The original post for this episode can be found here.
John August: Hey, this is John. Today’s Scriptnotes was recorded live at the Writers Guild West where Craig and I led a panel explaining how contracts work when you’re hired to write a movie.
During the presentation we had slides that showed the legal language we were discussing. You can probably get the gist without the slides, but to really get the most out of this you should download the PDF and read along. To do that follow the link to the show notes, or just go to johnaugust.com and look for this episode. I’ll be back at the end for some housekeeping. Enjoy.
Hello and welcome. My name is John August.
Craig Mazin: My name is Craig Mazin.
John: We host a podcast called Scriptnotes, which is about screenwriting and things that are interesting to screenwriters.
I can’t promise you that this is a thing that is interesting to screenwriters but it’s a thing that’s very important to screenwriters, which is your contract.
Craig: I’ll make it interesting.
John: Craig is going to try to make it interesting.
Craig: We’ll give it a little zhoosh.
John: So some folks are going to listen to this at home and so I want to give them a sense of the place that we’re in. And we’re in the multipurpose room of the Writers Guild of America West building. And often, this space was offered to us to record a show. And Craig said he wouldn’t come here because this is where dreams come to die.
Craig: Yeah. This is a brutal room. It’s a perfect rectangle of doom. The carpet is just pediatrician brown and it just always felt oppressive. It was always three degrees too hot. No air. And I walked in tonight and oh my god it’s so much nicer.
John: Yeah. Let’s give applause for this new look. This room has improved greatly. So we have an audience of writers, obviously, a bunch of them are feature writers. And tonight we are going to talk about what to look for in your contract. Because I remember getting my very first writing contract. It was for How to Eat Fried Worms which was an adaptation. And I was so excited to get my contract and I read through it and I could not understand it for the life of me. I was just kind of blindly signing. I had to get it notarized. But that got me paid. And so I loved it for that.
What was the first contract that you signed for writing?
Craig: It was for Rocket Man. Not the current movie. Not the good one.
Craig: But 1997, Walt Disney. And like you I was – you know, well, I’m a student and I was kind of interested so I flipped through and I read through everything. And I tried to understand it as best I could. It did seem to me that there are a lot of things in here, I mean, we concentrate on how much we get paid, but there are a lot of things in here that actually do impact how we do our job, what happens to us in success, how we’re taken care of, how we’re not taken care of. So, it’s actually good to understand how this all works.
John: All right. So over the years we’ve picked up some experience but not nearly as much experience as the actual real lawyers on this panel.
John: Firstly welcome up Laurie Espinosa. Laurie Espinosa is the Senior Director of Contracts for the Writers Guild of America West and has nearly 17 years of experience with the WGA. Laurie has extensive experience interpreting and enforcing all aspects of the WGA theatrical and television basic agreement with a particular focus on separated rights issues. Separated rights are important.
John: Laurie obtained her JD from the USC School of Law and her undergraduate degree from the University of Wisconsin – Madison. Laurie, thank you for being with us.
Laurie Espinosa: Thank you.
John: Next and final up we have Ken Richman. Ken Richman coming up. Ken Richman is a Managing Partner at Hanson, Jacobson and a whole bunch of other people’s names where he reps a ton of writers including me. I just found out that he got his degree from Harvard so congratulations Ken Richman. Ken Richman!
Thank you both for being here. I thought the best way for us to actually go through this would be to actually look at a real contract. And so then I was daunted by like this is a 60-page document that we’re going to be copying for 170 people in a room. That wasn’t going to work. So in this room we’re going to be looking at some slides. And so the slides are behind us. We have in front of us a thing that will be a PDF down the road that people can download.
What we did is with Ken’s help tried to find the very basic things you’re going to see in a contract. So, this isn’t one specific contract. It’s sort of an amalgam of different things. But it gives us a jumping off place for talking about the kinds of stuff you will see in your contract. So we’re going to kind of go from page one through it, but just talk about the sections and see what’s there and what are the important things to look out for if you’re a writer.
Craig: But before we actually dig into the contract we should probably talk about the things that happen right before the contract, because before you – so this is the long form, the dreaded long form. But before that ever happens there’s usually some sort of agreement and a deal memo. And right off the bat you’re probably, no OK, well how much am I getting paid? How many steps am I guaranteed? How many optional steps are there? What is the price per step? Is there a credit bonus? What’s that going to be? How much time do I have to work on this?
All those basic things are there in that kind of initial.
John: And so that initial round or discussion that’s where you’re talking with your reps about like they’re going back and forth and they’re figuring out how to do stuff. And they say like, OK, we’ve got a deal, it’s these points. And, great, and so that’s the thing that I’m scribbling down on my little notebook. And then weeks or months later I see the final contract and it’s Ken Richman who is negotiating those important stuff in the contract.
So when I see the contract I recognize those things that I had written down, but there’s so much more and it’s Ken’s pencil notes over everything. Ken, just in a general sense when there are deal points settled are they done or does stuff vary after that point?
Ken Richman: Sure. What Craig summarized is pretty accurate in that we will have negotiated what are the writing steps, how many steps are there. And we’ll see in a contract how it’s reflected. But how many guaranteed steps? Is there one guaranteed step? Are there two guaranteed steps? That’s for sure negotiated. How many optional steps are there?
And then what is the money attributable to each of those steps? Furthermore we absolutely will have negotiated what kind of credit bonus there is. And those are the key points that will have been negotiated.
Craig: And they stay essentially firm?
Ken: Those are very unlikely to change. You know, in this business for the most even though this contract is going to need to be signed for sure in order for you to get paid, those points really will not have changed. And I will just point out in the entertainment business not all contracts do get signed. Often depending on what studio you’re dealing with–
Craig: Can I tell you something? I never signed my contract for Chernobyl. It’s unsigned.
Ken: I believe you. And what I was going to say is depending on what studio you’re working at, depending on whether it’s an actor deal or a director deal or a writer deal it may never get signed, depending on whether it’s film or TV. But I will say as a general matter a feature writing contract is going to get signed or you’re not going to get paid. And so it is going to get signed.
John: And Laurie at what point are you tending to see feature contracts? Is it usually when there’s a problem, when something has gone wrong? Is that when you’re seeing these contracts?
Laurie: We usually see them after they’re signed and sometimes not until credits are done, in which case our credits department will ask people for the contracts so they can confirm that the writing was done under our jurisdiction. Sometimes it helps with determining the order of writing services.
John: Great. Well let’s going to get into a contract. And we’re going to have a bunch of stuff to talk through as we hit different slides.
Craig: This is going to be so much fun.
John: Oh my god. It’s like [crossover] but in audio form.
Craig: Here we go. Deep breaths.
John: Your contract will start with something called a Memorandum of Agreement. This is the thing. And the stuff that I have redacted here is actually helpful. These are the variables that are going to get plugged in. So the date, who the studio is. In this case it’s Wet Dog Pictures. The writer’s loan-out corporation. The writer’s name. And the project entitled Movie, so the name of what they’re anticipating this being.
Let’s start with the loan-out company. So my first deal was for Go. And it was just me. I signed it as me. I had no loan-out company. What is the common perception of when a writer needs to have a loan-out company today in 2019? When does that happen, Ken? What is the recommendation? Because it was because of you that I got a loan-out company. So what is the advice now?
Ken: Yeah, I think different accountants, different business managers might give different advice, but I think generally speaking once people are steadily working, feel confident they’re going to have a steady income it tends to be recommended to form a loan-out. You get better tax treatment. You can take better advantage of deductions. And so I would say that the vast majority of clients with whom I work have formed a loan-out by then.
If it’s your first deal, you’re not sure when the next one is going to come, it may not be time yet. But we would talk about it and we’d have a discussion of what do you think the next year looks like, what do the next few years look like, what’s going on.
Craig: The thing about these loan-out companies in terms of these contracts is you will see sometimes if you’re signing a certificate of authorship, I assume you guys have seen those things, which can get your paid prior to the whole thing. A lot of times what they’re asking you to attest to is the essential falsity of the corporation. The corporation is hiring you and the corporation is saying we promise he’s going to do this or she’s going to do this and they’re responsible. So it’s just connecting the company to the person.
John: Nice. Next we’re going to see Conditions Precedent. Ken Richman, tell me what’s actually happening on this thing.
Ken: OK, so what’s happening here is this provision is basically saying here’s some things that need to happen before you can actually get paid. So generally speaking the first of those is signing your contract. And so that’s there. The next thing that it says here is that the studio approves the chain of title for the picture. So this basically means if there’s any underlying material, if they needed to acquire a book or an article or life rights they’re going to need to have gotten an agreement for that before they will pay you.
And I should point out that’s really important because you know let’s say you’re writing a movie and it’s based on a book, if they’re still arguing with the author of the book or that person’s representatives as to the terms of their contract and that contract is not done yet they’re not going to pay you. And I’ve absolutely seen situations where writers sometimes get impatient, they have a window of opportunity to start working so they want to start working, and then I’ve seen situations where the underlying rights deals never close because the deal between the author and the studio blew up and now the writer has spent a bunch of time working when they shouldn’t have yet and they never get paid. And that’s really problematic.
Craig: This is kind of our paragraph one red flag. Right off the bat this is something that you should look really, really carefully at. This is a kind of clause here, 1.2, that you may sometimes say no. I mean, come back when you have the stuff. Or just say you have it now.
Ken: And the other thing I would just point out is sometimes also in this conditions provision you would have other people’s agreements. So for example if there are producers on the film, if there’s already a director on the movie, if somehow having you write was conditioned on an actor becoming attached to the project, those will be listed here as well. And so you definitely want to have a discussion with your representatives in terms of what’s the status of those, what’s going on to make sure–
John: Because you cannot start writing. You cannot be paid for the writing you’re doing until it’s clear. Next up, Engagement, Assigned Materials, Separate Projects. 2.1 says Loan-Out. So we were talking about loan-outs before. So loan-out they’re not hiring me directly they’re hiring Quote-Unquote Films. Quote-Unquote Films is – they’re cutting a check to that company. But that company is just me.
Craig: And if you’re company says something it’s like you saying it. And if you say something it’s like your company is saying it.
John: Mostly Quote-Unquote Films is a way for me to shield profits from Craig Mazin on t-shirt sales.
Craig: I’ve gotten nothing.
John: That’s really what it is. Any red flags with loan-outs, it’s just there because it’s there.
Ken: I’m not super worried about that provision.
John: Assigned Material. This is a red flag for us. For assigned material a “lender and artist acknowledge and agree that television results of artist’s writing services shall be based and derived from the assignment material including, without limitation, the following.” And there will be a list. Craig, you’ve encountered this.
Craig: Well sure. So sometimes you know what the assigned material is. You’re coming in and somebody is saying to you we need you to rewrite something. Well right off the bat one piece of assigned material is all of the scripts prior to your employment. If it is an adaptation, if there’s a novel or it’s a remake of a movie or a song or something that would all be there.
But this is incredibly important because sometimes writers think they’re writing something original and they’re not. Because the studio will occasionally assign material that they didn’t know they were being assigned. And this becomes a huge issue when it’s time for credits because the way the Writers Guild evaluates credits there’s what they call an original project or a non-original project. That has nothing to do with the quality of your writing. It is entirely about this.
If anything is assigned material and it is of a story nature they’re going to move it over into the non-original bucket. It’s a whole different set of rules. You are not entitled to a guaranteed shared story credit. And you will be behind this in line chronologically when it comes time to determine credit.
John: Laurie, you must have encountered this.
Laurie: Yes, and it can also impact your entitlement to something called Separated Rights which we’ll probably talk about a little bit later. Essentially is a benefit of the guild agreement that goes to the writers of something original. So if there is something of a story nature assigned in the contract it can definitely impact that and it changes the rules for the writer even being able to get separated rights.
Ken: Yeah. And I should also just point out sometimes even when you know technically there have been prior writers, the creative executive or someone may have said to you I want you to throw that out. I don’t want you to pay any attention to it. I just want you to start from scratch.
Craig: Don’t read it. Yeah.
Ken: The reality is it still counts as assigned material. So as the guys were just saying when it comes time to determining credit it’s still considered a rewrite so all of that material that was done prior to you will absolutely come in for the credit determination, even if you never looked at it. And so this is really important even if you think you’re starting from scratch if there have been prior writers.
John: One thing to bring up also, Craig and I were talking about this backstage, is the Romeo and Juliet problem. And so let’s say under this, you’re doing a modern adaptation of Romeo and Juliet, if they list Romeo and Juliet here in this place then it’s an adaptation of Romeo and Juliet. It is not an original thing. And that’s frustrating.
Craig: Yeah. When you’re dealing with stuff that is in the public domain they cannot possess it, but they can assign it, which is weird. And so you might want to take a look at that especially if you’re the first writer coming in to say if you don’t have to assign me this don’t.
John: Don’t. Yeah.
Craig: Because just like that it’s now an original project.
John: Yep. Let’s move on to the money. We like the money parts. Writing services and compensation. So we have a couple of slides here. We’re starting with First Draft Screenplay. And so you see here in this first paragraph that this writer is being paid $200,000, which is being split into two steps. $100,000 once–
Ken: That’s actually for one step right there.
John: I’m sorry. It’s one step.
John: Commencement and delivery.
Craig: Commencement and delivery.
John: So it’s one step, two checks. $100,000 to start and $100,000 when you’ve completed that and turned it in.
Ken: Correct. So in this agreement and we’ll see between this slide and the next slide in this deal this writer is guaranteed one writing step. OK, so the deal that was made here was $200,000 guaranteed for a first draft. As John was just saying it’s very normal for the compensation for any step to be paid half on commencement, half on delivery. So that’s what you see here.
As you can see in this provision it basically says the conditions had to have been satisfied in order for you to get paid. And then they will pay you half on commencement, half on delivery. If you flip to the next slide what you’re see then is an optional set of revisions, also sometimes referred to as an optional rewrite. So here it was just one step guaranteed and then there were some optional steps. There’s this one, and then on the next slide it will show another optional step. And so that right off the bat is just something that is very important for you to understand when you’re deal is done which is how many steps are guaranteed, how many optional steps are there.
And I will just say that over the many years that I’ve been doing this it’s definitely been more than a trend of moving away from two-step guaranteed deals to one-step guaranteed deals. So a bunch of years ago most feature deals that we did were if you were the first writer you’d be guaranteed a first draft and a rewrite. And there might be two optional steps, an optional rewrite and an optional polish.
Increasingly now almost all studios try to have it be one guaranteed step and then either two or three optional steps thereafter. Once again, when you get to these optional steps like the first step, half the money would be paid on commencement, and half on delivery.
Craig: There’s a few other things you want to look out for in these sections. First of all, nomenclature, if you’re being hired to do a rewrite it will say first rewrite. It’s not going to say first draft. I mean, think of in steps they’ll call them rewrites.
The other thing that’s really important on these options is there’s a window. The option doesn’t last forever. So inside all of those things they’re going to tell you exactly how long they have to trigger that option and there’s a couple of things you’re going to need to know. One is how much time do they have before that option goes away. And the other thing is are there any conditions to that time window. For instance pending availability, or not pending availability. In other words, we have the exclusive right within four weeks to decide if we’re going to pay you again or not for another step. So those windows matter because on the very first thing I did they missed the window and because they decided to make the movie we ended up making more on the optional, you know, non-optional rewrite than we did on the original.
Ken: The other thing that comes up here too Craig is that it’ll set forth whether these optional steps need to be done in order or whether they can do it in whatever order they choose.
Craig: Right. You want in order.
Ken: In order is generally considered preferable, more protective of the writer, because in order means hey we’re going to go from a first draft to a rewrite to a polish. Usually that’s in ascending order of how big the step is and also how much money you’re getting paid for them. And so you don’t want to be in a situation where you do the first draft and they say, “We kind of want to save some money here. Let’s go immediately to the polish even though the step is a pretty big step and they’re going to really want you to do rewrite type work, but let’s just call it the polish.” And so it’s something to be wary of. So hopefully these steps would have to be in order. But even if they’re not and even if they are allowed to jump to the polish you do want to make sure that when you’re getting those notes for what they’re calling the polish steps that it really is a polish. And you’ll see the time periods in a couple slides from now, but is it really a three or four week step, or this a six or eight week step, in which case this isn’t a polish and it’s something to pay attention to.
Laurie: Right. It becomes even more important if you’re at minimum and these figures are not. But there’s a big difference between the rewrite minimum and a polish minimum. So if you’re asked to do work that rises to the level of a rewrite it’s definitely important to bring that to us so we can enforce the rewrite minimum for that. Basically a rewrite is changes in story, structure, and dialogue.
John: So on the issue of one step deals, so this is a one-step deal we’re looking at. This is the thing we’re trying to push back against and fight against. In this case it’s not in the long form agreement that you’re pushing back against that. It’s in the initial deal-making. This is a guaranteed one-step guarantee, two-step optional. That’s being figured out before any of this is drafted. So in the initial conversation what I would scribble down, I would star the ones that are guaranteed and the ones that aren’t. So it’s not in this stage that you get out of the one-step deal problem.
Ken: Right. And you can understand why it’s preferable, right? I mean, generally speaking it means not only that you’re guaranteed more money, because you’re guaranteed multiple steps, but also you know that when you’re writing that first draft – you guys can speak to it – but obviously you’re adhering to what you pitched, you’re doing it. At the same time you know you’re going to have another step and you know when they give you notes that you’re going to get a chance to address it as opposed to feeling like, hey, they can replace me immediately, go to somebody else, which I’m sure–
John: Which leads to a lot of free work.
Craig: That’s just the tip of the shit iceberg that this thing causes.
Laurie: The other thing is some other terms of a contract are contingent on fixed compensation. So only the steps that are guaranteed are going to be included when that calculation is done, such as sequel payments.
Ken: With that said, I should just emphasize there has been a real strong movement towards the one-step deal, so I don’t want it stated as if–
Craig: I think everybody here is well aware of that.
John: All right. Let’s move on to 3.5 Fair Compensation. Who can explain fair compensation?
Craig: It’s fair.
John: It’s fair.
Ken: It’s reasonable.
John: So basically this means that you’re doing this for money. Is that all that this is telling us?
Ken: Yeah, essentially this isn’t the most impactful provision, but basically it’s saying hey look you understand that even if this movie is never made, even if this movie is made and you don’t get credit on it and therefore you don’t get a credit bonus or profit participation, if all you ever receive is that guaranteed money that you were paid for that first draft that was fair. That was it. And you’re not going to come back and complain.
John: All right. 3.6 is your bonus. So let’s say the movie gets made, you get a bonus. So in this case the writer is getting a bonus for a sole screenplay by or written by credit upon final credit determination by the Writers Guild of America, the MBA. This writer is going to be getting $500,000 upon final credit determination. For shared screenplay or shared written by this writer is going to get $250,000. So half for this.
Craig: This is a slightly odd one. You see this less. So the flat bonus is no matter what you’ve been paid this is what you’re going to get. It’s pretty typical that your shared bonus is about half of what the sole bonus would be. But I think more commonly you will see this against this. So it’s a reducible amount. So then the really important thing is to say, OK, if the bonus is I’m being paid $200,000 against a million dollars, then there’s kind of an implied $800,000 bonus. But you have to make sure you know which of these other steps apply against it. And typically it’s every single thing in here. So, if there’s two optional rewrites and one optional polish, all of that money is going to eat up into that bonus. Which means essentially you’re kind of working for free for a while.
John: If the movie gets made.
Craig: If the movie gets made and you get credit. It’s just important to be aware what applies against and as you’re going through the process if it’s not working for you and you’re unhappy and you have leverage you can always sort of renegotiate and ask for a new term like an all services deal or a step that’s not applicable. The words not applicable are your friend. You want that. If you’re dealing with a bonus like this it means you’re getting paid and it’s not eating into your bonus.
John: Yep. Let’s move onto contingent payment. This will be in your contract. You will never get this money.
Craig: The contingency is death.
John: So this writer is getting a contingent payment equal to the amount of 5% of 100% of the contingent proceeds of the picture. There’s also the definition of what the contingent proceeds are. You won’t get it.
Craig: It’s attached to your contract. It’s a very large – you’ve seen the booklet that they attach on there. Their boiler plate, all of which explains why you’re not going to get it.
Ken: A few things here. First of all, this is called different things in different contracts. So here they’re calling it contingent payment or contingent proceeds.
Craig: Net profits.
Ken: This is also referred to as net profits, net proceeds, defined contingent proceeds. Different studios have different names for them. I mean, as the guys said it is extremely standard for a feature writer agreement to provide for a 5% net profits participation for sole credit, or a 2.5% net profits participation by whatever name for shared credit. As a general matter you’re right, very few movies hit net profits.
It does happen. It absolutely has happened. I absolutely have had a bunch of clients who have net profits as writers on films. Usually it requires – this is not shocking – it usually requires a movie that didn’t cost a ton to make, that didn’t have a bunch of gross players in the movie, and the movie had to perform beyond wildest dreams. Which absolutely happens, but not terribly often at all.
Craig: Don’t count on it.
John: Don’t count on it.
Craig: And also it’s not a negotiable term.
Laurie: Have you had to audit companies?
Ken: Absolutely. And so in those situations in the context of most movies that either are paying out profits or are close to paying out profits, usually the profit participants, which wouldn’t just be the writer, it would generally be the writer in conjunction with other profit participants, be it actors, director, producers, would jointly hire an auditing firm to look at the books of the movie. And it’s pretty common practice. And keep everybody honest and hopefully turn some stuff up.
John: Great. Next, general terms for writing services. So this is actually the page I probably flip to most in my contract to see sort of like, oh, what was I actually guaranteed, what was here. It’s listing first draft screenplay, 12-week writing period, a four-week reading period, first set of revisions which is an option. 10 weeks and four weeks. Then polish is four weeks and four weeks. I will look this up because to remember where am I at in this deal, sort of what step am I on. How long do I have to do these things?
Ken: Yeah, and a few things that are important here. You know, once again let’s just be clear. Under first draft it says start of services is upon satisfaction of the conditions. OK, so you’re not technically supposed to be starting until those are satisfied. You’re not going to get paid until they’re satisfied. As John was just saying it specifies the writing period for each step. Obviously it’s in declining number of weeks as the steps get smaller. The reading period there corresponds to what Craig was talking about earlier about option periods. So basically in the situation like this where there are optional steps they have to exercise that optional step within that four-week period of delivery of the previous step, otherwise they lose that option.
As we’re about to talk about in a couple slides now, they have the right to exercise the step but postpone it. And we’ll talk about what happens if they do that, but they do have to exercise their option within four weeks.
Craig: And that’s going to roll us right into exclusivity which essentially tells you when you are required to only work for them. Like all of these things, the issue that you deal with is it’s enforceable if there’s a conflict. This comes up all the time obviously. And generally speaking things get sort of worked out.
But by and large when you’re in a writing period you can only write for them, for no one else in features. And in the reading periods, those four-week times, it’s typical that it’s not exclusive. That you can go and do something else while they’re reading there. But then when they exercise their option the question is is it subject to your availability or do you have to come back after those four weeks. Those things get worked out in exclusivity.
Again, this kind of a red flag one. You want to be as not exclusive as you can be.
Ken: And generally I will say that when we are negotiating deals up front, so before we’ve ever seen paper, usually we will bring up the issue of carve outs from the exclusivity. So just when we’re negotiating what’s your compensation, what are the bonuses, etc., we would also say by the way John has these preexisting obligations on these other projects. Those need to be carved out so that even during the writing periods when he’d otherwise be exclusive he’s not exclusive. And sometimes it’s, hey look, he’s not exclusive but he’s still going to comply with these delivery periods. Or in other instances when it’s crystal clear that there’s no way you can – you may not be able to comply with this if you get called back to your TV show and you have to spend a bunch of time on it. There may be instances when we have the ability to extend time periods as well.
John: All right. Great. Point E, commencement of services. Lender and artist acknowledge that only an authorized business affairs executive of the company has the authority to commence artist services. So when the studio executive says, oh no, go ahead start writing, they are not the person who is authorized to do that. And this is a point in the contract to make that really clear that the creative executive can’t commence you. It really is the studio business affairs has to do this. And you must encounter this a lot.
Laurie: The MBA actually requires the name of the person who is authorized to commence services. I notice that this agreement doesn’t have that. It’s not supposed to be generic. Or maybe it has it somewhere else.
Ken: I think John may have cut it off, but I think it goes on to say it.
John: So there’s one person specifically who you’re supposed to be delivering things to and one person who can say, yes, go ahead and start writing.
Craig: For commencement this is actually pretty easy because they want you to start writing and so you just make sure that your attorney says, OK, you’ve been officially commenced. Once you hear that from your lawyer you’re good to go.
Ken: The bigger issue is commencement of subsequent steps because have I been commenced on that second step–
Craig: The option.
Ken: And optional steps, exactly.
John: Oh, so much text on this slide. Deferred services. So this is getting back to that place of they can say start but also start but wait.
Ken: And what this is basically saying is they have the right in this provision, in this contract, to postpone any step for up to 18 months. But if they do so what this goes on to say is if they’re postponing a step they have to pay you as if they had timely ordered it and you had timely performed services, OK. And then you will do the step later when they ask you to do it, subject to your availability. So if they don’t have you start within the four-week period they were supposed to they then have to wait in line until you are available. They’ll have to pay you now and you’ll do it at your next availability essentially.
John: In my 20 years I’ve never had this happen. Have you Craig?
Craig: No. There have been some instances where we do like a suspend and extend where I’ll say I’m supposed to do this but I just got asked to do something else for two weeks. Would you mind suspending and extending? So we hit pause on this contract and we extend the time by two weeks so you don’t suffer. But I’ve never had anybody hire me and then say, “But by the way we don’t want you to work now.”
Ken: It’s happened with optional steps for sure though where they may say, hey look, we know we have this optional polish. We absolutely want to preserve the right to have you do it, but we’re going to wait until a director comes along.
Craig: So we’ll pay you now, look that rate in. That’s smart.
Ken: It definitely happens. It’s not that common but it does happen.
John: Great. Next up, first opportunity. So let’s say the movie gets made and let’s say you got credit on this movie, probably sole credit on this movie, yes, sole credit on the movie, within seven years after the initial general theatrical release of the picture they have to come back to you for sequel or prequel remake. Ken, is this a standard thing you’re going to see in a lot of contracts?
Ken: Yeah, couple provisions. You will absolutely see, it’s pretty standard that if you get sole credit on a movie then you will get the first opportunity to do certain derivative works, film or TV derivative works. I will say that the exceptions to that become if it’s based on library material. So sometimes you will get this first opportunity if it’s based on significant library material, but often studios will say, look, we’re not giving it in that sort of instance where it’s a big franchise film that you didn’t create and so you may not have it.
But as a general matter you would. There would be a certain circumscribed amount of time. Here it’s if they’re developing it within seven years of the prior film, if you got sole credit you have to be available when they want you to, and often there are certain parameters to the effect of hey look as long as the budget of this film is intended to be similar to the prior one they can’t offer you any less money than you got on the first one. Pretty normal provision here though, yes.
Craig: And Laurie in a case where somebody does get separated rights because they write an original screenplay and they have story by credit, separated rights cover a little bit of this too as well?
Laurie: It only covers the sequel payments, not the opportunity to write. So this is a key term to negotiate for sure.
Craig: Got it. Thank you.
John: Great. So just to make sure it’s all clear, if you have separated rights on a thing you’re going to get paid money for that derivative work, but there’s no guarantee that you’re going to be the person writing that derivative work. Is that what you’re saying?
Laurie: That’s correct. You get a sequel payment. So essentially that means if they use one of the characters that you created in that original film in a sequel or a prequel or whatever they want to call it, a new and different story, then you’re entitled to a minimum payment. And oftentimes there’s an above scale amount in the contract as well.
Ken: The same applies to TV. Yeah, there obviously wouldn’t be a floor of the prior deal and often this provision will require the approval of the relevant network as well, but yes you would generally get a first opportunity to do the first TV production as well.
John: Fantastic. Next up, this point C has some definitions, and it says solely for the purpose of determining artist’s first opportunity rights under this previous paragraph. It’s defining what a sequel and a prequel means. And it carves out this point D, it’s not an “ensemble production.” Ken, what’s an ensemble production?
Ken: Yeah, I mean, I think what I would just say is first of all usually these definitions are not that complicated and usually we know what a sequel is and we know what a remake is. Although I’m sure you can find reasons to argue about it. What is increasingly starting to happen with these franchise type films and particularly superhero type films is you see these mashups of different films.
Craig: This is an Avengers problem.
Ken: Exactly, Alien vs. Predator. You’ll see Avengers. There may have been multiple different movies. You may have written one of them. But now it’s being combined with another movie. And so–
Craig: Nobody gets the first rights because–
Ken: Exactly right. Once again, not a super common provision.
Craig: Most people here have worked on The Avengers I would imagine. It’s a thing.
John: Yeah. Markus and McFeely are both here in the house. This next point is related to this. So a remake shall be defined as a live action, English-language, theatrical motion picture produced for domestic release that is based on a picture and meets the following criteria. Same substantial number of elements. Repeats the principal story line, at least two the principal characters, and is not an ensemble production which is a loosely defined term.
Ken: And all that, you know, once again, some of that is fairly normal, but I would just say you do want to pay attention to, particularly as the world starts getting more complicated is, you know, when it says English-language theatrical motion picture – theatrical motion picture. What happens now when it’s done directly for a streaming service?
John: Or Disney Plus?
Ken: Exactly. And by the way, the same applies not just to this provision but earlier when we were talking about credit bonuses and other provisions, increasingly it’s unclear what a movie is going to be produced for necessarily and so you want to make sure you’re getting your bonuses and your other entitlements regardless of whether they’re releasing the film theatrically or how they’re doing so.
John: Great. 5.5 talks about royalties, which is not residuals. It’s its own separate thing. But I don’t understand this piece. So, Ken, why is this here? What are they talking about?
Ken: Generally this goes along with the first opportunity provision. So usually in a contract what it will provide is that if you get – as we just said – if you get sole credit you’ll get the first opportunity to write derivative works. Then there will be a corresponding provision which says that, hey, if you get not only sole credit but also generally sole separated rights, so this is really your creation, then if there are subsequent productions, remakes, sequels, or TV productions that you don’t wind up writing, either because you weren’t available, you couldn’t make a deal to do it, or whatever the reason is, they still have to pay you certain money as a result.
So what this goes on to say is if you look at the sequel provision what that says is that if they do a sequel to your film, and you don’t write it, you will get paid half of the compensation that you got paid on the first.
Craig: And these are called passive payments, is that right?
Laurie: And this is an above scale example of a sequel payment where if you have separated rights there is a minimum for that, but this is more than that.
Ken: Correct. And generally that’s for a sequel it’s 50%. For a remake it’s less than that. For TV productions it will be certain episodic payments for each time they do an episode that’s essentially derived from your movie.
Laurie: And we have minimums for remakes as well in here that aren’t tied to separated rights, just as an aside.
John: Nice. Transportation and expenses.
Craig: Gotta love transpo.
John: Oh, transpo is so good. So now your movie is in production or you’re headed to a premiere, there’s important places where you need to travel to go to—
Craig: I’ll flip to this sometimes first. I’m like are you flying me first or business? That’s a big argument. We used to have an MBA term that we would be flown first and that got rolled back to business, across the guilds. So that’s one area where you can sometimes fight, but they’re getting really good at just saying, no, it’s business all the way.
And then how much money am I going to get paid, my walk around money. And am I going to be accountable for my walk around money. You should not have to be. But this is like a fun part of the contract because I’m like, ooh.
Now one thing to note is that they will break it out by kinds of cities. I have had arguments about what kind of city I’m in.
John: Yeah, so when you’re doing Chernobyl and you’re in Eastern Europe are they paying you–
Craig: The Vilnius would be on the lower end.
John: Lower scale.
Craig: But it is a capital city location. I mean, so that actually is a decent argument to have. As it happened in that case because we knew where we were shooting they were just like you’ll get this much for being in a city say like Vilnius. But typically they will break it out as these major metropolitan areas like New York, Paris, Tokyo, or London, and then it kind of goes down from there.
And this is where you’re going to find out whether or not you’re sharing a car from the airport. I don’t really care too much about stuff like that but it’s an area where you can fiddle with things and get some perks, improve your life. It’s certainly a place to look and make sure that you’re not in for trouble, especially if you know that you’re going to be on location. I mean, Universal practically makes every movie in Georgia, which is a whole other discussion. But, you know, everybody ends up spending time there. So you want to know how am I going to be taken care of if I’m say in Atlanta.
John: Yep. Next up. Pension, health, and welfare contributions. This contract says that the studio will pay directly applicable pension, health, and welfare fund contributions required by the MBA to the WGA. In no event shall the aggregate amount of such payments exceed the total of all similar payments which the studio would have been required to make had the studio employed that writer directly.
Craig: They’re getting around the loan-out.
John: They’re getting around the loan-out company stuff. You are in a guild. You’re in a guild space right now. This is really good. I mean, they should – I guess the alternative is they could pay the writer and the writer would have to – I don’t understand why this would never be here.
Laurie: Yeah, the writer can’t make his or her own contributions by law, so the company has to make those contributions, regardless of whether there’s a loan-out or not.
John: Nice. Point 8, ownership and distribution. I take this to read that this thing that you’re writing they own it and they–
Craig: This is the big one.
Craig: This is how they built Hollywood, on this paragraph, which says you’re not writing it. You’re being commissioned to write it. Even if it was your idea and you brought it to them. Even if you’ve already written it and you’re selling it to them, they – we engage in this.
Look, the upside to this is because it’s a work-for-hire that means you’re an employee. Because you’re an employee you can be in a labor union. So there’s some good upsides to this. But this is the magic paragraph that says – and it’s my favorite paragraph in combination with the paragraph that says you also warrant that you are writing the material you write. So you have to promise us you’re going to write it and also we’re writing it. It’s basically what they’re saying.
Laurie: This is the genesis for separated rights because this is the work-for-hire doctrine that means the company is the copyright holder. And so separated rights basically says that certain rights are separated out from that. And effectively licensed to the writer of original material in perpetuity.
Craig: Right. They’re kind of giving us back stuff—
Laurie: That you should have, yeah. Nice.
John: Begrudgingly. But we should acknowledge that it’s good that this paragraph is here because without this paragraph we cannot be employees and there would be no union. This is a foundational thing that we need to have exist.
Craig: Yeah. And that’s why we have – I mean, the whole concept of residuals was essentially to simulate the royalties we would get if we maintain copyright. So that’s all of what we do here is this kind of strange dance regarding work-for-hire. It’s fascinating to a small amount of people. But I’m one of them.
John: Point number nine.
Craig: Oh yes.
John: So, these are the bonus materials and other things that could use your material that aren’t the main thing. And Ken are there important negotiations here or are they just protecting themselves?
Ken: Not really. And also what this is also saying is, hey look, if they shot some behind the scenes the footage that you happen to appear in you’re giving them the right to – unless there was something particular going on it’s not something we would generally talk too much about.
John: Cool. Assignment. The studio may assign, transfer, license, delegate, and/or grant any part of the rights, privileges, and properties here under to any person or entity. So, this thing I made with you, they could give it to somebody else.
Craig: They just have to honor – the person that they sell it to has to assume the burden of all of this.
Ken: Correct. And if they were to assign it to some non-solvent entity they would remain [liable, the other studio]. Yes.
John: Does this ever become a problem where the guild sometimes deals with studios and producers who are not good folks. Where this assignment thing, they’ve assigned it to a person who is terrible or is coming away from a terrible person. Does this kind of paragraph ever come into your work?
Laurie: Well, we already have paragraphs that require what we call assumption agreements to be signed by the distributor or whoever is assuming the obligations. And so like Ken said if that distributor doesn’t honor the residuals obligations then we will still go after the original signatory company.
Craig: And to become a signatory in the first place you have to show that you have the financial solvency to actually take care of your obligations.
Laurie: Right. We require a personal guarantee among other things.
Craig: So it’s not like any of you can do it. I’m sure some of you could.
John: Some of them can. Part 11, there’s no obligation to use. So the studio is not obligated to develop, produce, distribute, and/or exploit the picture–
Ken: Or to have you write it.
John: Or have you write it.
Ken: Essentially this is sometimes also referred to as a pay-or-play type paragraph. So it’s basically saying, hey look, you can never come after us and say, hey, we didn’t have you actually write it, or you didn’t make the movie. But that doesn’t absolve them of their obligation to pay you your guaranteed–
Craig: How do I get this deal where I don’t have to write it? That sounds awesome.
John: There have been a couple of times in my career where either a step, things just sort of fell apart. And they still needed to pay me out for stuff.
Craig: Oh, sweet.
John: It’s nice.
Craig: What a life you live.
John: Point 12, employment eligibility. So you will have to prove that they can hire you legally in the United States to do stuff. And so they’ll ask for identification. It’s really unclear to me sort of like why some studios want everything and other places are just like, “Just sign here.” But sometimes they ask for a lot more documentation at other places.
Craig: They keep them on record. So every now and then some studio will say, oh, you’ve got to update your I9 because after some certain amount of time we think maybe you stopped being a citizen or something. I don’t know. But it’s basically just that you can legally work.
John: Point 12.12 is services outside the US. Lender and artist acknowledge and agree that artist shall not render services under this agreement outside the US unless and until, and there’s some conditions here. As more things do go overseas this could become a factor for certain people.
Craig: Yeah, I was there. And so one of the interesting things about working overseas is the guild – and correct me if I wrong on this Laurie – has jurisdiction over writing that happens here in the United States. It doesn’t technically have jurisdiction over writing that’s done somewhere else. So if I’m hired by a British company, or if I’m hired by Euro Disney to write something, and I’m positioned physically in France.
Laurie: Right. So it is complicated but if you are a resident of the US and the company transports you, which this paragraph seems to allude to, it’s still within our geographical jurisdiction. This is article five of the agreement that has different back patterns essentially about what’s inside and what’s outside our geographic jurisdiction. So you do want to be aware of where you’re performing your services. At some point it may become a test of what percentage of your services were performed in the US versus abroad.
Craig: Which becomes super annoying in terms of taxation also. Because sometimes you end up having to say, well, a part of my money is paid to Lithuania and part of my money – but you know. Tax people.
John: Yeah. Confidentiality. Lender and artist acknowledge that prior to and/or during lender’s and artist’s contact there’s confidential information. Ken, does this become an important negotiating point?
Ken: Generally not. But you can imagine, I mean, what it’s really saying is it’s a couple things. One, they don’t want you running around talking about what your compensation is. And two, also, you shouldn’t be out there publicizing the film, sharing pages, giving secrets away, that kind of thing.
John: So I didn’t see this thing about compensation, so is it saying that I’m not allowed – would I not be allowed to talk about how much I got on a project? I didn’t see that in this.
Ken: In this one it may not say it. Some agreements definitely do, you know, where they want you to keep the terms confidential. Sometimes.
John: Cool. Notices. Any notice pertaining hereto shall be in writing. And it’s saying they can send it by mail, cable, or fax, or telecopy.
Craig: Usually cable.
John: Cable is how I do all my stuff. Telegrams is the best.
Craig: You are no longer working. Stop.
John: Ha. But where this cuts off would be the address of like who notices should go to. And that’s important to be in there. And they should be in theory still be sending them to the address that is there. And if that’s no longer the person who is representing you or the place it should go, make sure that gets updated.
Craig: Yeah. And notices, the biggest problem that we have with notices comes down to credits. Because there have been some very sad cases where the guild has sent the notice of tentative writing credits to the person listed here, that is the representative of the writer, and that person just doesn’t pass it along, or it wasn’t the right person, or that person was terminated during the writing. So you’ve just got to be really aware of that one. The most important thing there is going to be credits I think.
Laurie: Because there’s a very quick turnaround in terms of finalizing the credits.
Craig: Correct. And if suddenly two weeks later someone calls you up and says, yeah, so it’s over. What’s over? It can happen.
John: Insurance. Lender and artist shall be covered as an additional insured on the studios errors and omissions insurance policy. You want that. That is good.
Laurie: That is required in here by the way.
John: Nice. Indemnification is – what’s indemnification? Help me out. I don’t even know.
Ken: Indemnification is basically saying – usually this will go along with another provision called Representation and Warranties. Where essentially – in general you’re saying as you said earlier this is original to me. I’m the person who wrote this. I didn’t steal this from anybody else. And you’re generally saying but if I did, if I stole this or if I’ve breached this representation somehow I’m responsible and I will indemnify you, studio, for any expenses or liability you incur.
But on the flip side, and that’s what’s addressed here, you studio are going to indemnify me and protect me if there are any claims against me in connection with the film that didn’t arise from my breach of my obligation.
Craig: And there will be. If there’s a movie that’s a big movie inevitably somebody is going to wriggle out from under a rock and say you stole my… – And then the studio has to bat that away. You are not on the hook for that sort of thing and I don’t know – honestly, I don’t know of any writer that has ever actually committed some kind of plagiarism or fraud and then been exposed because of breach here. We don’t do it.
Craig: And they protect us.
John: Crediting. Over scale cash payments for writing services any credit bonus, or any contingent payment paid to lender and picture shall not be credited against residuals which may become payable to lender and artist for the picture. Basically the money they pay – they can’t take the money they’ve already paid you out of your residuals.
Craig: They can’t chew into that. That makes sense.
John: Residuals are a different thing.
John: The premiere! Congratulations. You get to go to the premiere. We talked about the Aladdin premiere. In this case if the writer got sole or shared screenplay by credit or written by credit they get to go to the premiere.
Craig: This is where you find out what they really think of you.
John: Yes. So this writer, let’s see, artist and one non-business related companion–
Craig: Two tickets.
John: Two tickets.
Craig: That’s what you get.
John: To the US celebrity premiere.
Craig: You’re getting two tickets to the movie you wrote, to be a theater filled with people that have nothing to do with the movie. That’s basically the deal. But it will detail what the transportation and hotel might be if the premiere is at a distant location, because sometimes it’ll be in New York or somewhere else. So, you know, this is an area where somebody like Ken can, if he knows like OK my client would love to take his family or his friends, this is a place where he can grind them a little bit. But, you know, the attitude on these things from the studio is the premiere is not to celebrate your genius. The premiere is to sell tickets. And sorry, this don’t sell nothing so. And so that’s why they’re a bit cheap on it. But they don’t seem to be that stingy when it comes to producers, do they?
John: No. Point 19, YOU GET A DVD. You get a DVD of your movie. Congratulations. You made your movie, you get a DVD.
Laurie: You don’t have a DVD player anymore.
John: No, not at my house.
Craig: Also they don’t send them.
Craig: No. They’ve just stopped. They know we don’t want them. They’ve just stopped.
John: Point 21, the cure. No, just a cure. On a one-time only basis – I read through this paragraph two or three times and didn’t really get it, so?
Ken: I wouldn’t get worked up about it. It’s basically saying if they would otherwise say that you’d done something wrong, you breached something, you didn’t comply, they have to tell you and you get a chance to correct that mistake. I can’t think of a situation in which that’s really come up in this context.
John: So you get one whoops.
Craig: You get two days to buff that out.
John: Point 22, WGA MBA. Artist’s services hereunder shall be subjected to the terms of the MBA. At this point Laurie points to her big purple notebook, spiral bound. This is our MBA, the basic agreement, which has all the rules of how the Writers Guild and the studios do stuff together.
Laurie: Right. And this is an agreement between the guild and the studios that’s enforceable in the same way that this agreement is enforceable. So we have two things going on simultaneously. But in no event can an individual writer agree to something that is less favorable than what’s in the minimum basic agreement. And that’s the whole point of it. So even if there were something in the agreement, and oftentimes there is something hidden in the standard terms and conditions or somewhere else that is a violation technically of this agreement. It’s not enforceable by the studio because they have agreed to do this.
John: Yes. So you can’t go lower than this. This is the base and everything has to build up above the MBA.
Craig: And this is essentially the paragraph that tells you you’re working on a WGA project. You are not allowed to work – if you’re in a covered work area you can’t not have this in your contract.
Laurie: Right. And by the way making sure the company that’s listed in the contract is signatory is a critical thing. It’s not always a studio and you might not always be absolutely certain that this particular entity is signatory. So you can always call the signatories department to confirm that.
John: Yeah. This wouldn’t be a Scriptnotes podcast if we didn’t rail on Bob Weinstein once.
Craig: Let’s go. Here we go. Everybody line up.
John: My second project they tried to hire me under the non-signatory thing. And like, no, I am a guild member. You have to hire me under their signatory branch.
Craig: That’s weird because their adherence to ethics is notorious. I’m not sure what happened there.
John: Now we get to the exhibits. Exhibit A, writer’s certificate. And so this says as of date the undersigned certifies that for valuable consideration, basically there is an agreement here between movie, Wet Dog Pictures–
Craig: You’re paying me to write it. You’re paying me to write it and I’m writing it. And this is the thing – the invention of this is the greatest because I don’t know when I started if they had these frequently.
Ken: Basically the certificate which will be, they vary at the different studios, but a very short document which basically just says, hey, we own what you’re doing and you represent more that you didn’t steal from anybody else, etc. Because usually what the studio may do is they may take this, they file it in the copyright office, and it’s just a simple document. It doesn’t have any confidential terms. It doesn’t have any money in it. It’s just their way of putting out there publicly that, hey, we own this thing without having to reveal any private details.
Craig: Right. And then that in turn gives them the comfort to pay you your commencement even though somebody like Ken is trying to figure out how many dollars you get for a trip to Tokyo, you know. Because that can take a really long time. And every one of these contracts I’ve ever had my lawyers red line through dozens of things. And some of these things are important. But if you really have to wait for this whole thing to be done months will go by, or as we said earlier it never happens.
John: Yeah. Exhibit B is a thing I’ve never had to actually do. Procedures for annotating the screenplay.
Craig: I had to do this.
John: You had to do this for Chernobyl.
John: This is marking up sort of the stuff that is in your script. Who are real characters? What are real places? What you changed and where you consulted to get the information in this? So I know you had to do this for Chernobyl, marking up.
Craig: Yeah. I was back in 11th grade and I was doing a bibliography and citations and everything. Because, I mean, the company had their own person that goes through it and does his own thing of like, OK, yeah, you didn’t make this up. Because they’re protecting themselves against you defaming people or you just saying things that are wildly incorrect. But you may have to do this. And this is something that I think a lot of people are caught unawares. There are people that will help you do it. There are people that can hired to essentially assemble the annotated screenplay form with you. But, yeah, if you’re working in a space where you are adapting or representing true facts, someone’s life/history, you’re going to be on the hook for this.
Laurie: And that ties into the representation and warranty section that you were mentioning earlier. And the company is supposed to notify you upfront if you’re supposed to be annotating.
Ken: Because usually in those reps and warranties it will say, hey, you are not writing about a real person unless you tell us you are. Exactly.
John: So, we made it through the end of the contract.
Craig: Let’s do it again!
John: Let’s keep in mind this is the contract for them paying you to write something. This wouldn’t be exactly the situation if you wrote a spec script and you were selling it to a place or optioning it to a place. So Ken could you quickly talk us through what other things would we see in a spec sale? Would it be a separate contract completely?
Ken: Sure. It depends on the studio. So, if you’re selling a spec it might be one contract or it might be two. So, if it were two you might have one which is essentially called a screenplay purchase agreement. Or it were an option purchase agreement it would be an option purchase agreement. And then separately you might have a writing agreement.
Ken: And so the writing agreement would look very much like what you just saw. And the purchase agreement, not terribly complicated other than there’s a purchase price for buying the script and then it would have a whole host of assignment type language where you’re assigning all rights over to them, once again featuring representations and warranties and indemnities. But the two together would have you transferring ownership to them and then also discuss the rewriting you’re going to do of your own script.
John: Great. Because we’re the guild I’m going to talk a little guild stuff here. The Start Button, just show of hands, who here knows what the Start Button is, feature writers? Oh, that’s better than I would have guessed. Who here has used the Start Button? Shorter number. But let’s talk through like how this ties in with your contract. Because the Start Button is a service that’s on the website right now. With the Start Button when you start writing on your feature project or a pilot it also works well you’re going to go in, you click Start Button, and you say create new project. You’re going to create a new project and you’re going to go into little fields and fill stuff out that says what the title of the movie is, who it’s for, the person authorized to accept delivery per contract, exactly the thing that Laurie stressed. Who the producers are.
Once you have your contract you’ll click that little button there and upload your contract. You’re supposed to be doing that. And actually feature writers are much better than TV writers. So, we’re awesome. We tend to submit our contracts. But then you’ll put in your steps. So, a step, what is a step? Well we talked about that. A step is, you know, first draft, your optional rewrite, your optional polish. You’re going to put that information in and say how long you’re expecting to be working on those things. And it will kick you back an email when that time is about to run up saying like, hey, how’s that going, is everything good? Is there a problem? Do you need the guild to help come in?
Because TV writers, they get paid on time because they are making a show every week. Feature writers, we don’t get paid on time because they just don’t. And so we want to make sure people are getting paid on time. And the way we can do that is by using this and letting the guild be the bad guy at times. You know, your reps should be the bad guys, but sometimes your reps aren’t doing a great job being the bad guys.
Craig: Reps. These reps you speak of.
John: But let’s let the guild do that, because the guild is really good at collecting money and doing that. And so try using the Start Button on your next project. I’ve used it regularly because we were testing it and it does help. It reminds you also because, you know, the thing like wait how long is my writing period? Look at your contract. Look at the notes you scribbled down. It gives you a sense of just a little bit more control over the process from your perspective.
And then lastly guild wise, I’ll point out that this working rule number three says like you know what you actually are supposed to be sending in your contract. That’s how the guild sort of knows what’s happening out there, what people are working on, and what are the common points. So you see a ton of contracts, but with more contracts you see like how many one-step deals are really getting made. Well, we’d know because we’d see all of the contracts.
Laurie: Right. I mean, there’s really a dual purpose for us collecting the agreements. One is enforcement. We tend to be able to guide writers through the process even when they’re making a deal, but especially after they’ve made a deal we can check to make sure the terms comply with the MBA and we can enforce it. And really also another major purpose is just gathering information to support the guild’s strategic goals. Just like you said, what’s happening in the industry, what are the trends, and what are the problems that keep arising.
John: Yeah. That is it for our official presentation, but we do have a few minutes to take any questions if people have questions. Craig says he’s going to the bathroom. We’ll see if he returns.
Male Audience Member: Yeah, I don’t know if that has to do with favored nations, would that be something that’s in the contract, favored nations? And the other thing with the Start Button, if that would be if – in other words if you’re already in the process of you getting paid, or is Start Button like if you’re writing a spec script but nobody made a deal yet?
John: Great. So I can address that first part. The Start Button is more for when you are getting paid because it’s really about sort of this person is paying me, I’ve started working on it, and I’m delivering it. And there’s an expectation that I’m going to be paid for it. So it’s not really a planning thing like that. It’s really more for you’re being hired as a writer for things. But let’s talk about favored nations and most favored nations. Where would you see something like most favored nations show up in a writer’s contract?
Ken: It’s not a terribly common term for feature writing contracts because as a general matter, you know, so favored nations or most favored nations is terminology which basically means you’re going to be treated no worse than anybody else. OK. And it comes up all the time for actors where my trailer is going to be no worse than anybody else’s. Or sometimes a profit definition where my definition is going to be no worse than anybody else’s. Or my credit will be no smaller size, or that sort of thing.
In a feature writer agreement it’s much less common just because as a general matter you’re the only writer at that time doing it. So, it wouldn’t come up very often. TV writer contracts sometimes in other ways. But not very common for features.
If you had two or three writers writing at the same time, but usually from a compensation perspective usually they will have each made their own deals. Sometimes when you’re doing like a roundtable deal where there’s multiple writers coming in for the same – to all work for a day on a project, it would be a favored nations deal where everyone is getting the same compensation. So it would come up there. You’re right, if it’s a bunch of people doing the same job at the same time it might.
John: Let’s take over here.
Male Audience Member: I had a question regarding working outside the US. Saying you get hired to write something in Mexico in a different language. Does that still apply? Are we protected from the guild from something like that?
Laurie: So, you’re both bound by working rule eight to make sure that company is signatory and, yes, the protections will still apply if the company is transporting you for the purpose of performing those services elsewhere.
But always call us before that happens just so we can make sure.
John: And when you say always call us, what department should they be calling in?
Laurie: Call contracts for that. That’s a good starting point.
Male Audience Member: Great. Thank you.
John: Fantastic. Over this side.
Male Audience Member: Option trigger question. If the employer is outside the reading time period, whatever that is, and then they say we want to trigger an option, which is I’m sure fairly common where in one of those, what to do next on a contract level and if you’re willing on political level?
Craig: I’ve been in that situation and we just said, well, OK, let’s negotiate a price. I mean, they can say, well, we did. And you can say it doesn’t apply anymore. You wouldn’t be asking me to do this if you didn’t want me to do it. And you definitely wouldn’t be asking me to do it outside of this four-week reading period if you didn’t screw up, so I’ve got a little something here. Let’s just talk about it. There should be some sort of price to pay for that. Even if it’s a little penalty.
But, yeah, I would approach it as just a negotiation for another step. That’s how I would do it. I don’t think there’s a political problem with it.
John: I would say I don’t think I’ve ever asked for, you know, we’ve gone past the reading period–
Craig: You’re missing out on so much money. Hundreds and hundreds of dollars.
John: I think there is a political aspect to it because if it’s a thing that you genuinely believe is going to go to the next thing and they’re not just stringing you along, you may decide to just go for it.
Male Audience Member: Shine that they’re outside of it.
Ken: It also depends on do you want to do the step or not. Because you absolutely have the right to say I’m not interested in doing it. And particularly if it’s a deal you made a while ago or your price has gone up since then and you feel the compensation is not appropriate you may just not want to do it if the money is not right. And you absolutely have the right to say no.
Male Audience Member: Thanks.
John: This way.
Male Audience Member: Yeah, I have a question on specs. Specifically on P&H, because we’re lucky enough to have a fantastic medical plan and my understanding is that we do not get credit compensation payment for specs. So, where exactly in the contract negotiation do we make sure that we’re getting the rewrite? And my second part of that question is do we get the P&H credits for just the rewrite or for all of that by triggering the rewrite?
Craig: They get that first rewrite as a function right?
Laurie: As long as its original, meaning the characters in the story in your spec are original and you sell it to a signatory, under the separated rights provisions you’ll have the opportunity to perform the first rewrite. And to answer your second question you get contributions on everything. So you if you just have the sale and no writing services, then no compensation at all. But once you perform a rewrite or other revisions in connection with that project then contributions are due on everything, including the purchase price.
Male Audience Member: Awesome. Thanks so much.
John: That’s great. Thank you. This way.
Male Audience Member: I’ve got a couple questions about assigned material. First, I mean, the examples you gave are usually we’re given documents or previous drafts. But sometimes you’ll go in and meet with an executive and they’ll say, “Hey, I’ve just got this idea.” Could they ever say that assigned material is that executive’s two sentence log line that they told you?
Laurie: They can say it. There are different ways that the term is used. I’ll let you—
Ken: Yeah, no, I mean, I’ve definitely seen them try to say it. I’ve literally seen contracts say, you know, based on an idea supplied by the studio. And depending upon what you’re concerned about you might either want that out of the contract altogether or you might want to make it very clear that it’s based on an oral idea from the studio because for credit purposes as the guys were discussing earlier if it’s simply an oral idea that someone gave you that still remains an original screenplay. There was no previously exploited material or anything. And so it would just – I’d want to understand better what it is. And then I would talk with my client what were you given, what were you told. But simply an idea shouldn’t be something that impacts you and so I’d either keep it out or specify that it’s oral.
Laurie: And that also impacts compensation provisions as well as separated rights. So when we think of what is assigned material that’s a story intangible in fixed form. So some sort of idea, some sort of oral instructions won’t rise to that level.
Male Audience Member: The other question is you talked about how sometimes they’ll assign public domain material. Is there any benefit for a studio to do that, or are they just being dicks?
Craig: It seems like they’re being dicks. Sometimes, in the one instance where I confronted it it was part of a larger legal strategy they were trying to make about what they did control from an extension of a public domain work. Because, you know, these public domain works kick off derivative works. And then those are property because they’re new. And then those kick off things. And so it seemed like this was more about them than about me. But the problem was that it changed the nature of the work I was doing and so that was worth arguing about.
John: Great. Thank you. Our last question.
Female Audience Member: Hi, I have a question for those of us who work in TV regularly and are now trying to do features for the first time between seasons, it’s really scary to hear how long it takes for that contract to go. So do I pretty much need to put my contract in place three months before my television series is up?
Female Audience Member: So I can have the four months I have free off?
Craig: I don’t think so. I mean, generally speaking, and correct me if I’m wrong, they know you have a time window. And you get the points that we discussed that were the deal memo points, how much money, how many steps. Then from that point they can generate that Certificate of Authorship. You can sign that, turn it in, and they can commence you. And while you’re writing your attorney is going back and forth with them to try to shape that—
Ken: True and not true. I mean, in fairness—
Craig: You say true and true?
Ken: True and not true. Most studios will not pay you on a signing certificate.
Craig: Really? How have I been getting away with this?
Laurie: But they’ll commence you probably right?
Ken: Most won’t, once again, with a feature writing deal. With that said I would say a few things.
Craig: I did not know that.
Ken: As much as they’re saying it takes a super long time, feature writing contracts shouldn’t take that long to get done. They really shouldn’t. And also I would just say unlike – obviously you’ll have a ton on your plate, it may not be easy for you to write your feature during the TV season because you’re super busy, but I would just say that unlike this feature contract which generally provides that during writing periods you’re exclusive to them, you’re not allowed to work on other things unless they’ve been specifically carved out, generally – not always – but generally a TV writing contract wouldn’t make you exclusive in movies, so that you would be allowed to work on the movie while you’re in the season of your TV show.
Some studios try to overreach and say that you’re totally exclusive during the season. Depending upon the studio, depending upon the show, your stature, what have you, that can usually be changed. OK? But I don’t know if that answers the questions to part two.
Female Audience Member: Great. So I’ll have time hopefully.
John: Yeah. A thing we’ve learned is that most feature writers are also TV writers these days. So, that is the new normal is that most of the folks are working in both. And so you’re entering into a place where many people have gone down this before. And we’ve mentioned they didn’t carve out any specific pre or prior things, but your feature contract would probably acknowledge that you are on a show or that there’s some other commitment that you have that could delay some things.
Laurie: And you probably also want to check your series contract, too, regarding the exclusivity provision just to see what it says.
Female Audience Member: OK, great. Thanks so much.
John: I want to thank Ken Richman and Laurie Espinosa for all their expertise.
Craig: Thank you guys.
Ken: My pleasure.
John: Craig and I often play lawyers on the show but we don’t actually know what we’re talking about–
Craig: I feel like I kind of do. I feel like I could get away with it.
John: He’s kind of a doctor.
Craig: I’m kind of a doctor.
Craig: And kind of a lawyer. I am a nuclear physicist.
John: He is a nuclear physicist. I want to thank Albert for putting together tonight’s production. Thank you very much for this, for putting this together. And thank you all for coming out. This was a great little session. Thank you very much.
OK, I’m back. Some last bits of follow up. Obviously there’s a lot going on in the agency negotiations so we will get back to that soon. We’ve also had a lot of folks writing in about Craig’s master class on thesis and antithesis, so we will be revisiting that topic.
In the meantime, Scriptnotes is produced by Megana Rao. It was edited by Matthew Chilelli. Our outro this week is by Alex Winder. If you have an outro you can send us a link to email@example.com. That’s also the place where you can send longer questions. For shorter questions on Twitter Craig is @clmazin and I am @johnaugust.
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