Tweetstorm: Jeff Willis on Writing Compensation

In November 2014, studio executive Jeff Willis posted a tweetstorm about screenwriting compensation. Reprinted in its entirety by permission.

It’s been a while since I’ve done a Twitter rant, but today feels like a good day to resume things. This one’s about writing compensation.

Specifically, it’s about writing compensation in a movie budget and why that’s important for writers negotiating contracts.

The first thing to understand is that, from a prodco’s perspective, there are really only three types of payment categories:

1. Payments made pre-revenue. 2. Payments made during production. 3. Payments made post-revenue.

In other words, do they have to pay the money out of pocket, during production, or can they pay the money out of the proceeds of the movie?

Their goal is to pay as much as possible from the movie’s profits (or during production) rather than dipping into existing reserves to pay.

This is especially true in an era where development deals are shrinking or going away entirely, and prodcos have less available cash.

Development expenses are typically paid by a prodco in advance, then recouped out of the production budget.

For example, if I’ve paid a writer $100K for the script and $50K for a rewrite, when the production gets funded … (1/2)

… I’ll put a line-item in the budget where $150K is due back to me for my costs, since that’s an expense related to the production. (2/2)

But until the production gets funded and I get can reimbursed from production funds, I’m paying that $150K out of my own pocket.

That adds up *really* quickly if you’re a company with a large slate of projects, juggling them all until you get a greenlight on something.

It’s easier to adjust the budget down and save if you don’t get the whole amount rather than to suddenly have to come up with extra cash.

More importantly, they don’t owe it until the final credit determination comes in, which is way down the production road.

So they’re not out of pocket anything beyond your step fees by giving you a credit bonus (unless they’re funding the production themselves).

Production bonuses, on the other hand, are additional amounts paid based on reaching certain production milestones.

Upon commencement of photography is the most common, but sometimes there will be distributor setup bonuses and the like.

These bonuses are paid earlier in the process than credit bonuses, because they’re often tied to setting the project up or shooting it.

Similar to credit bonuses, these work for prodcos b/c it’s an amount built into the budget that’s only paid out once financing is in place.

So they’re not out of pocket anything beyond your step fees by giving you a production bonus (unless they’re funding the production).

Box office bonuses, though, are the best kind of bonuses for a prodco because they’re not even accounted for in the production budget.

And they can be great for a writer who is worried about receiving credit and/or is reasonably sure the project will be a commercial success.

These are paid immediately based on reaching certain box office thresholds, either a set number or as a multiple of the budget.

Example #1 (Set Number): $25K at $50M DBO (Domestic Box Office) Example #2 (Budget Multiple): $25K at DBO 1x Negative Cost.

In the first example, that means you get $25K the minute the DBO (usually defined as U.S. and Canada) reaches $50M.

In the second example, it means that you get $25K the minute the DBO receipts equals the negative cost of the picture.

In other words, if the negative cost of your movie was $16M, you get $25K once the DBO reaches $16M.

Box office bonuses work well because there’s no studio accounting involved. The movie’s either made that much or it hasn’t.

And it’s usually tied to publicly available box office numbers like from Rentrak or Variety.

The amounts and thresholds of box office bonuses are negotiated, so you can carve out some nice extra cash for yourself.

You can have lots of little bonuses, or a few big bonuses, or anything in between. Some examples:

$10K @ $50M DBO
$10K @ $60M DBO
$10K @ $70M DBO
$10K @ $80M DBO
$10K @ $90M DBO

$50K @ $75M DBO

$25K @ $50M DBO
$25K @ $75M DBO

$10K @ $50M DBO
$15K @ $75M DBO
$25K @ $90M DBO

The above examples all equal $50K in aggregate, but payable in different ways at different times.

The different permutations are endless, which allows you to craft a bonus structure that works for both you and the production company.

A word of warning, though. All of these types of compensation feed into your writing quote, so they have to be consistent with your history.

You’re not going to get a pile of box office bonuses on top of a quote-level deal just because the prodco can pay them later.

So when you’re structuring a payment schedule for your deal, be realistic. All of your compensation, fixed plus bonuses … (1/2)

… should be in the general neighborhood of what you’ve earned in the past, or what’s comparable for a writer/project of your level. (2/2)

Structuring a writing deal, especially when dealing with a stingy prodco, can require a little finesse and creativity.

But through some combination of fixed comp and bonuses, you should be able to hammer out a deal with a legit prodco … (1/2)

… that addresses their budgetary needs but doesn’t result in you just waiting around for net points that will never come. (2/2)

There is a middle ground, and you and your reps can find it with some creative deal-making.

This isn’t an all-encompassing overview of bonuses for writers, but hopefully it gives you an idea of some creative solutions … (1/2)

.. to an offer for not enough fixed comp that doesn’t just leave you waiting around for the nonexistent participation to roll in (2/2).

Good luck out there!

Jeff Willis has spent the past decade working in studio business affairs and production management. He started his career as an assistant at Beacon Pictures (BRING IT ON, AIR FORCE ONE), then moved on to work with startup production companies Our Stories Films (WHO’S YOUR CADDY, JUMPING THE BROOM) and Troika Pictures (THE CALL). Jeff is also a screenwriter; his first produced feature (THE RIGHT GIRL, written with Bob Saenz (@bobsnz)) is in post-production and due to air on Pixl TV and ABC Family in the coming months.

You may follow Jeff on Twitter: @jwillis81.

For all of the Screenwriter Tweetstorms, go here.