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The original post for this episode can be found [here](http://johnaugust.com/2012/etiquette-for-screenwriters).

**John August:** Hello and welcome. My name is John August.

**Craig Mazin:** My name is Craig Mazin.

**John:** Kaj vi auskultas Scriptnotes, podcast por skriptistoj kaj ajoj grave skriptistoj.

**Craig:** What? What happened?

**John:** Google Translate added Esperanto to their engine. So now I can actually translate things into and out of Esperanto.

**Craig:** That’s fantastic.

**John:** [More in Esperanto].

**Craig:** Now all you need is a time machine to go back to 1972 and you could talk to the three other people that spoke Esperanto.

**John:** I know. That’s the whole problem. I feel like Google is giving us little bits and pieces of the future that I want, but at the wrong time. Like the future is not evenly distributed, of course. And this future came a little bit late, but I am still happy to have an Esperanto tool. Come on!

**Craig:** I thought you were speaking Polish.

**John:** It does sound a little Polish. I think, if I remember correctly the history of it, it uses a lot of Latinate kind of words, a lot of Spanish. But people say it sounds a lot like Polish.

**Craig:** It does sound like Polish. And I think until now the only other person that I had heard speak Esperanto was William Shatner.

**John:** Of course. William Shatner in his classic sci-fi film… — Now I am forgetting the name of it. It is, oh, something great.

**Craig:** Yeah. I have…

**John:** Yeah.

**Craig:** Yeah.

**John:** William Shatner.

**Craig:** William Shatner.

**John:** Awesome.

**Craig:** And now you.

**John:** Yeah. So Google is also developing some sort of like glasses that you wear that give you a heads-up view of information, which would be great, too.

**Craig:** Cool.

**John:** So, again, that would be an amazing thing from the 1960s or 70s that is finally coming true.

**Craig:** What do they call it, “Enhanced Reality” something or another?

**John:** Yeah. Yeah. I think reality should be enhanced as much as you possible can do it.

**Craig:** It is basically another way for people to walk into light posts.

**John:** Yeah, or to sort of ignore you while you are in front of them.

**Craig:** [laughs] Fantastic.

**John:** So it is like the iPhone. With the iPhone you actually have to physically stick it in front of your face; whereas with this, they might look like they are looking at you, but they are not really looking at you. It is the same thing where I will be walking by someone on the street, and I think they are talking to me, but of course they are on their headset.

**Craig:** It’s the weirdest thing.

**John:** Yeah. It’s spooky.

**Craig:** Yeah.

**John:** Well, a good introduction then, because really our topic, our theme for this week’s podcast is etiquette. And etiquette in normal life, but especially etiquette as it pertains to screenwriters who are often mistreated, but sometimes actually mistreat each other. And, I think, that is maybe how you want to start off with; a thing that happened recently and had some fall out.

**Craig:** Yeah. I mean, we are in a strange business where we are colleagues, and we are in the same union, and so we are together in spirit in some ways. But we also compete for the same jobs, and we also rewrite each other. And that can create some difficult terrain to navigate.

And I thought it was navigated particularly poorly this past weekend by Alexander Payne, who is a director, of course. He just directed The Descendants. And he is also a writer. And he is one of the credited screenwriters of The Descendants.

And at the award show, when they were asking him about it he said — specifically of the prior draft by writers Nat Faxon and Jim Rash, who again, I want to point out, received credit on the movie — Alexander Payne said, “I couldn’t get into the film through their drafts. I respected their work very much, but I had to return to the novel. I learned some of the things I didn’t want to do through their drafts.”

Now, my whole thing is that that is lame. [laughs] So, I’m now leaving journalistic reportage and entering editorializing.

**John:** Yes.

**Craig:** I think that’s lame. Listen, it may be absolutely accurate. I don’t know. It is interesting — some friends of mine have read the Faxon and Rash draft and thought it was actually better than Alexander Payne’s draft. But I haven’t read any of it.

All I know is this: No matter what the facts are, you are at an awards show. You are the director, also. You have gotten plenty of credit. Nobody refers to The Descendants as being authored by anybody other than you, Alexander Payne, because you are far more famous than Faxon and Rash. Why do this? Why throw them under the bus and say, “Actually what I learned from their script was what I didn’t want to do?” It is just unnecessarily… — It is unnecessarily stingy.

**John:** Yes.

**Craig:** And we, I think, what I would like to talk about with you today is sort of a best practices way of approaching the etiquette of rewriting other writers, being rewritten by other writers, and dealing with press when you have co-writers, or there is the understanding that other writers worked on a movie for which you are credited.

**John:** Great. Going back to the Alexander Payne story, my recollection of that context for that: It wasn’t the actual award show, it was a panel of the nominated writers at the Writers Guild Theater.

**Craig:** Yes.

**John:** So, you are talking in front of a whole audience full of screenwriters, and you are throwing the other two screenwriters — who are up on stage with you — under the bus, which struck me as just very poor form.

**Craig:** Yes.

**John:** And so, I don’t have video of this. I haven’t seen the actual moment. But I moderated that same panel last year. And I can’t imagine being up there on that stage and not having it feel just incredibly uncomfortable that this thing just happened.

And as a moderator you have to kind of acknowledge that this really strange thing just happened. The year I was moderating this thing, I had a situation where there was a guy who was rewritten who was up on the stage. And it can be fine. As long as everyone is sort of, like, upfront about it, and not horrible about it, it’s fine.

You had Aaron Sorkin and Steve Zaillian on stage, who both worked on Moneyball, and they got through that.

**Craig:** Yeah. I mean, you can discuss the different contributions to a script that screenwriters have made. And that can be navigated dispassionately and interestingly.

**John:** Which is actually a great thing to be discussing in front of a panel of writers because that is the reality of the situation.

**Craig:** Yes. Right. And it is interesting. I am the last person to say lets whitewash what happened. However, if you are the director of the movie, or the producer of the movie, and you had this particular additional creative authority over the film, what is the point of saying, “I learned what to not do from that draft?”

**John:** Look regardless of how much authority you have on the film, that is a bad thing to say. Here is the polite thing to say. Like the first Charlie’s Angels, Ryan Rowe and Ed Solomon created a draft, and I came in and did a very different movie. And so we are all very upfront about the fact that they had created this amazing opening set piece that set one kind of movie that was really cool, and that is still the same set piece that is in the movie. And we loved it, and that was the thing that never changed throughout the whole development process.

But their actual plot went in a very different direction. It wasn’t the direction we went in. And we can say that and talk about that in a very open and happy way because that is just the reality. And we are not saying that anything was bad or wrong in their draft, it just wasn’t the movie that we were going to be making.

And that can be a positive starting place.

**Craig:** Yeah. You can sort of talk about, “Look, here is where I went with it. Here is where they went with it.” But if somebody has credit on the movie, particularly screenplay credit, what are you suggesting? The Guild has already put its two cents forth and said, “This person wrote at least a third of this movie.”

So, I don’t get where the thinks he is coming from. Even if he feels like that was a bum decision, just be kind. Just be kind. You can say, “Listen, they…”

If it had been me I would have said, “I read their draft. I thought it was fantastic. I decided I was going to go back to the book a little bit just to tie in… — I was going to adapt it actually a little more closely to the novel than they did. So we went through quite a few changes. But, you know, overall I think the work that they did, and the work that I did, ended up on screen in a great way.”

How hard is that? It’s like, it’s baseball…

**John:** Just say it was a fantastic draft, but there were different things that interested me from the book, and I really went back and pulled those into the draft.

**Craig:** Yeah. Just be like baseball players when they are talking at the end of a game, you know. And everyone is like, “Wow, you hit four home runs. And the team won 4-3. That was all you.”

“Well, you know, it’s still a team effort.” Just be cool. How hard is that?

**John:** Be cool. Be nice.

**Craig:** Yeah!

**John:** It costs you nothing to be nice.

**Craig:** And what it comes down to is: Are you so panicked that you are not going to get every little crumb of credit that you have to kick these poor guys in the teeth in front of their colleagues and in front of the press? You just… — I don’t know. It wasn’t his finest moment.

And, look, I don’t know Alexander Payne. I hope that he has apologized for that and won’t do that again.

**John:** Yeah. I hope he is a wonderfully nice guy who just said something stupid, like I say all the time, but didn’t have Stuart to edit out the dumb things he said.

**Craig:** We all need Stuart there in real life.

I mean, look, obviously — obviously — I have said a billion stupid things. And so I don’t mean to come down and say that this was the worst, most horrible thing anyone has ever done. I just felt bad for those other guys, and I just thought it was unnecessary.

**John:** Yeah. Pretty good segue to a question that someone wrote in. Kevin Arbouet, I’m going to say it is Arbouet — he criticized me for mispronouncing his name last time.

**Craig:** It is Arbouet. Yes.

**John:** Arbouet. Two scenarios. I will read the second of the scenarios he proffers. “A friend of yours has sold an original screenplay to a studio. Sometime later your friend calls and tells you that he or she has been fired from the studio. Then, dum-dum-dum, you get a phone call from that studio asking you to rewrite your friend’s script. Do you take the job?”

**Craig:** This happened to me recently. I got a call about a project and actually the director was saying, “Would you be interested in me… — I would like you to write this. Can I pitch you for this job?”

And I always sort of just generally look up, I’m just curious like anybody would, and I saw who had written it prior. And it is somebody I know quite well and I am friendly with. And I said, “Look, I would have to talk to them first.” And that is my thing.

We are all big boys. We are all adults. If you are fired, you are fired. There is no point in keeping your friends from getting work. You are fired. [laughs]

So, that is not the end of the world. I just think that you owe that person a phone call to say, “Is it okay with you if I go in and meet on this?” I can’t imagine anybody ever saying, “No. It is not okay.”

But you know what? If they did, I guess I would respect that. Because, I don’t know, if it is a good friend, you know. Maybe I am a Pollyanna but friends are friends.

**John:** Yeah. Every time I have taken a job that I am going to rewrite, if it is someone’s real project, like this is their thing, they came up with the idea, or they were the first writer on this thing, and I would be going in and sort of being that second writer, I am always going to make that call. And I will always get the number for the person, I will make the call, and it is always super awkward to do it, but I will do it because you owe that to them.

And in most cases it is a huge relief for them because they know who is potentially coming in. They know that you are not a jerk. And they can tell you where all the bodies are buried and who the crazy people are.

**Craig:** Right.

**John:** The times I haven’t done that it has been where like literally it has been a handoff from like a week, to a week, to a week through a whole bunch of people.

**Craig:** Sure.

**John:** In those cases I haven’t worried so much about being the last guy carrying the football.

**Craig:** Yeah. If it is a gangbang you don’t have to kiss the lady. [laughs]

**John:** [laughs] We should explain that a “gangbang” is sort of a term of art in screenwriting in this kind of thing, where it is like you throw a whole bunch of writers at it. And so despite its vulgar connotations, it is a word that you will hear said all the time.

**Craig:** Yes. I apologize to your mother.

**John:** Yeah.

**Craig:** But, yeah, that is true. I have basically the same… — I use the same essential rule set. I will call the prior writer if, always if it is an original script, but even if it is somebody that was close to an adaptation or whatever. Or even if there were two prior writers, I will call them.

Yes. If it is I am one of 100 people that have come and gone, or if the studio has had a particularly bad situation; they just are like, “Leave that person be,” then I won’t do it. I have to say, I have never had a bad one of those conversations. They have always gone really well. If anything, the writers that you are calling are grateful that you are acknowledging that they existed.

So, it has always gone well. And so, as a general etiquette thing, if we are talking about best practices, I would say to our fellow professional writers listening: do this. And by the way, I have to ask the studio. I always say, “Do you mind if I call so and so?” They never care. And do it. It knits you together in a better way. And I have to believe…

In fact, I will tell you a story. I did this… — Well, I will start with in the future, which was in the past. Sorry. [laughs] I need notes for this story already.

**John:** Yeah. So you are time traveling. The Esperanto threw you off.

**Craig:** About two years ago I was having dinner with a friend. She is a producer, and she saw a guy she knew and said, “Oh, blah-blah-blah, come on over.” I won’t use names. And she introduced him to me and she said, “He’s a writer,” and I shook his hand.

And he looked at me and he said, “Wait a second, you are Craig Mazin?” And I said, “Yeah.” And he said, “Dude, seven years ago you called me because you were rewriting me on something, and I never forgot that, and it was the nicest thing. And I really appreciate it.”

And he had been walking… — Seven years he remembered that, which told me probably that nobody else had done it in the seven years that had lapsed. And so I urge everybody to do this. It just, I don’t know, it brings us together.

I’m very Pollyanna today.

**John:** You are. But, I think, I’ve had the same experience. One of my first interactions with Aline Brosh McKenna was on a project that I was going to be coming on board. And it was really her thing, so I had to sort of talk to her. I wanted to talk with her about sort of (A) that she felt okay about it, (B) is sort of figure out why she wasn’t going to be doing the next draft, and sort of what was up with that. And it was good. And we became better friends after that.

Same with the Wibberleys. The Wibberleys rewrote me on the second Charlie’s Angels, and I came back in and rewrote them. And we talked, and talked, and talked, and talked, and it was really good. And so I never met them in person until the premiere of Charlie’s Angels, but I knew who they were. And we actually ended up going through arbitration on that. It was the friendliest arbitration you are ever going to find because we had done that early talking.

**Craig:** [laughs] That’s a great point, by the way, that when it does come time for arbitration, there is a human being on the other end of that thing. And I think a lot of these really ugly arbitrations are about people who are just names on a piece of paper, and who haven’t spoken with you, and you don’t think are real. They are just people out to screw you.

And I do think it helps immensely when you do get to an arbitration to just know that we are all writers trying, you know. So that is my big etiquette speech on that.

Now, on the flip side though: What happens when you find out that you are being rewritten? And I will tell you, the first movie — this was back in 1996, I believe — It was the first job I ever had was an original script that my then writing partner and I did for Disney. And we did our two drafts, but you know, we were true rookies. And an actor was attached.

The movie essentially got a green light, and then they do what they do which is not trust a movie to 25 year olds, but to hire a couple of guys. And they hired Steve Rudnick and Leo Benvenuti who had done The Santa Clause, and were pretty big at Disney.

And they asked that I send over the script, the Final Draft file, or I think we had Final Draft then. And I did. I put it on a disc. [laughs] You know, an actual disc for those guys. It was the era that we lived in. And I wrote a note. It was sort of like it was the file, and then a note that was a file that was entitled, “For Steve and Leo: please read.”

And the note was basically, “Greg and I are really happy that you guys are coming on and we are really excited that you are going to take the script and carry it somewhere great. And if you have any questions or just want to say hi, this is our phone number, and this is our email,” I don’t think we had email, “and thank you so much.”

And they never picked up the phone or said anything. And I just thought that was lame. And, you know, when they got fired, and we got brought back, I felt glee frankly. Because I had thought they had treated two rookies unnecessarily coldly.

**John:** Yeah. Especially after you reached out to them and made it so easy for them to contact you, and made it clear that it wasn’t like a weird bad feeling, that they weren’t going to be walking in to get punched.

**Craig:** Right. Quite the opposite, you know? But I guess my point is, too, when you are being rewritten, and these things happen, nothing wrong with welcoming the next guy along. You didn’t get fired because he got you fired. You got fired because you got fired. And then this woman comes along to rewrite you, and you should be nice to her.

**John:** Yeah.

**Craig:** Or him.

**John:** It is hard to separate the anger and frustration you feel about being fired, about no longer being on board this project. You are angry at the producers, the director, the studio, whoever didn’t believe in your ability to carry the project further forward. And that anger is real, and you have to own it, and try not to be a maniac on the phone when you get the news. But you are going to feel those feelings.

But the guy who is coming on board, it isn’t his fault. And he is not the one who did it to you.

**Craig:** No.

**John:** So anything you can do to reach out. And a lot of times, through the internet, and through how stuff works, it is not that hard to find out who that person is, and figure out the mutual friends or whatever, and try to reach out.

It hurts. And I feel like the times I have been replaced by people and they haven’t acknowledged me have been the situations where the anger just festers longer — my anger about sort of no longer being on board with the project, and just sort of the wondering.

Having that conversation with the next writer at least gives you some closure, and is like, “Okay, I can see what is going on here. I can give them some helpful tips. I can let them know that this one person is an absolute maniac, and to not trust that.” Or, the things that they are trying to do have already been done and it doesn’t mean that they won’t work now in this iteration, but let them know where the bodies are buried.

**Craig:** And then an important thing to point out about all of this stuff is that that phase that you are talking about, where you have either been fired, or you are taking over for somebody that has been fired, is all pre-premiere. That doesn’t mean that you are not going to have your name on the movie. That doesn’t mean that they are not going to have their name on the movie.

You may be sharing credit on this thing. And if that happens, you will be together. And you will be together promoting the movie. And you will be together talking about the movie. Or you will do so separately, but that brings us to a whole other layer on this which is how to deal with press and publicity when you are talking about your movie and you are sharing credit with somebody.

**John:** You can probably generalize it out with your movie versus the movie that got made. And different movies I have been involved with, I’m not at all happy with the final movie. But I am not going to throw the movie under the bus either. I’m not going to throw the filmmakers under the bus.

**Craig:** Right.

**John:** You are trying to be honest about what the experience was, but not negative.

**Craig:** Yeah. While I am entertained by people who throw things under the bus on some sort of lurid level, on the other hand it makes me uncomfortable. And I definitely just feel like there is no cause to be undiplomatic. And you know what is the word I am looking for? The word I am looking for is uncharitable. Don’t be uncharitable in the press.

The simple things in terms of etiquette that I like to talk about any co-writers: I talk about what they brought, and I don’t talk about what they didn’t bring. I talk about the director in a charitable way. And I talk about the actors and what they brought. And there is a funny game that goes on. And you notice it very early on in your career as a screenwriter when you start going through press.

The natural tendency of everybody who isn’t a screenwriter is to talk about everything on screen that wasn’t in the script. And at first you think to yourself, “Why are they being so mean? Why are they obsessed over the 12 adlibs or the thing that they came up with on the day? Why is that so important to talk about?” Because you will hear it all the time in interviews with actors and directors — “You know, that wasn’t even in the script. We just came up with that on the day.”

Well here is why they are saying it, not because they hate you or they disrespect you. It is because they are proud. They are proud of literally writing one-tenth of this thing that you wrote nine-tenths of. Or, maybe the ratio is even more out of whack. But they are just excited because they did it, and that is okay.

And similarly when I talk about the script, I don’t talk about all of the wonderful things that I wrote, “Well I wrote that, and I wrote that, and I wrote that.” I talk about how it was a wonderfully collaborative effort, and then inevitably they will ask, “Was there a lot of adlibbing on the set?” And inevitably I answer, “There was some adlibbing. I mean, largely the guys stuck to the script. Or largely the director followed the script. But always in the moment because we have such a wonderful cast, they are going to come up with interesting things.”

There is your vanilla pudding answer. But you know what, it is actually accurate. So, just be charitable and be cool.

**John:** My frustration comes… — There are actors who will openly disparage the script, not just saying like, “Oh, we came up with a whole bunch of new stuff.” And you and I know who we are talking about. We are not going to say his name because we hope to… — We should be so lucky to work with him. But who actually say like, “I don’t like the script at all. I hated the script. But I thought…”

**Craig:** I will never work with him. There is no chance that I will ever work with him. [laughs] It’s not my kind of guy.

**John:** Yeah.

**Craig:** But, whatever. He is not the only one.

**John:** And I worked with a probably bigger actor who had similar kinds of things where he would… — It wasn’t just like, “Oh, we adlibbed some stuff.” It was like, “Oh, we ripped out the pages and started over from scratch.”

It is like, yeah, you managed to rip up the pages, but somehow you ended up saying exactly what I had written. So it is great that you were able to sort of recreate what I had done, but that is not really…

**Craig:** Look, when they are being truly aggressive… — Well, okay, two things. First, if you can end up having a good professional relationship with the actor, the odds of that occurring go down. That is not always the case. There are times when you write a script, you are disappeared off the movie, and then the actor eight months later is on TV talking about how your script sucked. That is brutal. They shouldn’t do that. I wish they wouldn’t do that. And there is nothing charitable to say about that.

If you can have a positive relationship with the actor, 9 times out of 10 they are not going to do that just because now you are a human being that they are not going to be mean to. In the overall analysis though, we should be clear about one thing: Nobody really cares.

Nobody really believes that actors… Either people really believe that actors write everything, because they don’t know that screenplays exist, or if they know that screenplays exist, don’t really believe that actors write every line. Everybody kind of knows how movies are made if they know how movies are made. If they don’t, it doesn’t matter anyway.

Either way it doesn’t matter. So I don’t get too worked up over it, I guess, is my point. I would rather take the high road and be the guy that is charitable. And if somebody takes shots at the script in the press, what are you going to do?

**John:** Yes. I think we are calling for best behavior by writers because we can’t get best behavior out of everyone else. Control what you can control. Do what best you can do for yourself.

**Craig:** Listen. If you are an actor, or a director or producer and you are listening to this, you should also please show best behavior. Because I mean unless someone has been a total jerk, you know, come on.

**John:** I think the number of A-list actors who are listening to this podcast is low. But maybe there are some future A-list actors listening to the show and we will inspire them to do the right thing.

**Craig:** Yes. Exactly.

**John:** That’s my hope.

**Craig:** Thank you. You have given me great hope. We have changed the future, precisely. [laughs]

**John:** Let’s finish up with one more etiquette question. Mike asks, “What is the etiquette in following up with producers to see if they have read your script?”

So, I think he is talking about sort of like a spec kind of situation. I have heard one month is reasonable. I don’t want to be pushy, but I want to stay on their radar. One month is a really long time, if you are actually working for them, that is far too long.

**Craig:** Oh, yeah, no. If you are working for somebody, that is a different story. At that point they are actually just hurting the project by not doing their job. Now, that said, there are some places where the wheel turns really slowly.

I mean, I remember, I worked on a project for Bruckheimer. And I love those guys, I love… — Mike Stenson and Chad Oman, great guys, would take forever — would take forever — to get back to me. Sometimes it would take them two months.

But then they would come back to me, and then the notes were really good, and we would do another draft, and then it would happen again. And, you know, once I realized that that was their rhythm, I was like, “Well, you know, I will see if I can fit other things in. This is one of those deals.”

But if you are sending a spec to a producer with a query letter or something like that… — Is it quAIRy or quEARy?

**John:** I think either one is acceptable.

**Craig:** I like quEARy. Then, yeah, I think a month is a pretty good check in time. Maybe three weeks. Not bad.

**John:** Yeah. Maybe it is a situation where you met the producer that said, “Hey, send me that thing.” And you sent them that thing, and you haven’t heard back. A month? Somewhere between two weeks and a month is probably good. I mean, that first check in is just like, “Want to make sure you got it. And make sure that it was what you were looking for.” It reminds them that you exist.

There have been times where I have asked people to do a first person thing. So a lot of times with the first person posts on the blog, I will get like six of them at once and I will sort of pace them out, but then I will kind of forget about one. And so it is really good when that person will remind me, like, “Hey, I wrote this thing for you. I just want to make sure that it is okay.” And it is like, “Yeah, that was exactly the right phrasing, this is exactly the way you would talk to a producer saying, like, ‘Hey, just want to make sure you got this thing that I sent you.'”

**Craig:** Yeah. I mean, the truth of how this all shakes out per human psychology, and Hollywood human psychology is incredibly predictable human psychology, very consistent human psychology. If you send 15 follow-up letters for your script, and it is good, you were persistent. If it is bad, you were a lunatic nudge, and a stalker. And that is the way it goes.

Everything will ultimately be processed through the lens of the quality of the script. And since that is already finished by the time you are writing your follow-ups, I would just advise to you: Relax and follow up as you feel the need to.

**John:** Mike’s second question here was, “Do producers usually give you a yay/nay, or is the lack of response code for a pass?”

**Craig:** [laughs] Well, you know, I always say there are 14 million ways to say no, and only one way to say yes. And so, everything other than the word “yes” is “no.”

**John:** Yeah. At a certain point you can assume silence is a no. If they are not getting back to you even about your checking in, that you got something, then it is a pass. And that is okay.

**Craig:** Yeah. And don’t bother sending strongly-worded letters trying to teach them etiquette because they don’t care. And they will just never read anything else that you ever send. It is just pointless. And depending on who they are, they may just be deluged with scripts. Or they may have just really, really hated it. Sometimes it is your fault.

**John:** Or it is just not for them at all.

**Craig:** Right.

**John:** They read three pages and were like, “Nope, this isn’t a movie I want to make.” And so they are not taking the time to email you back or give you an official pass or whatever else. Sorry.

Eventually that becomes your agent’s job to follow up with that. And so they, on one of the weekly phone calls they have with that person, they will say, “Did you read this?” “Yeah, it wasn’t for us.” And that is the effective pass.

**Craig:** Yes. That is exactly right. That is exactly right.

**John:** So, Craig, this week I had the good fortune of being asked to be a mentor for some of the new members of the WGA . So, and I think it is every six months or every quarter as the WGA brings in new members, people who sold their first script or got hired on a TV show, or come in through some new media kind of project, which I don’t really understand, they are invited to the Guild to sort of talk them through, like, “This is the Writers Guild. This is how your residuals work.” And all that kind of stuff

**Craig:** I, too, am a mentor to lovely new writers.

**John:** How many mentees do you have?

**Craig:** I share mine with Ted Elliott. The two of us are team-mentoring I think five writers.

**John:** [laughs] Oh god! I fear for those people. They are going to get so confused.

**Craig:** It just means that I am mentoring them because I don’t think Ted writes them back. [laughs]

**John:** [laughs] If Ted wrote them back, Ted Elliott — who is a brilliant man — but Ted will write them like 19 dense paragraphs about esoteric details of the WGA.

**Craig:** Ted’s normal speech mode is technical manual.

**John:** Yeah.

**Craig:** So, yeah. I don’t know… — I knew when I took them on as…

It was sort of like when Ted and I started The Artful Writer I knew that that meant that I was starting The Artful Writer. He did write one blog article in — I think we were operative for six years — he wrote one article.

**John:** It was your site, exactly.

**Craig:** Yeah, that’s right.

**John:** So, anyway, my mentees, they are great. And so I think my official commitment for them is that I have to have some meal with them, and then I will answer their questions as questions come up via email or phone or things like that. But I have a great group.

And so what was exiting talking about spec scripts is this one guy sold two spec scripts in the last six months.

**Craig:** Wow! Great.

**John:** And I’m like, wow, that happens?! That’s great. I had sort of assumed that spec scripts weren’t really happening now because it is not my business, but…

**Craig:** No, but they are. The market has definitely revived, or relatively revived.

**John:** Yeah. So it is not the heyday of the giant 7-figure deals for everything, but still that’s great.

**Craig:** No, it’s not the Last Boy Scout kind of days, but it is not as bad as it was sort of like around 2006 or whatever, where literally no one even bothered.

**John:** That was good. Exciting.

**Craig:** That is good. Excellent. Well good for him, or her.

**John:** Hurray.

**Craig:** So I feel like we…

**John:** We talked about some etiquette, yeah.

**Craig:** …we bettered the world.

**John:** That’s the hope. That is the hope with any podcast, I think, is to make the world a little bit better than where we found it before.

**Craig:** This is my only outlet for bettering the world. Everything else that I do is about ruining it, so, thank you for providing me with this opportunity.

**John:** I try to provide a positive forum for your happy thoughts so that all of your negative thoughts can be translated into things.

**Craig:** Yes. I have to go out and ruin someone’s life now.

**John:** Craig, thank you for bringing some sunshine into my day.

**Craig:** Yeah. You know what? You are always a ray of sunshine. I wonder if that is going to work its way into the… — Do we dare talk about this ridiculous drinking game? Your guys lost their minds.

**John:** Yes. So here is the thing. And we will see if this actually stays in the edit or not. There is a drinking game that was formed about our podcast. And I assumed that it was…

It was presented to me as this anonymous cabal of people who did this. And they were like, “What do you think of this?” And I’m like, “Oh, it is kind of amusing.” But then I realized that it is actually some of my people and some of my posse are doing it. So, I have given them the official notice that I want nothing to do with this. And so if they end up making it, that is their extracurricular project, but I am having no official part of it.

**Craig:** It is so strange. [laughs] But it is fascinating. I will say that there is something very flattering about having identifiable verbal ticks, because you can’t really hear your own verbal ticks, but apparently I start a lot of sentences by saying, “Look,” which I didn’t realize. That’s cool. I like that.

**John:** And I do this thing where you will make a very long pronouncement about something, and I will say, “Yeah.”

**Craig:** Now that I noticed. [laughs] Because sometimes I feel like I have just delivered this wonderful sermon on the mount, and then there is a little bit of pause, and then, “Yup.” And I think, “Oh, god!”

**John:** Yeah. But how am I supposed to respond to this sermon on the mount? That is the whole issue. I can’t just applaud. Applause sounds weird.

**Craig:** I mean, why not. I think you should applaud.

**John:** Okay, I probably should applaud.

**Craig:** You should applaud. You know what we really need is like a Robin Quivers in here, too.

**John:** Oh, thank you! That is what we are completely missing. Someone who thinks all of our jokes are really funny…

**Craig:** That is exactly right. Somebody that is laughing at everything we are saying, so you don’t have to do it. She does it. In fact, let’s get Aline. Let’s get Aline Brosh McKenna to do it.

**John:** She is not busy writing 15 other movies.

**Craig:** No! And also she is naturally prone to laugh at everything we say.

**John:** That’s a good thing. It’s a very key point.

**Craig:** She is not at all demanding, or critical.

**John:** Yeah.

**Craig:** No one scares me more than Aline Brosh McKenna. You know, I have said this to her a hundred times. I’m frightened to death of her.

**John:** Yeah. One disapproving glare from Aline Brosh McKenna and I am ruined. I am in bed for the rest of the day.

**Craig:** Literally done for the day.

**John:** What is interesting also I found is that I listen to most of my podcasts at double speed, which some people criticize as, like, that is not the true art, but I am used to everything being double speed. And so on the rare occasions where I have to listen to things on the web, so I am not listening to it through my little player, I listen to it in normal speed and everyone’s voices sound completely wrong.

And people who I think are really, really funny are noticeably less funny when that pacing is different.

**Craig:** Yeah, you know, I like this idea. I’m going to start doing that, too, listening to it at double speed.

**John:** Yeah. Because there is no reason this podcast should be 34 minutes long. It should be 17 minutes long.

**Craig:** Yeah. Well let’s see if we can get it down to five minutes; let’s go quadruple speed.

**John:** Good. Done.

**Craig:** [laughs] I don’t think you should edit this out. This is the most fun we have had yet.

**John:** Good. So it is in there and so everyone can enjoy it. And they can enjoy another week’s podcast. This was episode 26. Episode 27 will be about something.

**Craig:** Something exciting.

**John:** And we will talk to you then. Thanks Craig.

**Craig:** Thanks John. Bye.

**John:** Bye.

The original post for this episode can be found [here](http://johnaugust.com/2012/six-figure-advice).

**John August:** Hello and welcome. This is John August.

**Craig Mazin:** My name is Craig Mazin.

**John:** And you are listening to Scriptnotes, a podcast about screenwriting and things that are interesting to screenwriters.

How are you, Craig?

**Craig:** I’m doing great. I know that that is a rhetorical question, but actually lately I have been having…

You know those days where you can’t seem to get on top of your own schedule? You are running behind on everything, and even the strange little quirks of circumstance seem to conspire against you and make you later, and later, and later? And for the last week everything has just been falling into place. Like today I knew that I had to be here to do this podcast with you and I was at Universal and this meeting was running long and then there was a lunch, and it just worked out almost to the minute that I was here on time.

Because… — I don’t know. The clouds parted. The sun shone through. Just things have been going my way.

**John:** Well that’s great. Congratulations.

**Craig:** No, no, no. That’s not great. That means that very soon…

**John:** Oh, I’m sorry, yes. I feel bad for you because it clearly means that your run is about to end and you will be sad soon.

**Craig:** The regression to the mean will occur.

**John:** The regression to the mean will inevitably occur.

**Craig:** Inevitably.

**John:** I had a… — I was in New York for almost two weeks to do casting for Big Fish. And I had to speak… — I was invited to speak to the film school out in the Bronx. It’s this public school that has this amazing film program there and so they invited me to speak. And it was… — Of course I’m going to go out and speak to them.

And I was so convinced that I was going to make it there in plenty of time. I was taking the 6 and I was going to get up there, and the trains conspired against me.

**Craig:** Mmm.

**John:** So, it was one of those days where I had the opposite of the Craig Mazin luck, and I watched as my speaking time passed while I was still on the train that was stopped on the tracks for about 15 minutes.

**Craig:** No way!

**John:** Yeah.

**Craig:** It was stopped?

**John:** It was stopped.

**Craig:** Oh, eh, it was probably a suicide.

**John:** Oh, yeah. That’s a good way to think about it.

**Craig:** Yeah.

**John:** So my minor inconvenience versus some family who lost a loved one.

**Craig:** Well you always want there to be some kind of death at the other end of any kind of commuting stoppage. I feel like if I am going to stop, there should be a price in blood.

**John:** Yeah.

**Craig:** Yeah.

**John:** But I did finally make it to speak to this film school in the Bronx, which is this amazing film program which I was so incredibly envious of these students because they are in high school but they are studying making movies. And they have to do all of the normal stuff you have to do in high school, and all the basic requirements, but they get to shoot movies and talk to filmmakers. And I am just incredibly envious of people who get to come of age in this time of wonder.

**Craig:** Yeah. What school is this in the Bronx?

**John:** It is called — and I will put a link to it in the show notes — but it was called the Cinema School. It is a New York Public School, but it is especially funded for the arts. And so I think it is an equivalent of the Fame school if you were a dancer, but if you were a director or a screenwriter you might get to go to this school.

**Craig:** Right. Like there is the Bronx High School of Science which is the science version of that; it’s public. And it is selective I presume?

**John:** It is selective. Yes. You have to sort of apply to it and get in to it. But it is not a charter school in the normal sense.

**Craig:** Right.

**John:** It somehow magically works and they got money to do it. And God bless them.

**Craig:** Yeah, no, it’s like Hunter High School and Stuyvesant High School, Midwood — I think it is called — yeah, it’s like a pre-med.

New York actually has a really cool system like that; it’s smart that they have a movie one.

Yeah, you are envious of those kids in a positive way, and I hate them for having advantages I didn’t have. So…

**John:** That pretty much explains the difference between you and me.

**Craig:** Yup. White and dark. Here we go. Yin and yang. Let’s do this. [laughs]

**John:** I was talking to Dana Fox this week, who is busy casting her TV show. She has a… — Dana Fox, who is my former assistant and a very good friend, she sold a show to Fox, the studio, and Fox the network about her brother, Ben Fox.

So there are so many Foxes involved that it is kind of crazy.

**Craig:** Yes. I mean, I could say that is pretty Foxed up, but, well, I’m not going to say that.

**John:** Yeah, that would be kind of a hackneyed joke.

**Craig:** I did not just say that. It didn’t happen.

**John:** No. But I’m not going to let Stuart cut that out. That’s going to stay.

**Craig:** No. He shouldn’t cut it out. It is evidence that I didn’t do it.

**John:** Ah, okay. Yeah. But talking to her about casting, because she is in the middle of casting right now, and I just came out of a casting thing, made me really think about the difference between feature casting, and TV casting, and Broadway casting.

When you are casting a feature, you have actors come in and they are reading the sides; they are reading the scenes from the actual script of your movie. Or, sometimes you will write special scenes that are better for figuring out who these people are. But your only question is: Can they perform the scenes that are in your film?

When you are casting a TV show it is really a different experience because you are wondering, “Well, will they be good in the pilot, but will they also be able to do stuff like three years down the road when our show is a giant hit?” It is all of this sort of… — You are banking on what that person is going to become. It is a very different process.

**Craig:** Mmm. Yes. I could see that. Casting for movies is very limited and narrow and, yes, you are going to…

And also, you only have to perform it once for a movie. But you have to find somebody with some kind of stamina, social stability, the availability to just commit to this for a really long time. Totally different animal.

**John:** It is. If you are casting a feature, sometimes you are willing to put up with an incredibly difficult person because it is just a feature, and they are going to shoot however many weeks and then they are done and they are gone. You never have to see them again.

**Craig:** Right.

**John:** If you are casting a TV show, you are saying, “Do I want to show up to work every day to deal with this person?” And a lot of times the answer is no.

**Craig:** Yeah. Yeah. So, how is that going for her?

**John:** Good I think. I think it is going to have an amazing cast. It’s a good, funny script. She’s awesome.

**Craig:** She is definitely one of the… — I would say she is probably the sunniest writer I have ever met.

**John:** Yeah. Sunny is a nice word. I like sunny.

**Craig:** Yeah. Very sunny.

**John:** Right now, she is a consulting producer on, or some sort of producer, on the New Girl, and the new show has a similar vibe and, I think, a similar opportunity for future success as that show.

**Craig:** Cool.

**John:** Speaking of success, I thought today we would focus on, well, what I would call “Six Figure Advice.” Because we did a previous podcast, I called it “Five Figure Advice,” which is when you are just starting to work, and you are starting to make five figures. So, $50,000, $60,000, you are getting paid to write and that is a great thing. So we talked about what life was like at that level.

**Craig:** Right.

**John:** Now I want to talk about the six figure advice. So, you are making more than $100,000, probably a fair chunk more than $100,000, and a lot of your decisions about things might be a little different. Your life looks a little different. And, based on my experience with screenwriter friends, the people who have problems with money and finances, a lot of times it really happens at about this level.

Because when you are just starting to make money you kind of know what that is like. You sort of know what it is like to live paycheck to paycheck. You know how to sort of pay for things and sort of how much, you know, to pay off your credit cards and that kind of stuff. When you hit the six figures, you are not sure if you are rich or not. You are not sure how much money is really coming in. You are not sure what your life is supposed to look like. And people make the wrong assumptions about what their life should look like. And then they end up having to take jobs out of desperation because they burned through their money quicker than they thought they would.

**Craig:** Yeah. Well that is a really good way of putting it, that people sit around and think to themselves, “What should my life look like now that I am a writer of a ‘this’ kind of movie or now that I have made this much money in a year?” And that is exactly where people go wrong because if you decide what your life should look like, what you are really basing it is on other people’s lives.

And what I have come to discover is, you have no idea truly what is going on in other people’s bank accounts. There are people who make so much more than I do, and you would never know. There are people who make so much less than I do, and you would think they make way more.

**John:** Yeah.

**Craig:** People spend and borrow at rates that are widely disparate. So, put out of your mind what you think your life should look like, and instead just take a look at what is real for you; so that is sort of a basic starting place.

**John:** Yeah. The underlying advice behind all of this is: really pick a life that is comfortable for you, that you can easily maintain, at even less money than you are making right now. And pretend that you never make more money than that, and then you won’t go bankrupt. Then you won’t run out of money most likely.

**Craig:** Yeah. I mean, I guess, first of all, don’t be the kind of person that defines your life by the stuff that you buy, which is hard for some people I think.

But I like, sort of the first advice is, because I feel when you start making a certain amount of money and you are looking at ways to maximize what you earn, the number one way to maximize what you earn is to pay less in taxes. [laughs] That is… — Because that is something that you actually have some control over, whereas an agent will take 10%

So we talk about incorporating, and we talk about saving money for retirement. So I guess we should probably start with incorporating.

**John:** We should talk about incorporation. So, maybe a little bit of prefacing: By the time you are making six figures, you likely have some sort of a team who is working for you. So you would have an agent, certainly, at this point. You would have a lawyer who is making your deals. Those are kind of givens; it is unlikely that you are paying a lawyer per contract or something. You have a lawyer who is taking a percentage, taking 5%.

**Craig:** Right.

**John:** You might have a business manager — sorry — a literary manager, someone who is your manager, who is legally not soliciting work on your behalf but is working for you. So that might be another percentage of some money going out.

You are also probably incorporating at some point in this stage. It always used to be, the rule of thumb I always heard is, when you are making more than $200,000 a year consistently…

**Craig:** Right.

**John:** …then you incorporate. I don’t know if that is still the advice, but…

**Craig:** Yeah. I have heard the…

**John:** Your lawyer would tell you that.

**Craig:** $250,000. I mean because the deal is that there are benefits that come with incorporating but there are also some costs that go along with incorporating. And so the math is to do the cost benefit and the break point where it seems like it evens out is somewhere in that $200,000 to $300,000 a year range. So, you are right. The first thing you have to ask yourself is, “Is this real? Am I actually going to be making this on a year-to-year basis?”

So you have to actually get good at sort of figuring out what your deal is, and whether you have just had one big success that you may not be able to replicate. And the key is year after year. If you sell a script for $1 million in 2013, and then you don’t sell anything in 2014, you would get hurt by the corporate stuff in a weird way, I think.

You need to kind of be able, I think, you need to be able to replicate your success, in some way, year after year after year. And to that end, and it is a little difficult to do sometimes, talk to your agent and say, “Let’s just have a, forget about coddling me, don’t worry about my feelings, let’s just be super realistic so I can plan for my family — for me and for my family. What do we expect?”

**John:** And really, you can only be planning it based on, I think, writing assignments. Because you can’t plan, “I’m going to sell a spec every year.” That is just not going to happen.

**Craig:** You are so right.

**John:** Yeah. You are only going to be making $200,000 to $300,000 a year if you are pretty consistently being hired to write things for people. And, so if you have nested jobs where you are doing a rewrite on something and you are starting a first draft on something else, and that is pretty consistently your life; if there are always two things that are vying for your attention, likely you are going to start to make the kind of money where incorporation makes sense.

But if it is just a situation where you sold one script, then it is not time to incorporate yet. I didn’t incorporate until after Go. So, I had already sold three things — been hired to write three things — but I wasn’t making enough money that it made sense for me to incorporate.

So when I get my residual statements it is really interesting, sort of like a little history lesson.

**Craig:** [laughs] Right.

**John:** The residuals for Go go to John August. The residuals for everything after that point go to my loan-out corporation, because by the time I made the contracts for those other movies I was a loan-out.

Glossary entry here. A loan-out is another word for a corporation. So a loan-out is basically the company; rather than hiring you specifically, they are hiring your corporation. And your corporation is hiring you and loaning you to the company to do the work.

**Craig:** That’s right. Usually people are an S Corp. There are two kinds of California corporations, S Corp… — Actually, it is a federal designation, S Corp and C Corp, I think. And the idea is not to shield you from any legal stuff; it doesn’t. All it really does is give you the benefits of some tax work so that you minimize the amount of tax you pay. That is pretty much what it comes down to. Taxes.

**John:** It does. And when you are saying shield you from taxes, what it lets you do is expenses that you are accruing in business, you are able to take them, to pay for them as the business rather than having to pay for them as an individual.

So, rent on an office, an assistant if you have an assistant, agent fees, other things like that can be taken out on a corporate level before you are writing the check for yourself as an individual.

**Craig:** Yeah.

**John:** So, essentially, the corporation is paying you on an annual basis, or more often than annually. But in return for that, you have to do quarterly taxes and a lot of other special filings that are a hassle.

**Craig:** Yeah. I mean, first of all there is an expense involved in just incorporating itself. But, there is another thing, one of the more hated aspects of the tax code is called the Alternative Minimum Tax where basically if you are an individual and you make a lot of money you can write-off a whole bunch of stuff if you want, but then they basically at some point say, “You have still made too much money. We are just going to now add more tax on.” You can’t write-off all that stuff because you are not a business. You are an individual. You couldn’t possibly be doing that much as an individual that is a business expense.

But corporations don’t have alternate minimum taxation. If you run a business and you bring in $1 million, and you spent $1 million to get that $1 million, you have a net taxable income of zippo.

So, while screenwriters don’t have the kind of expenses that go along with a shop, we do have our internet, and our cable, and if we go to see movies for research, and buying books, and traveling, and leasing a car, and all this other stuff. Oh, like I have an office, you know, so my rent here. And all of that gets taken off of the amount.

So, right off the bat, you have to talk to your accountant if it is time for you to incorporate and you incorporate. And I would say every single professional screenwriter we know that has been working for more than a couple of years is incorporated.

**John:** Yeah. Now I want to back up, because my understanding when I first formed a loan-out was that there was some legal shielding, that there were good reasons for, like, not losing your house for going through a loan-out rather than going directly, making a contract directly. But that is not your understanding?

**Craig:** Eh, they call it “piercing the veil,” where if you have a corporation that is really just you, and your corporation incurs some kind of legal liability, they will go after you. They can go after the officers of the company if their feeling is that people are individually doing wrong, but then hiding behind a corporation as if the corporation did wrong. There are fewer protections than you would think.

Now, that said, I should point out we don’t have that problem as screenwriters, because the only real liability we can incur is when a studio…

For instance, when The Hangover, when Warner Brothers, and Hangover Part II, and Todd Phillips, and I, and Scott Armstrong were all sued by this kooky guy who claimed that we stole his life, I got served papers until he withdrew the suit. But in our deals with the studios, they always indemnify us. They always say, basically, “You say that you didn’t steal it and we promise to cover your legal fees and all the rest of it if you are sued.”

So, given that, because I don’t really know what other legal liability we could incur.

**John:** But couldn’t it be sexual harassment or some other kind of discrimination?

**Craig:** Hmm.

**John:** I just could envision some other things which they might go after you differently as a corporation.

**Craig:** That’s true. I guess, like, for instance if you are on a set and you do something to sexually harass somebody. The point is, no, your corporation is not going to protect you from that because your corporation didn’t sexually harass somebody, you did. [laugh] And they are too smart for it.

I mean you can’t… — Maybe I suppose in some narrow place it might be advantageous legally, but really what it comes down to is taxes.

**John:** Yeah. Now on the subject of taxes, at this stage you would likely have an accountant who is figuring out your taxes, because your taxes would be more complicated than what you are likely to be able to do with just simple Quicken and the tax software.

**Craig:** Oh yeah.

**John:** It gets more complicated. A lot of people will have a business manager. I had a business manager right about the time that I formed the loan-out corporation. But I think you don’t. Is that still the case?

**Craig:** I do not. Yeah. I do have a tax guy who handles my taxes. And I have obviously an investment guy who handles investments. But when it comes to… — Business managers tend to do things like pay your bills, calculate the taxes that you might expect to owe and make the installations, handle your payroll. Because one of the quirks of being a loan-out company is that you tend to have to employ a payroll service to make it seem like a real company. So you actually pay yourself from one account to another, which is a bit odd. And then they handle things like your dues and, I don’t know, stuff like that.

I do all of that on Quicken. It is not that hard, you know. So I take 45 minutes every third day, pay my bills, do it all through Quicken. Bing, bang boom and I am done.

**John:** Yeah. So I have a business manager so I don’t do that. And partly it is because I will be gone on a set and I won’t be able to think about that stuff. I will just submarine into a project, and I won’t come out for a long time, and stuff wouldn’t get done otherwise, which is just the reality of sort of my life and my situation.

The danger of having a business manager, I would say, is it can insulate you from the realities of your money.

**Craig:** Yeah.

**John:** And the people who run into problems, they really have no sense of how much money they have or what they could be doing or should be doing, and that can be very dangerous. So I think it is less likely that your business manager is going to rip you off. It is more likely that you are not going to be paying attention to how much money you actually have and will get into trouble because of that.

**Craig:** Yeah, look, there are two problems with business managers as far as I can tell. One is precisely what you said, that you become infantilized to some extent, and everybody is different, and I suspect that you are pretty grown up about it. But some people really do in an almost child-like way hire these people to be their mommy and daddy, almost like they are living on an allowance from these people. And so they don’t know what their liabilities are, and they are not really in control of their destiny. The other problem is that they cost 5% often, and that is a lot of money.

Any percentage of what a very successful screenwriter makes is an enormous amount of money for what oftentimes amounts to somebody who is basically doing what I am doing 45 minutes every few days on Quicken.

**John:** Yup. I’m paying a flat monthly fee…

**Craig:** Okay, that’s better.

**John:** …which is, I think, a little bit more reasonable.

**Craig:** Yes. And that is fine. And I would say that I am in the minority, probably, of screenwriters in that I don’t use a business manager, but I do stay on top of my money and I know where it is. I like to have control of these things.

**John:** Yeah. On sort of control, insurance is the kind of thing that you are going to start thinking about more as you get into six figures. So you will have health insurance through the WGA. If you are working consistently, you are going to have health insurance, which is great. But you may need disability insurance, which was a real surprise when it was first raised to me.

As presented to me, disability insurance is important if your earning potential is much greater than your actual assets are going to be. So, as it was explained to me, and you can correct me if you feel that I am misspeaking, if I got hit by a bus and was no longer able to write, at a certain stage in my career that would have been really catastrophic because everything I could have made I would not be able to make anymore, and that was going to be a real problem. Now that my assets are bigger than sort of the money that I can make over a couple of years, it is less of a factor.

But for a time, it was really important that we find somebody to give me disability insurance. It ended up being, like, Lloyd’s of London to protect me in that situation.

**Craig:** You are absolutely right in the way you described it. I never did it. And I didn’t do it because there were a couple of problems. One, when you get disability insurance as a screenwriter, it is a little punitive because they are going to presume that whatever money you made this year, or whatever money you made in the most, that is what they are going to have to pay out. So they jack your premiums up pretty high. And the truth is, what disability short of brain damage is going to incur in such a way as to keep me from writing. If you smash my fingers I can still write. If I get hit by a bus, and I am laid up for a few months, I can still write. It is not like we drive a bus or use our eyesight. I mean, we can be blinded. [laughs] I started running down the list of stuff where it was so extreme that, basically, it was far more likely that I would be dead than disabled to the point where I couldn’t write anymore. So…

**John:** Yes. A traumatic head injury; that’s always my favorite.

**Craig:** Pretty much traumatic head injury. Eh, I don’t know. It is a little bit like earthquake insurance. Like, for instance, here in California, the State of California requires insurers to offer the option of earthquake insurance or they are not allowed to basically sell any insurance in the state. The insurers, of course, turned back to California and said, “We can’t offer earthquake insurance. It is impossible, because when an earthquake happens we are going to be bankrupted.”

So they came up with this nonsense called the Fair Plan, where basically they charge you a very high amount of money and, in exchange for that amount of money, you are insured against earthquakes. But you are not really insured against earthquakes because there is a premium. So if there is earthquake damage, you have to pay 20%, I think, of the value of your house just right off the bat.

**John:** Yeah.

**Craig:** And then they cover the rest of the structure. But the point is there is never 20% damage to your house. It is like 5% or all of it. So if it is all of it, just walk away. If it is 5%, you are not going to get any insurance money anyway. So very few people take the earthquake insurance, and that is kind of the way I saw disability.

I’m sure people are going to write in angrily and say that I am insane and I should get it, but…

**John:** Yeah. And I am not sure it is going to be as important for you to get it at this stage in your career as it was a couple of years ago.

**Craig:** So I got away with something. [laughs]

**John:** You snuck away with it.

**Craig:** I love it.

**John:** Look at my friends Chad and Dara. They just recently got disability insurance because they are at exactly that stage in their career where their earning potential is much greater than their actual assets would be at this point.

**Craig:** Right. That makes sense.

**John:** And life insurance is a similar situation where life insurance is important for a family up to a certain point of income, up to a certain point of assets. But once the assets are actually significantly bigger than the yearly income it is not as big a deal.

**Craig:** It is not as big a deal. And obviously, the older you get it becomes less and less important.

**John:** Now simpler decisions, I think they are simpler decisions, for younger people who are facing this is your student loans. And I think I see people rush to pay off their student loans, which I think can be a mistake. Student loans are the cheapest loans you are going to find outside of a mortgage. If the money is burning a hole in your pocket, I guess better to pay off your student loans than buy a fancy car.

**Craig:** Right.

**John:** But it is not the best use of your money.

**Craig:** Well, yeah, let’s talk about loans in general, because as you make money you do… — Look, you don’t need to become obsessed with finances. I actually, I don’t really like the subject of money. And when I say I don’t like it, it is not that it turns me off, it is just not… — I don’t have any passion for it.

But it behooves us to at least know some basics. And one of the basics of finance is what is the cost of money, what is the interest rate, what do people charge you for loans. And right now they are at historically low rates.

Student loans have traditionally always been artificially low because they are supported by the government, to some extent. And you are right; if you can, there are some kinds of loans that are good to have. I have a mortgage. I could pay off my mortgage, but I don’t because the interest is deductible for my taxes. I might as well just hold on to that money, let it grow at a certain rate, take the tax benefit, and if it is such time that rates should move in such a way that it doesn’t make sense, then I will pay it.

So, there are certain kinds of loans where it is okay to have. Here are the loans that are not okay. So, yes, student loans, yes. Mortgages, yes. Smart mortgages. Credit cards. Never.

**John:** Yes. You should never. And if you are making this much money you should never be carrying a balance on your credit cards. That is ridiculous.

**Craig:** Ever. I mean, I don’t care what you make. If you’re…

**John:** But particularly at this level of the podcast you should not be paying less than everything.

**Craig:** That’s right. Because credit card interest rates are always much, much higher than what you can get in the bank, and oftentimes wildly higher to the point of usury. You see rates of 17%, 18%, 19%, 20% when the prime rate right now is almost zero. Money is almost free at this point.

So, get all of your money off your credit cards. If you have any on your credit cards it is insane. And then start, I would say the next best thing you could do is figure out retirement, which seems a little weird, because I started thinking about that when I was 21. But it is the best savings, the best investment you can make.

**John:** Yeah. So, to back up a little bit, if you have a loan-out corporation, one of the advantages of your loan-out corporation is you can set up a pension plan.

**Craig:** Yup.

**John:** And that is one way to sort of divert some of your money to that pension that is in your name. And you can’t sock away all that much money, but you can sock away some money, and that helps.

Writers Guild has a pension. It is not going to be a ton.

**Craig:** Well, it depends on what you earn and how many years you have earned. I mean, it could be nice.

**John:** Yeah. But most of what you are thinking about for retirement is really just the money you didn’t spend. That’s the money you earned that you stuck in an account and forgot about. And that is your retirement.

**Craig:** Well, there is, look, level one as you alluded to, there are what they call Qualified Plans. A Qualified Plan is any kind of investment plan where you put your money in, specifically for retirement. You can’t touch it until you are 65; if you do there are penalties. But if you can be good, and not touch it until you are 65, there is a tremendous tax savings on that money.

Traditionally, you don’t actually get taxed on that income. So if you can sock away, and when you have a corporation you are right, you can set up your own 401(k) plan. Maybe you put in $40,000. That is $40,000 untaxed dollars. And when you are a big shot screenwriter, your tax rate is nearly half. So, that’s a lot of money that you are saving right then and there.

So, job number one is maximize as much as you can into a Qualified Plan. It saves a huge amount of money.

Then, I think the next thing that you are talking about is saving. The lost art of saving.

**John:** Yeah. Keeping the money. Just don’t spend it. Don’t be Derek Haas and set up your line of credit at the Hard Rock Casino.

**Craig:** Well, you know, you can, because I have gambled with Derek, and he is like a leprechaun.

So, like, he has a line of credit and then amazingly… — I didn’t understand how that line of credit stuff works, and then I did it with him. We were at the Wynn. So, you open up a line of credit, let’s say for $10,000. And then you sit down at a table and you say, “I want a marker for $2,000.” So they give you $2,000. You don’t have to give them any cash. And then they have you sign a check, and the check is to them for $2,000. Right.

Then, let’s say you win, and now you have $4,000 in chips. You go to the cashier and you say, “I would like to buy back my marker.” And you give them $2,000 in chips and they come back and they give you that check and you rip it up. And ripping that thing up is the greatest feeling in the world. It is actually, really; it is like a huge dopamine reward. Super… — God, gambling is pernicious.

**John:** Yeah. It’s all the fun of destruction, plus there is money involved.

**Craig:** Yeah. Yeah. And just like how cool — you are like, “Look at me. I’m ripping up a check! Screw you. I win.”

**John:** On a less dopamine-inducing aspect of money, if we are talking about retirement, I think we have to be honest about the lifecycle of a screenwriter.

And so you are unlikely to be making this six figures for your whole career. And your whole career may be a lot shorter than you would like it to be. There are not many screenwriters in their 50s who are making that much money.

And that is the issue, is that your maximum earning as a screenwriter tends to come in maybe, it’s not your first year. It is probably years five through ten.

**Craig:** Yeah.

**John:** And after that point, some people will continue to make a ton of money, but most people won’t so much.

**Craig:** Yeah. I mean, look, what they don’t… — Everybody has their eye on what they call their big break, where you break into the business. And no one tells you that right after the break is a cliff where almost everyone that got their break falls off the cliff. And this is what is so, and frankly, it has gotten worse as far as I can tell. It is a harder business to stay alive in, because when you and I broke into the business Hollywood was making way more movies.

Now they make fewer, which means they develop fewer, which means they hire fewer of us, which means there are fewer of us.

When people ask, “How long can I expect to work in this business?” obviously the answer varies wildly according to your talent and your abilities to make your weight. But let’s just talk about averages. Not long. In truth, it is a bit like professional sports where a lot of people get their break, they play for a season or two seasons, and then they hurt themselves, or they just don’t quite click. And they are gone.

And there are guys who work five years and then are gone. There are people who work ten years and then are gone. To have a career that goes more than 20 years, you are in rarified air. You are in limited territory. There are not many of us. Look, I am on year 16 right now. You probably are similar to that I would imagine.

**John:** Yeah.

**Craig:** I would like to think I can get another four years. I would like to think I can hit that big 20 year mark. I think I will, but to be one of those guys that can put together… — Look, when I look at some of the names of people that say to me, “I’m having trouble finding work,” my heart sinks. It is a very difficult thing to make an actual, real career out of this.

And, please, for those of you who do have that wonderful day where you get that break, do not confuse that with a career. That is the beginning. In fact, the hardest work is yet to come. So, be prepared for that. If you are, you have got a shot.

**John:** Yeah. What I will say is you and I are approaching this from a pure screenwriting point of view, where we are writing screenplays that will become movies. Some A-list writers and sort of near A-list writers transition to TV and do other amazing things because TV is better in many ways. And sometimes people extend their career at the edges of what is a traditional screenwriting career.

**Craig:** Right.

**John:** So there are other things other than just falling back and teaching at a university, but it is important to be realistic about how much time a person ends up having a screenwriting career.

**Craig:** Yeah. And you know, there is also something very cruel about the way the business functions. There is this famous experiment that was done many years ago with rats where they would put them in a cage, and then they would flash a green light, and then shock the bottom of the cage. And they had another cage where they would just shock them occasionally, but there was no green light. And the rats in the green light cage lived twice as long because they were able to prepare for the pain.

But random jolts of pain are disturbing. Similarly, random jolts of success are disturbing. And, you know, Pavlov found out that if you didn’t always reward the dog when you rang the bell, but occasionally, it was even a stronger effect, because there was this anxiety of maybe this time. That’s why casinos function so well. And screenwriting can do that to people. I have seen people just go for years and years, and then there is this burst of activity, and like, finally, it is going to be okay.

And they ride that for another three or four very difficult, difficult years. And then it happens again, or it doesn’t, and I have to say at some point, you turn around and go, “Wait a second, did I just waste 15 years of my life in panic?” And it is just a very hard career.

I have to say, of all the arguments that the Writers Guild make to the studios about why we should be paid more, or how we should be paid, or two-step deals and all the rest of it, I do feel one of the strongest arguments we make is that the studios have effectively made this, it’s like it’s not a career anymore. They have ruined it.

I don’t know why anybody would get into this as a 21-year-old expecting to be able to support a family and make it to retirement as a screenwriter. It is just brutal.

**John:** Well that was a very depressing look at six figure advice, which really wasn’t meant to be so depressing. If you are making six figures, that’s good. It’s a good thing. It’s a good thing. Congratulations, you are making six figures.

**Craig:** Yeah.

**John:** And we realize that this is sort of esoteric advice because most people aren’t going to have a screenwriting career that gets them to that point and they won’t need to incorporate, but we always get those kinds of questions. And when we talk to real screenwriters who are working, some of the first questions they ask is, “Hey, do I need to incorporate? What should I do? Do I need insurance?” And so we thought we would talk about that.

On a future date, we will talk about seven figure advice, because then everything changes, because then you are looking at, well, like what kind of wood is best for the yacht that you are building.

**Craig:** Right. Exactly. And where can I legally kill and eat a panda.

**John:** Yes. And then there is eight figure advice, which is really esoteric because I don’t think there is any screenwriter who makes eight figures.

**Craig:** Not in one year. No.

**John:** No.

**Craig:** No. Not in one year.

**John:** I think a couple of the super producers make eight figures in a year, but there is no screenwriter. And precious few directors make eight figures a year.

**Craig:** Yeah. I know one who definitely had a pretty good year.

**John:** I don’t want to… — One who you are working with who had a very good, lucky year.

**Craig:** Yeah. I don’t know how lucky, but definitely it was… — He earned it, but man, that was a big year.

Yeah. I have to say, in summary, that if you are making six figures, I am thrilled for you and frankly any depression I have is related to the fact that it has become harder to become one of those people. And I want screenwriting to be a successful, viable career where people can actually work at it for the big bulk of their productive years. And right now, the squeeze is very difficult. And I do think that the studios are going to have to confront the fact that they are depleting their farm system in a dangerous way. And screenwriters need to be nurtured just like anything else.

**John:** Yup. We are the research and development for the film industry. And if they cut the R&D, then innovation will suffer, and things will get very, very bad.

**Craig:** Very, very bad.

**John:** I was just talking with a mutual friend of ours who is now segueing out of screenwriting and into digital development, so doing stuff for the iPhone and for other applications. And so she was meeting with VC people, and the VC people would say, “Oh, we like your idea but we only write like $10 million checks. We don’t really do the $3.5 million checks.”

And I was torn between my desire to congratulate her, I guess, and find those people and either throttle them or take their wallets.

**Craig:** Yeah.

**John:** Because I feel what we are mostly wrestling with here is just a lack of money. And if we could open up some purse strings here, I think there would be a happier time for a lot of us.

**Craig:** Yeah. I don’t see that happening any time in the near future.

**John:** Yeah. We need another Village Roadshow or some other outside entity, to come in with a lot of money, and start throwing money around. And they will make stupid choices, but their stupid choices benefit us greatly.

**Craig:** I think even more than that, what would be useful is a new market. You know, whatever, if they could figure out downloads in a way that was really awesome or, I don’t know. It is getting tough out there man.

**John:** Yeah. But you know what? It won’t be our generation that figures it out. It will be the next generation.

**Craig:** We will be old and doddering in our chairs watching the world burn around us, giggling into our glasses of panda blood.

**John:** Do you know who is going to benefit from it?

**Craig:** No, who?

**John:** The kids at the Cinema School in the Bronx.

**Craig:** Those kids.

**John:** Those kids will figure it all out.

**Craig:** Those kids are going to graduate and go, “Wait, what?! I get what?! I’m going to earn…oh God.”

**John:** Those fools.

**Craig:** “I should have gone to pre-med.”

**John:** Yeah.

Craig, thank you for another podcast.

**Craig:** Thank you, John. It was a good one.

**John:** I will talk to you soon.

**Craig:** Bye.

**John:** Bye.

The original post for this episode can be found [here](http://johnaugust.com/2011/thirteen-questions-about-one-thing).

**John August:** Hello and welcome. My name is John August.

**Craig Mazin:** My name is Craig Mazin.

**John:** And you are listening to Scriptnotes episode 16, yet another podcast about screenwriting and things that are interesting to screenwriters.

I should correct or amend, a friend of mine was listening to the podcast. He says, “I’m not a screenwriter and I find the podcast interesting. So you need to stop saying that header thing.”

I felt that just because we might be interesting to screenwriters doesn’t mean it’s exclusively intended for screenwriters.

**Craig:** No!

**John:** You’re welcome to listen to this if you’re a nurse, for example.

**Craig:** Yeah. I mean, dresses are made for women but men can wear dresses.

**John:** Absolutely. It’s completely your choice.

**Craig:** That’s right.

**John:** This is in the digital world. Listen to whatever you want to listen to. That’s really the goal.

**Craig:** Yeah. Why should we stop saying that it’s for screenwriters because you like it and you’re not one? Look at this. I’m doing everything I can to lose listeners.

**John:** Yeah, you really are.

**Craig:** Yeah, I’m the worst.

**John:** Yeah. I should explain to you listeners that often Craig will sort of ramble at the start of these podcasts and we’ll have to snip thing out, because we’ll always end up talking about terrible things about tragedies that happened during the second World War to certain groups of people. It just never really plays well in the podcast. So I’m always flagging to Stuart, “Maybe you could lose that little part of what Craig said at the header here.”

[laughter]

**Craig:** I won’t do it today.

**John:** Good. A little bit of housekeeping before we get started. This is Episode 16 of Scriptnotes and I keep getting confused about what number we’re on because you and I did some episodes that got thrown out because they were terrible.

On iTunes, only the last 10 episodes are listed. So someone who is coming to the show for the first time, they think, “Oh, they have 10 episodes recorded.” No. In fact we have more episodes recorded and you can find them all at johnaugust.com/podcasts to see everything that we’ve done and listen to everything that we’ve done.

**Craig:** Yeah. Dig deep into the archives.

**John:** Indeed. And if you’re digging deep into the archives, you’ll also see transcripts for all of our previous episodes. And not every podcast is going to give you a complete transcript of everything that’s said.

**Craig:** But ours does.

**John:** We do. Craig, you meticulously check the transcript to make sure it’s exactly what you said, correct?

**Craig:** I pour through it. Well, first of all, I do the transcripts myself. John pays me $33. I do the transcripts. It takes me about six hours.

**John:** Yeah.

**Craig:** Then I recheck it and then we put it up. I try and put back in the stuff about the Holocaust that he takes out.

[laughter]

Try and edit that out, Stuart.

**John:** Ugh. And here’s the best part about our conversation right now is a day from now somebody, I presume in India, is going to be transcribing this conversation about the podcast being transcribed.

**Craig:** I mean no offense.

**John:** No. But I think it’s kind of great. I think it’s just wonderful that there’s a cycle of digital creation in the world that hopefully is making this profitable for someone to transcribe.

**Craig:** Somebody somewhere should be making money off of this because I’m not.

**John:** No, I’m not either.

**Craig:** Yeah.

**John:** A podcast — people are interested in like, “Oh, I want to do my own podcast.” A podcast is not expensive in any real way. I mean, Craig and I had to buy our microphones and that was kind of it in terms of actual hard costs.

**Craig:** Yeah. Although you made me buy this $16,000 microphone. I don’t know why. John insisted that we both get this very rare Neumann microphone that was used initially at the old RCA. I think Toscanini used it for recordings.

**John:** Yeah. If you want a visual for it, it has the springs all over it and it would be very good if you’re a lone singer at a USO Show and you’re on a spotlight. This is the kind of thing you might do. Or if you were George Clooney and you were making Good Night, and Good Luck. It’s the kind of microphone that the woman would sing into in Good Night, and Good Luck.

**Craig:** Yeah. We always go vintage. We don’t like…

**John:** The other thing the microphone is fantastic for is recording all the bus noise outside Craig’s window.

**Craig:** Well, it was designed originally for bus noise.

**John:** Yeah.

**Craig:** Interesting fact.

**John:** It does that really well.

**Craig:** By Germans.

**John:** By Germans.

**Craig:** Right before that thing they didn’t do.

[laughter]

You should have never said anything.

**John:** Yeah. Craig, I think you wanted to bring up our first sponsor. Our podcast has its very first sponsor this week.

**Craig:** Yes, yes!

**John:** I’m so excited to be able to introduce this, a sponsor who will pay us absolutely no money.

**Craig:** That’s right. He’s not really a sponsor because we have no costs, but our mutual friend, Derek Haas, a terrific screenwriter who works with Michael Brandt. They’ve written movies like 3:10 to Yuma and Wanted. Derek is a novelist as well. He is writing a series of books based on a hit-man character and his latest book, Dark Men, is out. You can get it on Amazon. Dark Men by Derek Haas, H-A-A-S.

If you’re saying, “That’s not right. It should be Derek Haas,” correct, but he insists on pronouncing his last name Haas. I have to say, look, you change your name because people didn’t pronounce it correctly. Haas seems like the worst choice of pronunciation for that name. You just imagine what a fourth grader does with that. But he insists.

**John:** Derek’s also from Texas so I think that explains a lot.

**Craig:** Oh, you think it’s easier in Texas to walk around with the name Haas?

**John:** Well, I think you also might just make bad choices if you’re from Texas.

**Craig:** Oh, I see. Well, listen, Texas is a big place now. Our friends in Austin, for instance —

**John:** Our friends in Austin are fantastic. There are many awesome things in Texas. I just feel like if you’re going to be in Texas, maybe Haas really is a better way to pronounce your name because it might be the more natural way people are going to say your name anyway.

**Craig:** It matches the drawl.

**John:** It matches a little bit of a drawl.

**Craig:** Well, Derek, I hope you got your money’s worth. I hope you got your zero dollars worth from that bit of promotion, most of which was spent on how ridiculous your name is.

**John:** Yes. We will include a link to Derek’s book on Amazon in the show notes. Every episode of our podcast has a list of links. You can go to the actual post on the site johnaugust.com and find this post, and you’ll find a link to it. You’ll also find a link to Popcorn Fiction, which is the short story collection that Derek initially created and I think, introduced to maintain that editorial control over…

I wrote a short story for that. You wrote a short story for that.

**Craig:** That’s right.

**John:** Many screenwriters have written short stories for that. That’s another Derek Haas creation.

**Craig:** Yeah.

**John:** Derek, by the way, somehow is able to write all the movies for Brandt and Haas and write fiction on top of that. That seems kind of crazy and impossible.

**Craig:** Well, Derek has this thing, or maybe it’s that he doesn’t have a thing that I have, which is a neurosis. He is the least neurotic writer I have ever met in my life. He’s happy. He sits down to write and he writes. He doesn’t sit there and torture himself and then suddenly novels are done and scripts are done. It’s remarkable.

One of the happiest people I know. I don’t get it.

**John:** Yes. Some part of his brain got burned out early on. I think they reached up a wire through his nose and shocked the little part of self doubt. And God bless him. We have Derek Haas to —

**Craig:** By the way, if they offered that as an elective surgery, I would absolutely do it.

[laughter]

**John:** You would completely take it.

**Craig:** I feel like my brain is mostly that thing.

**John:** Yeah.

**Craig:** Yeah. Self recrimination.

[crosstalk]

**John:** The self doubt and…

**Craig:** Yeah.

**John:** Yeah.

**Craig:** It’s great.

**John:** Our last podcast was talking about residuals. We got some good questions and we already provided some good answers I think on residuals.

**Craig:** Yeah.

**John:** But we got really just an amazing essay, which I’m going to call now Thirteen Questions by Daniel Barkeley, which feels like a short film — or actually a long film — that you’d find at the Sundance Film Festival, but is in fact a series of questions by Daniel Barkeley, all of which were worth answering. So I thought we would just quickly power through Thirteen Questions by Daniel Barkeley.

**Craig:** Do it.

**John:** Do you need a breath? Do you need a drink of water?

**Craig:** No. Although I remember that some of them were about TV and I’m a little fuzzy on that so I’ll say “Pass” for the ones I don’t immediately know the answer to.

**John:** I looked up answers kind of for the TV ones.

**Craig:** Okay.

**John:** But we’re going to do our best. That’s what we’re going to do.

**Craig:** Good.

**John:** We can’t promise more than our best.

**Craig:** No.

**John:** “In television, how is the residual allocated between the Created By, Storied By, and Teleplay credits?”

**Craig:** Can I guess?

**John:** Guess.

**Craig:** I don’t think Created By gets any residuals. I think Created By gets some sort of pass of payment that’s negotiated individually by the writer and that all of the residuals are attached to the story and the Teleplay By.

**John:** That is correct.

**Craig:** Woo! Ding-ding-ding!

**John:** Ding-ding-ding! And the split is the same as features, which is the next thing we’re going to talk about. “So how is the percentage credit on a film or TV episode determined?”

**Craig:** 25 percent of residuals are attached to Story or Screen Story By and 75 percent of residuals are attached to Screenplay or Teleplay By.

**John:** What a perfectly concise answer, and actually correct.

**Craig:** Thank you. Woo!

**John:** Question three. “The Hangover Part II used characters created by Jon Lucas and Scott Moore. Did Mr. Lucas and Mr. Moore” — I love the Mr.’s in there.

**Craig:** Misters, yes.

**John:** “…receive residuals for Hangover II?”

**Craig:** They do not. The Characters Created By is part of a separated right. If you are the credited story writer, so if you receive Story credit or Written By credit for an original screenplay that is produced, on all sequels you will receive contractually a Characters Created By credit. That credit comes with no financial attachment whatsoever.

**John:** Yeah.

“Who pays residuals when Go airs on HBO?” — And Go has been airing on HBO quite a lot, so hooray. — “Is it HBO that pays the WGA or is it the producer of the film or the original distributor of the film?”

The answer is it is the distributor of the film. So there is one entity who is responsible for paying residuals, and that is the entity that has the, in this case, home video rights to the movie Go. So in this case it’s Sony or Columbia TriStar or some giant shell corporation.

**Craig:** Is that right?

**John:** You don’t think that’s right?

**Craig:** Well, I’m just wondering because I always thought that the people who paid were the people that employed the writer under a WGA contract. If, for instance, one company employs the writer and produces the movie, and then another company simply distributes it, I think the employer pays the residuals.

**John:** You could be correct. In the case of Columbia TriStar, they are on entity so therefore that could be a little bit murky. I’m also, though, going based on The Nines, which is a movie that we independently produced and then we sold to Sony Newmarket. Sony and Newmarket, which is really just Sony, is responsible for handling all the residuals on that movie. And me and the production company are not responsible for the residuals.

**Craig:** That’s right. Because what happens is, yeah. There’s something called an assumption agreement and it gets really complicated. But once they buy it and they purchase it, they have to do it under a WGA deal. For instance, on The Nines, they didn’t just buy the movie. They also bought the screenplay.

Once they buy the screenplay, then they are the owner and they are the WGA employer. I believe it’s the WGA employing entity. So either way, it’s never the “producer.” It’s always the company that’s actually making the WGA deal, I believe.

**John:** Yeah. And it’s not HBO. It’s not the people who buy the movie.

**Craig:** No.

**John:** It’s the people who are showing the movie on a channel.

**Craig:** Certainly not, no.

**John:** It’s not, yeah.

**Craig:** It would be the people that hired the writer and produced the movie, usually one in the same.

**John:** Yeah.

Question number five. “I often heard it said that writers/producers ‘have a piece of the show.’ How is this distinct from residual payments?”

**Craig:** Well, a piece of the show is some sort of profit participation. You are a part owner of the show so when receipts come in that are above and beyond costs, and there are all sorts of ways of defining that, people who have a piece of the show get paid a portion of the money the show generates.

Residuals have nothing to do with whether the show is in profit or not. They are simply attached to exhibitions or repeat showings of something. Having a piece of the show is something that you negotiate individually. Residuals are something that are already negotiated as part and parcel of the union contract.

**John:** Yeah. If there’s nothing else to take from our repeated discussions on residuals, it’s that you get residuals no matter how successful the film is.

**Craig:** Right.

**John:** Whether it makes $5 at the box office or $50 million at the box office, you will get residuals. You’re more likely to get more residuals from a very successful run in post-theatrical life if your movies are incredibly successful. But the movie does not have to be profitable for you to see residuals.

**Craig:** But there’s probably some examples where I can imagine a movie that did fairly well in theaters and maybe just wasn’t a big seller on DVD. The writers of that movie could make less in residuals than, say, Mike Judge on Office Space, which made nothing in theaters and was massive on DVD.

**John:** Yeah. You know what? That actually was question number six. You kind of got ahead of us.

**Craig:** Hm.

**John:** His question was, “In film, it seems that the example John gave means that it is not uncommon to earn more in residuals than upfront payments. Is this a common experience in television as well?” So we were talking about film. In TV would you make more in residuals than you made on the first writing of a show? I don’t know.

**Craig:** Not anymore. I think those days are gone. It used to be that that could be the case, back in the days of the healthy network rerun. I think those days are gone. I could be wrong. Maybe we’ll hear from somebody that writes in TV frequently.

In movies, that would be the exception to the rule, generally speaking. Well, no. I take it back. In movies, if it’s a big hit I could definitely see you making more in residuals than in payments.

**John:** Definitely.

**Craig:** Yeah.

**John:** “Would you please discuss the differences between foreign levies and residuals?”

**Craig:** Yeah. Okay. So a big topic, and I’ll boil it down very quickly. So we have work for hire here. We don’t own the copyright to our work. The rest of the world doesn’t have work for hire. Not only that, the rest of the world thinks work for hire is a big scam and that, in fact, an individual must be the copyright or the author in law and in fact of any particular audiovisual work.

So in other countries, one of the things they do to reward authors for reuse of things it they charge a tax or a levy on blank media — cassettes, rewritable CDs, even hard drives, things like that — anything that people might be using to make copies of television shows or movies. That tax money in part is then parceled back out to the authors.

The problem is who is the author of Go? Is it John August or is it Sony? In the United States it’s Sony. In France it’s John August. So when they started collecting this money and we started looking for it, the MPAA here in the United States said, “Uh, we’re the authors so we’ll take that money.”

And the writers and directors who considered themselves both in authorship position on these movies, and foreign countries consider writers and directors both authors of movies, said, “No, no, no. That’s our money.” And essentially there was this massive threat of a lawsuit that would have ended up in The Hague for God knows how long.

So a compromise was struck. Over time I think we have moved to a place now where writers and directors receive half of the share of this money and the companies receive the other half.

In time, I think given the trend, eventually writers and directors will receive all of it, I think over time. In the meantime what it means is that every few months you might get a check. It’s not a lot of money but it’s some money, hundreds, maybe a couple thousand for more popular fare. That is sort of an aggregate amount of money that’s been collected from all of these foreign tax collection agencies.

**John:** Yeah. And the math behind it is crazy.

**Craig:** Insane.

**John:** You couldn’t possibly imagine it, because it’s not really tracking the success of one of your movies. It’s the success of your movies and the tax collections across a whole range of European countries. It is nuts.

**Craig:** It is nuts, and it also gets stranger for television, because a lot of times what they’ll do is they’ll re-chop these things up. I mean, Germany may buy a package of five shows and chop them up and make one weird long show out of it. Well, who gets the…? It’s crazy.

The bookkeeping is crazy. And frankly, the Writers Guild doesn’t do a particularly good job of getting this money to the people quickly. There’s a lot of controversy about whether the Writers Guild should be collecting this money at all because it doesn’t just collect money for Writers Guild members.

These countries collect those foreign levies on behalf of any author. That doesn’t mean just Writers Guild authors. It means non-Writers Guild authors. It also means, frankly, people who write and direct porn. Yes, porn generates a ton of foreign levies.

So the Writers Guild has become a collection agency on behalf of both Writers Guild members and non-Writers Guild members, which has led to a lawsuit, I think more than one lawsuit, and those are still wending their way through the system.

**John:** Yes. Thank you.

**Craig:** You’re welcome.

**John:** Question number eight. “Could you please discuss the new media residual that was gained in the last strike? Has it been a good deal for writers overall?”

**Craig:** Well, I mean, the feature side is easy. Is it a good deal? It’s better than what we had. We already had 1.2 percent of 100 percent for Internet rentals of movies. We got that in 2001.

In this last go-around, what they wanted to stick us with was 20 percent of 1.5 percent for Internet sales of movies. What we got was the equivalent of 40 percent of 1.5 percent for sales of movies. So we doubled the DVD rate for Internet sales.

Is that good for writers? Yeah. It’s twice as good as… Well, let’s put it this way. It’s twice as good as a terrible rate. So I don’t know what you’d call it, not great but not the worst thing ever?

**John:** Yeah.

**Craig:** But the streaming and the media, that stuff gets crazy.

**John:** It does get crazy. And you also have to consider if you’re doubling that rate for DVDs, the price points are also potentially a lot lower, too. So it may be less money actually coming into your pocket.

**Craig:** Yeah. There’s a bunch of factors. The price point may be a lower. We don’t know, frankly, if Internet sales will ever even come close to what DVD sales used to be.

My big hope is that, frankly, rentals are the things that capture the wave of the future, because we get a bigger piece of that. Even though that’s a smaller number, if rentals happen consistently and frequently, that could be a big upside for us.

**John:** Yeah. I want rentals. Just as a consumer, I want rentals. I want that media should be available to me when I want to see it and I don’t have to worry about holding onto it or storing it or doing anything.

**Craig:** Yeah.

**John:** I just want to be able to see the show I want to watch when I want to watch it.

**Craig:** Yeah. Now for television, it gets pretty complicated and there’s actually a pretty good rate for television streaming and reuse over the Internet. However, some of it is then qualified by the fact that they do this thing called imputed value, where essentially we’re talking about $2,800 for a year of streaming new programs over the Internet. It gets complicated.

If you go to the Writers Guild website, I think they do a pretty decent breakdown of how that works.

**John:** Cool.

“Have you two ever received a check from Netflix or Hulu’s reuse of your work? Who is paying the residuals in this case to WGA?”

That’s exactly like HBO.

**Craig:** Yeah, same deal. We wouldn’t get a check from Netflix or Hulu. Netflix and Hulu pay money… They don’t deal with residuals at all. They pay fees to the studios for the right to purchase those DVDs that they send out in the red envelopes or the right to host them and resell them on their servers.

The companies get this gross amount of money. It’s attached to a movie and they give us a piece.

**John:** Yep. And now currently — I actually don’t know the answer to this question — let’s say Netflix buys a block of Sony movies and Go is one of those movies. Are they splitting the money equally between the movies that Sony is selling at that block or are they apportioning for each play of Go on Netflix’s servers?

**Craig:** Our deal is structured so that every time your movie is rented you get a piece of the gross that that movie generates. However, I don’t believe the companies are restricted from doing the kind of deal you’re talking about.

If they did the kind of deal you’re talking about, somehow they would have to figure out, in some sort of lump sum arrangement, how to apportion that money. Because obviously Go deserves a certain amount of money and Moneyball deserves a certain amount and an Adam Sandler movie deserves a certain amount, and they can’t just make it equal across the board. That’s where it gets crazy. I don’t really know.

And frankly, that’s why the next few negotiations are going to be so difficult because the truth is no one really knows how the stuff is going to work. We have to smash a very mature contract to pieces and make a new one based on the way the market’s changing.

**John:** Exactly.

“What makes you think that new technology…” It’s always a bad sign when a question starts “What makes you think that?”

[laughter]

“What makes you think that new technology won’t enable the studios to escalate their underpayment shenanigans?” That’s a loaded question. “If a television program or film is re-aired on cable, it’s pretty easy for the guild or writer to determine how many times it was re-aired and what his compensation should be. With new media, there is no publicly accessible way to see how many times an episode or film has been downloaded or streamed.”

Some of that’s a good point, some of that I would take exception to.

Yes, one of the nice things about traditional broadcast and cable is that you can see, “Oh, that show is on HBO right now so I will get a payment for that.” It’s harder when it’s split across a whole bunch of different platforms. You don’t know how many times it’s actually being played. That I totally get.

But I don’t know that you’re necessarily going to know what the numbers were behind the cable deal or TV deal at the start.

**Craig:** Exactly.

**John:** You don’t know how much they paid Sony for the rights to show that show on cable.

**Craig:** That’s exactly right. The truth is, the part of the question that’s correct is the part that presumes that there are shenanigans. Absolutely there are shenanigans. They occur on a daily basis. The part that’s incorrect is presuming that it’s any more difficult to run those shenanigans with an old model than it is with the new.

What the guild has built into its contract along with the DGA and SAG AFTRA is the right to do something called a tri-guild audit, where the three guilds essentially force an audit of all of the signatory companies to check their books and to go through the accounting and make sure that we’re getting paid properly.

This is one of the great failings of the Writers Guild over the last 15 years, I would say. I don’t know the last time we actually imposed the tri-guild audit. That is part and parcel with the strange political culture at the guild that is fetish-ized appearance over results. We will go to strike to get a better rate on a deal that we aren’t checking.

I would much rather us spend the money to do these audits every year, and collect money that we are probably missing out on every year, as opposed to shutting the town down to try and improve our rate by some minuscule amount.

As I like to say, you can get 100 percent of nothing, it’s still nothing.

**John:** So, a true life example, here. For The Nines, we had to endure a motion picture television fund audit. And so, here’s how they audit an individual film: they came, we had to pull up all our boxes out of storage, and a guy sat at a table for two days solid with a laptop and went through every single file, checking everyone’s payroll, their time cards, and everything else like that. And at the end, gave us a bill for, like, $7,000 for underpayment on something.

Now, it was a pain in the butt for me. And it was kind of a pain in the butt for them. And we were able to negotiate it down, because there were disagreements about how some stuff was done, but they were enforcing their contract. They were making sure they were collecting every penny that they were owed, and that’s their job. And so, I would love to see a more aggressive tactic taken.

**Craig:** Yeah, and as you can imagine, when you’re dealing with three unions, each of which, maybe, have, I mean, for instance, the Writers Guild, I think it’s yearly income from dues and so forth, is somewhere in the 20 millions, you know, maybe 28 million dollars, let’s say.

28 million dollars isn’t an actual amount of money for, say, Fox. Does not exist, it doesn’t even compute. So, we’re talking about very small companies going into very large companies, and obviously, they’re going to resist these audits and do whatever they can. And, frankly, I think it should be job number one. I think we should be doing these audits, literally, it should be the most important thing we do. But, I’m not in charge.

**John:** No.

Question 11. “Are you aware of web only television series, such as Jane Espenson’s Husbands, or Lisa Kudrow’s Web Therapy?”

Why yes, I have. And I will put links to both of those on the show notes.

“For now, these seem to be passion side projects. But is it possible one day we will live in a cable-less world where there are thousands of shows online, all produced on a shoestring budget? Could it be, one day, that everyone will have their own show, but no one’s making much money?”

Again, that is not really a question we can answer, it’s really more a statement with a question at the end, not the answer.

**Craig:** Well, I mean, if you’re asking me to prognosticate, I would say, no. And the reason why is, people who are very good at what they do want to be recognized for it, because they will be recognized for it. So, if one person that’s making this terrific show that hundreds of thousands of people tune into because it’s really, really cool, somebody else is going to come to them and say, “You know, you could make a ton of money on ads and stuff.” And suddenly, there’s budget and there’s ads and the cycle begins again.

We always reward; attention is a resource. We don’t just spread resources out willy-nilly. The marketplace will draw resources to the stuff that deserves it, generally speaking. So, no, I don’t think we’re going to live in a time when everything gets equal attention, that just goes against human nature.

**John:** Okay.

Question 12. “How do you see film marketing evolving in the new media era during the home video window? In the old days, a writer’s film would be sold to HBO, HBO has an interest in promoting it, so it runs a few ads during its other programs. The fact that it’s playing gets put into TV Guides, newspapers, and to cable set top boxes across the country.”

So, the question’s really asking, with new media, how do we maintain the profile of big movies across the different platforms, I think?

**Craig:** Well, that’s a little scary. And I mean, movies, the studios’ marketing divisions rely heavily on television. And if television becomes fragmented to the point where no one’s seeing anything, then they obviously lose a massive tool.

Now, I will say, and I like using the word massive tool, when I talk about marketing.

**John:** I knew you did that, yeah. I can see the little glee in your voice.

**Craig:** Yes, yes, those massive tools. And I did start in marketing, so.

But look, let’s face it: it’s already happened. So, instead of companies spending 100 percent of their budget on television spots on three networks, they spend 100 percent of their budget on television spots across 80 networks. And, theoretically, the cumulative eyeball factor adds up. But, of course, you see movie ads everywhere on the Internet, all over the web. And then, there’s outdoor. And outdoor, I actually think, is going to become more important over time, because you can’t escape outdoor.

**John:** Yeah. Motion pictures are one of those things that you need to have everybody there your opening week. Your opening week is so crucial, that we’re going to continue to spend a ton of money on network TV, because that’s the only way you can sort of make sure to reach everybody all at once. And, to the degree that stuff gets fragmented, you’ll just have to buy up all the little different places that they could be watching something, to do it.

This is, I think, in marketing, or in ad buying, called a “roadblock,” where you’re buying a commercial on every channel at the same time so that at 8 p.m. on Monday, you’re buying out all the channels, so that you make sure that everyone is seeing your ad.

And you can do the same thing on the Internet. It’s called the Internet roadblock, where you’re buying massive ads on the top 20 sites, so that you make sure that everyone has been exposed to your thing on the same day.

And you’ll see some of that sometimes with other product launches. Like when Apple has a brand new thing. You’ll see a roadblock where they basically, they’re buying out everything on the New York Times, or they’re buying out a major ad on New York Times and all the other newspaper sites, same day.

**Craig:** I will also mention this other thing that is going to get worse and worse. The one advantage that studios have over car companies or Apple is that they own most of the delivery systems. So, as obnoxious as it is, these local news stories that are really just ads for the stuff that the parent company of the local news station is producing, it’s going to get worse. No question.

You’re going to see characters on TV shows talking about upcoming movies. You’re going to see, it’s going to infect everything, because it is becoming harder and harder to reach a unified audience.

**John:** Yeah.

Question 13, finally. “Craig, my web browser is full of Hangover two DVD ads for the December 6th release.” —

**Craig:** — See? —

**John:** — “Presumably, a big residual day is coming up for you. How soon after a film’s release on DVD do you get your first check?”

**Craig:** Well, there’s a formula, I believe it’s something like the company has — I think — six months following the beginning of the first quarter in which they receive grosses. There’s some very complicated thing. But the short answer to your question, my guess is something like a half a year later.

**John:** Yeah. So, my prediction will be, you will see a spike, and that will be like, “Oh, that will be a big check.” It’ll be actually the second check you get is going to be the big one. Because you’ll see, like, “Oh, there’s a bunch of things sold,” and then the next one is bigger. Based on other, bigger movies that I’ve sold.

Like the first check for Charlie and the Chocolate Factory was nice and big. Like, “Oh, wow, this should be great.” And the second one was, like, “Oh, twice as big. It should keep growing.” And then it goes and it crashes and it does the familiar sort of long tail thing.

**Craig:** Yeah, I’m kind of, I’m very curious to see what happens. That’s actually, the Hangover II DVD is an interesting case study, because it’s one of the first ones that’s really promoting this UltraViolet concept, where the studios are doing their own digital locker. And it’s also an interesting test case just to see, just to check the DVD market itself, because the first Hangover was extraordinarily successful on DVD and that was two years ago.

Granted, it’s a different movie, it’s a sequel, it may not even, apples to apples, it may have not done as well. But I’m kind of curious to see what the effect of the allegedly eroding DVD market is on the sales of this one.

**John:** Yeah, UltraViolet is stupid. I just don’t think it’s going to work. I think it’s a bad name. I just don’t get it at all.

**Craig:** It’s, you know what? I used to think that I understood this good name, bad name thing. But, man, I say Blu-ray now, and I thought that was the dumbest name I’d ever heard of in my life. But now, when I say it, it’s like a thing.

**John:** Yeah. I mean, I didn’t like the name iPad, but now I can’t imagine them calling it anything else.

**Craig:** Well, everybody was “iPad, yeah, it’s tamponesque.” And yet, here we are, just like sheep.

**John:** Beyond the name, I just don’t think I want to trust these other new people to hold on to my media in any meaningful way. I mean, Apple, I get, I mean, Apple has reason, I believe Apple’s going to be around five years from now. I don’t know what UltraViolet is, I don’t know who those people are. It just feels too much like HDDVD or all those other things. It’s like, I’m waiting for the winner, and I just don’t feel like that’s going to be the winner.

**Craig:** That’s the thing. Because the truth is, anybody, look, I save all my screenplays on my Dropbox account. I don’t know who the Dropbox people are, either. But, so, it’s not like, security wise, or will it still be there? It’ll always be there, it’s the studios, they own the movies anyway.

The real thing is, who the hell are — most people don’t know it’s the studios. And studios, what they’re good at making and selling isn’t this. What they’re good at making and selling are movies and TV shows. I don’t think they’ve done, as far as I could tell, a particularly good job of convincing people that UltraViolet is this great new idea. It’s great for us as writers, in terms of residuals, if it takes off. But this is all, this is a war between the studios and Apple.

**John:** Yeah. It basically is.

**Craig:** Yeah.

**John:** Yeah. So, Craig, as we’re doing follow up, and some wrap up, too, we had a previous conversation about Follies, the great Steven Sondheim musical. So, two bits of exciting news that I think you’re going to be excited about. First off, the soundtrack to the Broadway production of Follies is now available on iTunes, and it’s great. It’s great. It’s actually really, really great.

Second off, and probably more exciting to you, Follies is coming to the Ahmanson in Los Angeles.

**Craig:** Well, it looks like we should go.

**John:** We should totally go.

**Craig:** I’m going to make you go again.

**John:** We actually have season tickets to it, because this is actually going to be replacing Funny Girl, because Funny Girl was supposed to be coming to Broadway.

**Craig:** I can’t go see Funny Girl with you. It’s just too gay. Sorry.

**John:** It is, it’s too gay.

**Craig:** Too gay.

**John:** So, Funny Girl got nixed. It got, it fell apart.

**Craig:** Why, do you mean, fell apart? Just the, no one wanted it, or?

**John:** No, it’s actually, this was interesting, because it was while we were doing our second Big Fish reading, for our producers and investors and theater owners and stuff. It was that same week that we were in rehearsals, Funny Girl fell apart.

So, it was Lauren Ambrose and Bob Cannavale to star in the show, and it was originally, it was going to do its out of town at the Ahmanson, before traveling to New York, to Broadway, to open. And kind of at the last minute, it evaporated and fell apart. And so, the Ahmanson was left with this big hole, for like, “Oh my god, what are they going to do for their production now?” And they’re going to take Follies. It’s great.

**Craig:** Nice.

**John:** Everyone loves Follies. Yeah.

**Craig:** All right, I’m there.

**John:** Cool. And I think we’ll leave it at this.

**Craig:** Yeah.

**John:** Craig, thank you for a lot of good follow up today.

**Craig:** Thank you, John, and thank the great questions.

**John:** All right, absolutely. That was Daniel Barkeley, who did, really, the heavy lifting on today’s show.

**Craig:** Thanks, Daniel.