Screenplay Option and Acquisition Price

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Question:

For an unpublished screenplay writer what should one expect as a rule of thumb if a major studio wants to option the screenplay and the total cost of the film, if produced, might exceed $20 million?

Answer by Brandon Blake - Entertainment Lawyer:

The question of the proper screenplay writers’ fee or screenwriter salary is always difficult because it varies so much from project to project. The question above was very specific about the budget level of the project so I will respond regarding a high budget project. I have had more than 15 years of experience negotiating on behalf of screenwriters and producers so I have seen just about every offer that can be made.

One of my clients worked with a well-known production company that will go nameless here. That production company pays first-time screenwriters $50,000.00, regardless of the budget of the intended film. It was the producer’s opinion that packaging the director and actors was where the value was added to the project, so he stubbornly refused to pay any more. You will find that sometimes the larger the production company and the more famous the producers and directors working for that company, the less they will pay, at least for first-time screenwriters. And by “first-time” I mean a screenwriter who has never had a screenplay produced by a studio.

Fortunately, there are a few rules of thumb that can help when negotiating with a production company. The first common one is that a screenplay should be sold for 2% to 3% of the budget. Of course this is referring to a “spec script sale” and usually writers are hired to write bigger budget scripts and assigned the material, rather than bringing in a finished script. In actually negotiating this percentage you might find a number of problems. The first being that nobody can agree on or even knows what the budget is going to be before a feature film is shot. I even had a producer suggest that no writer fee would be paid until the end of principal photography because that was when the final budget would be known. Typically there will also be a floor and ceiling with this method.

Alternatively, it often makes sense to refer to the Writers Guild of America minimums in order to figure out how much a writer should be paid. The WGA Basic Agreement is only binding on WGA signatory production companies and eligible writers, but if the budget is $20 million then most likely the production company is a WGA signatory.

As of the date of this article the WGA minimum for an original screenplay on a high budget project would be $89,417.00. However, the WGA actually discourages “spec script sales” and the real substance of the negotiations typically involve what else the writer may be providing, or might have provided before. Is there a treatment or a first draft? Are there going to be subsequent drafts, rewrites, revisions or polishes? Will the writer stay involved with script consulting or get a producer credit? These all bring in different fee structures. And of course this is a minimum, meaning that writers will try to be paid more than these figures.

From the producer’s perspective, always miles away from the writer’s point of view, there is the “no-money option.” As the name suggests, this is about $89,000 less than the WGA minimum. Producers tend to desire to option projects, versus purchasing them, for little or no money for the purpose of attaching a director and A-list talent. Clearly before entering into this relationship you want to know the experience level of the Producer and you should still negotiate the purchase price before starting work with the Producer.

Finally, any writer or producer will benefit from having an experienced entertainment lawyer help to negotiate their side of the deal. I have been personally negotiating both independent and studio writing deals for more than 15 years and have seen just about every different offer that can be made. With experienced counsel, a writer or producer can get a good deal, regardless of whether this is your first or tenth feature film.

As with any legal matter, please do not make a decision about complex matters without consulting an experienced entertainment attorney first. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

About the Editor:

Brandon A. Blake is an entertainment lawyer and producer who works with Academy Award winning actors, directors and filmmakers. A complete biography is available online.

About the Entertainment Lawyer Q&A: The Entertainment Lawyer Q&A does not create an attorney-client relationship, nor is the information treated as confidential. Responses to selected questions will be made public and shared with our subscribers. All entertainment law information is informational in nature and is not intended to be acted on without entertainment lawyer counsel.