t imagine seeing a return of the multi-million dollar spec sales in the course of my career.

So let’s get realistic. As a first time writer, you are most likely to be offered “scale plus ten,” meaning the WGA minimum for your specific type of project plus 10%. All that information is available on the WGA website, and they also have very helpful people manning the phones. That extra 10% is what your agent is going to take anyway, so while you feel like you’re getting a bit more, in reality, it just makes up for the bite taken by commission.

Keep the big picture in mind. Remember, you want to get that first sale under your belt, even if it’s not the pot of gold at the end of the rainbow you envisioned.

Know Your Bottom Line

Many deals are built with a “floor” and a “ceiling.”

Negotiations: A Floor And A Ceiling

This means that there’s a sliding scale tied to the budget. If a lower budget version is made, you get the lower price – the floor. If it’s made at a higher budget, you could get the ceiling, the maximum amount the buyer is willing to pay. This gives the buyer more freedom in packaging and financing a project. If a lower budget version is made, the project isn’t encumbered by a disproportionately high price for the script.

When I’m in a rights negotiation, I always start with a floor and ceiling in mind, regardless if it could be a production issue. Of course, as the rights holder, you’re hoping for the big bucks, but it’s worth thinking about your bottom line, the minimum you would be comfortable accepting. Your agent should be able to provide you with some guidelines going in. Expect a reality check.

Your agent is going to be fighting for that higher number too. Not only does it mean a bigger commission for them, it sets your “quote.” Whatever you are paid this time, expect your agent to wield that as a club in future negotiations, demanding that you get more than your previous quote. This is how the amount of money writers command goes up with each sale, re-negotiation of the next installment of a franchise, or the renegotiation of a TV series deal.

If you’re lucky, you will come out somewhere in the middle of your personal floor and ceiling.

You may be disappointed with what you’re offered, especially for a first sale, but hopefully, just the beginning of your career.

The Step Deal

Surprise! Not only is there no pot of gold awaiting you, but what you do receive is going to be doled out to you in small portions.

When you set up a project at a studio, expect a “step deal.” You get paid X$s at the outset for the option, X$s when you turn in your first rewrite, X$s when you complete a polish, and X$s more when/if the movie gets made, essentially a production bonus. That is, if you get sole credit on the film. Should the studio bring in another writer to re-write you, and if the WGA determines that enough material was changed from the original by the re-writer, you could wind up with shared credit, which means one-half X$s of the production bonus. Part of the Step Deal explanation has always seemed to me that the studio would prefer to keep the money in their pockets for as long as possible. After all, they’re running a business.

BREAKING & ENTERING: Negotiating Negotiations Part 2 by Barri Evins | Script Magazine #scriptchat #screenwriting

This is the explanation for announcements in trade publications that a project sold for X$s against Big X$s. You may never reach the Big X$s. But even if the studio decided to throw you off the project without exercising all the negotiated steps, they have to pay you that money.

In negotiations, keep this in mind, and don’t get too starry-eyed about the Big X$s of the production bonus. Chances that you will be thrown off your project are higher than you’d imagine. Focus on the initial option payment; that’s where the guaranteed Big X$s are.

The Secret Draft

I hope you noticed that in the breakdown of the Step Deal, it’s specific that the writer gets paid when the draft is turned into the studio. And that. My friends, opens a whole ‘nother kettle of fish worth mentioning.

Shhh, it’s “The Producer’s Draft.”

Negotiations: Secrets you need to know when there’s money on the table. The folks with the money are going to keep it their own pockets as long as possible. Script Magazine #scriptchat #screenwriting

When a script enters studio development, the production company and the studio execs on the project – usually two, a senior level exec and a lower level exec – collaborate with the producer and their development execs to come up with a combined set of notes. BTW, it’s the job of the lower level execs to meld all the opinions into a single document: a set of notes that conveys what everyone wants in the rewrite – hopefully clearly and invariably politely. As in: “Perhaps we should consider reworking the hero so that he is more likeable.” Very sweetly, they are asking you to rip up your work in the new draft.

Off you go to rewriting, until, lo and behold, you have addressed the notes and have a new draft. The first thing you do is send it to your agent. Traditionally, they then give it to the producer. The producer reads the draft and may well have more notes and want another pass done before they will turn it into the studio. This is “The Producer’s Draft.” Initially, it may seem unfair. You, and your agent, want to get a paycheck.

Honestly, the production company is not out to simply exploit you. Their job is to move the project toward production. To that end, they want to keep the studio excited about the project. An uneven or unpolished draft, or one that doesn’t fully address the notes, could dim their enthusiasm. It could even cause a loss of confidence in your ability to rewrite and deliver on the remaining steps.

I’ve arm wrestled with a few agents over the “free rewrite” of a Producer’s Draft. They wanted to get their clients (and themselves) paid. I came out on top when I made a convincing argument that it is truly in the best interest of the project.

So, rather than feeling like slave labor, consider that the production company is dong its job – working to get your project made. That is in everyone’s best interest. They are on your side, they are bringing their expertise to the project – which is why you want a production company on board, and if it takes any of the sting out of it, they’re working for practically for free too, during the entire development process.

A typical producer’s fee for development is $25,000 to $35,000. And, as the studio likes to keep their money in their pocket, the producer is paid one-half when their deal closes. The other half isn’t due until the beginning of principal photography. That’s money they will never see if the movie doesn’t get made. $12,500 divided by a couple of years = peanuts.

Negotiations: We're all working for peanuts!

Be a team player. Do your best to address the Producer’s concerns. That does not mean writing endless Producer’s Drafts, but do what’s best for you and your project. Take another pass, and rather than grumbling, have a good attitude about it.

Being good to work with goes a long way in this small town. Tongues wag, and people in positions to hire check in with others who have worked with you. Reputations count.

There’s seldom a positive payoff to not playing nice. Dr. Paige Turner shares a “who’s on top” tale about the high cost of being a jerk in negotiations.

Strive for a truly productive working relationship. You are going to encounter notes that you don’t agree with, notes that you think could seriously harm your story, and even notes that don’t make sense to you. But it’s worth it to listen all input. Notes you don’t agree with may be pointing to an underlying problem that you can fix. By all means, stand up for your story in development, but give due consideration and respect to the notes you receive from the pros that share your goals, and are working hard to get your project made.

Give and take. That’s the true art of negotiation.

Please note: The next Big Ideas Screenwriting Intensive is Los Angeles, June 10-12. Idea to Outline in a weekend, plus 6 months of mentorship. Revolutionize the way you create. You can find more information here.

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