When I optioned and sold my first screenplay, Dish Dogs, I had a friend who worked in development who gave me a great piece of advice about how to negotiate my writing fee. He said, “You get what you can take.” This is sound advice for anyone who’s ever negotiated anything. As with most things in the entertainment industry nothing is written in stone so your writer’s fee may well be determined by your negotiation skills.
Keep in mind the psychology of the producer or director who wants to option your script. When a producer is reading scripts they have too many to read and most of them are terrible so the writer has to work hard to even get the producer to read their script. Once a producer has read your script and likes it they’ve probably read 100 scripts or more and they don’t want to have to go back to the drawing board and look for another good script. So for a brief moment you, the writer, have a good deal of power. Once you sign the contract you lose pretty much all power again so make the most of it while you have it.
There are some general guidelines that you should keep in mind when you’re negotiating. As a rule the screenwriter will get between 2% and 3% of the production budget. The production budget typically does NOT include insurance costs which can be 15-20% of the total budget – this is normal so be prepared for it. When a production company says that the budget is around $2 million the writer will probably only get paid based on a budget of around $1.6 million. Using this example the writer would get between $32K (2% of the budget) and $48K (3% of the budget).
In addition nearly every producer will give a writer around 3% of the “producer’s net gross” which usually amounts to nothing but is good to have in the contract in case the film is a box office smash.
The WGA has their own standards which you can find online at their website. They change often so check out their website to get up-to-date amounts.
However, unless you’re a fairly well established writer a lot of the producers you’ll be dealing with aren’t WGA signatory producers, which means they aren’t bound by anything the WGA says. If you keep in mind the 2% to 3% of the budget you’ll usually be within the range of the WGA anyway.
If a producer wants to pay you a lot less than 2% for your script something isn’t right. Even if the budget is very low by using a percentage as your fee the lower the budget the lower your fee is so most producers like it this way.
Most producers will want to put in some sort of cap, also. Try to fight this. Most of the time you won’t be able to stop it so just try and make it as high as you can. I usually ask a producer what he thinks the least the budget will be and use that amount as the floor. For instance if he says he won’t make the movie for less than $1 million then I’ll try and put in a floor of around $20K – $30K for my fee.
This post is only meant as a general guideline. A screenplay contract is quite complicated and you should always consult with an entertainment attorney before signing any contract. This post (and any other post on this website) should not be a replacement for seeking sound legal advice from a lawyer.