Business Musings: Money (Hollywood Part 4)

About the time I started planning this series, I got an email from a writer friend. The writer friend is one of those people who think they know business, but have never really bothered to learn much about it. Or maybe they’re the kind of person who reads the how-to, remembers the details, but misses the overall point. The result is the same—complete cluelessness.

I try not to answer the questions of people like that, at least not in depth, because they cause me to hit my head repeatedly against the desk before I type the second email. (Y’know, the first is full of advice, and then the second is in response to the fact that the person ignored the advice, and now wants help getting out of the mess.)

Anyway, this friend wrote that one of their friends had just received what I call a nibble from Hollywood. A nibble is a tentative contact; usually just an email that asks “Is this available?” And my friend wanted to know how much money their friend should ask for in the negotiations.

[head-desk head-desk head-desk]

I wanted to write back Have I taught you nothing? Never be the first person to discuss money in a negotiation. Never, never, never.

(Not to mention their might not even be a negotiation ever.)

Instead, I took my fingers off the keyboard, and walked away. When I had calmed down enough, I wrote back some generic advice about hiring an IP attorney to handle the entire thing.

Because I figured my advice filtered through this particular friend would be worth even less than nothing.

I have to tell you a few things here. First, this isn’t the first such email I received in 2021, and it won’t be the last. I get emails like this all the time from writer friends who believe they don’t have to learn this stuff themselves. They can just ask me. Inevitably, these friends are the ones who get into the weirdest messes—like the writer whom I told, repeatedly, to negotiate only in writing, preferably email. (And print out the emails.) I was very clear: do not give the Hollywood type they were negotiating with their phone number.

So what does the friend write to me a few weeks later? How do I get him to stop calling me?

I asked how he got the phone number, and apparently, this rocket scientist had considering texting a form of writing. What kind of person fails to realize that texting someone means that you’ve handed out your phone number?

Apparently, a writerly type. Because this writer friend was only the first writer friend to make that mistake. Several others had as well, until I specifically started saying, in emails to these people, do not text. Ever.

Because of these writer friends, I hesitated writing this series. I have to be vague anyway, much more vague than I am in person. I teach movie/TV negotiation when we do in-person workshops, but I make everyone turn off their recording devices, and take notes by hand.

My methods are unique to me, and the last thing I want is for the details to be shared far and wide. I’m sure some of the writers who’ve heard my Hollywood lecture have shared those details, but that’s not quite the same as having me share those details in a recording.

Anyway, a couple of caveats before we go further.

I use the word Hollywood to mean the U.S. movie/TV industry. It’s a good shorthand, even if it is horribly inaccurate. The movie/TV industry is vast and ever-changing, even here in the U.S. The industry is also a global industry. I currently have options with a producer in Wales, another in Spain, and yet another in (gasp!) Los Angeles. I’ve had production deals with the BBC and some Canadian companies. I’ve done major negotiations with French companies, and have had work produced here in the U.S.

Most of what happens in the industry never ever sees the light of day, even though money does change hands. Getting something filmed and then distributed and then shown to more than five people, well, that’s a lightning strike. Getting money, that’s pretty damn common.

Go figure.

The second thing I have to tell you is that this is a series. Please read the first three posts in this series before reading this one. The first post is a cautionary tale, the second explains why so many book writers are getting options these days, and the third is about writing a screenplay.

Please read them in order.

This post focuses on the money, but not in any way that will satisfy most of you. Because the least important thing about licensing your work to Hollywood is the money.

Let me phrase that a different way. Money is the last thing you should think about in licensing your work to Hollywood.

I know, I know. For most of you, money is the only reason you want to license your work to Hollywood. You know about J.K. Rowling and Stephen King and George R.R. Martin who have gotten rich off their licenses. You figure it’s easy: once your work has been optioned, then someone will make a film. Once they make a film…You’ll Be Rich!!!!!

And that’s what they want you to think.

Because money makes people stupid.

The promise of riches makes someone’s IQ drop 20 points in 30 seconds. That’s why so many scam artists tell people they can make millions if they just invest a few hundred or a few thousand.

Because money makes people stupid.

So why are you licensing your work to Hollywood? For the advertising value. And if there’s no advertising, there’s no value.

I personally know dozens—I mean dozens—of writers who have made this one very small (in their minds) mistake. They’re writers you’ve heard of. Some of them had major TV deals. Others had major movie deals. These writers made hundreds of thousands of dollars, with the promise of more. (Back-end money never comes, though. You should know that with just a casual reading of cautionary Hollywood tales.)

All of those writers have struggled in the last few years. All were traditionally published. Most can’t get a book deal anymore because of the changes in traditional publishing, and many were making their living on appearance fees and the occasional short story. Did they have long-term Hollywood money? Nope. Would they have had long-term Hollywood money if they had listened to me? Yep.

They would have made millions instead of hundreds of thousands.

And let me add this: Hundreds of thousands of dollars, invested poorly, can disappear quickly. If that money has to tide you over for the rest of your life, you need to live as if you’re earning $20,000 per year, rather than as someone who has $500,000 in the bank.

That way, the money will last 25 years, instead of three or four.

A rule of thumb: Assume your big lump sum payment is a one-time event, not a salary. If you do that, you have a chance of surviving, even if you don’t follow any other advice I give you here.

So…what is this advice?

Well, first, as I’ve said in all of the other posts, please learn copyright and licensing. Learn how to negotiate. I have books on those subjects, such as Closing The Deal On Your Terms, and How To Negotiate Anything. But if you can only afford one book on this, please get the current edition of The Copyright Handbook. Read it. Learn it. Understand it.

You’re not selling your property. You’re licensing copyright.

You need to understand that in your bones.

(If you want to see a short version of what I mean, please look at this blog post of mine from 2017, “My Day in Negotiation.”)

If you understand licensing of copyright, you’ll understand pretty quickly why only thinking about the money alone in a complex deal like a Hollywood option (let alone a contract) will end up screwing you.

As I said in last week’s post, producers and studios have sharks for lawyers. If you’re going up against those sharks with your silly little book agent or some local attorney, you’re screwing up. They’ll only see the money too, not the details of the rest of the very long and very complicated deal.

People in large industries like movies and TV understand that they’re purchasing a license. The larger the license, the more money they will make. They’ll try to license everything from the right to make a movie as well as a TV series as well as merchandising rights as well as the rights to the books themselves.

If you don’t understand how you, a small little writer person, can make money on, say, merchandising, then pick up my book Rethinking The Writing Business. That should shake you up just enough to get you to buy…The Copyright Handbook.

Here’s the bottom line, though. The more of your copyright that you retain, the more money you will make on any movie/TV deal. Not at first, but if you’re one of the lucky ones and lightning strikes.

You want your name to appear in a prominent position up front. (Above the line, as it’s called in some parts of the industry.) I’ve used this example before, but I’m going to share it again. It’s from the John Le Carré limited TV series, The Night Manager.

Every single episode shows Le Carré’s name and “based on the novel by.” That way, viewers who love the series will go to the book when the series is over.

This is absolutely my favorite author credit on any show, not because it’s the only one like this, but because it’s so dramatic. You can’t ignore it once you’ve seen it.

Here’s the thing: If this was negotiated right (and I know it was, because I’ve read about the ways that Le Carré’s sons [the Cornwell names in the credits] put the deals together), Le Carré got paid for his book and negotiated the position of that “based on the novel by” and got producer credit. That producer credit alone entitles him (or rather, his estate these days) to money every single time an episode airs.

The biggest value here, though, is the “based on the novel by” because it’s targeted advertising to a group of readers who like this kind of story, who actually like this story, and who are going to buy the book. If they like the book (and not all of them will), they will then move on to Le Carré’s other books.

I can hear you now: Well, I can’t do that. He’s John Le Carré and I’m some unknown writer. He’s had movies made from his work since 1965.

Yep. And some of those deals were absolute horseshit for him. At least people knew the first movie was based on his novel, The Spy Who Came in From the Cold. But that’s a sidebar.

Because you don’t get something you don’t ask for.

In an early negotiation of mine, I asked for “based on the novel by” up front, like the Carré credit. The person I was negotiating with balked. They promised the credit “somewhere” in the package, but not up front.

Up front or I walk, I said, because I really didn’t care about anything except the credit.

The person I was negotiating with said, “Not even … got that in the first seasons of the TV show.” He listed a super famous author, whom I happen to know well. That super-famous author had a terrible agent/manager/packager. The agent/manager/packager all got his name and his partners’ names as producers above the line, where the author name should have been.

I wasn’t going to be sucked into that argument. I don’t like what-aboutism. Besides, the person I was negotiating with was negotiating with me, not my super-famous friend.

I reiterated that I would walk away if I didn’t get that credit and a producer credit as well.

Both are in the option, which is still active, and actually moving forward. We’ve also reserved merchandising rights to be negotiated later, as well as a few other things.

When I started that negotiation, I told the person I was negotiating with that I cared about two things above all else—proper above-the-line credit and retaining as much of my copyright as possible. I want to license  the pieces of the copyright myself, not try to claw those pieces back from a bad deal.

A claw-back is awful. It happens all the time.

Starry-eyed writer makes a deal for what they consider to be a lot of money with a Hollywood shark. Realize this: No one defines “a lot of money” the same way.

Hell, you don’t even define it the same way at different points in your life. To 20-year-old me, $100 was a lot of money, especially during that month when I only had $50 to my name.

Nowadays, a lot of money to me has at least 6 zeros behind the number. A shit-ton of money has 8 or more zeros.

The second thing you need to realize is that an option, which is a two-fold promise between you and the other party, is a contract. Let me explain an option just a tad better.

Often someone will approach you, representing a movie company, a producer, a studio, something, and they’ll offer to option your book. The option means that they get to have exclusive control of your book’s life in Hollywood for a set period of time while they shop a deal. They pay you for that right (or they should).

However, that option is a contract. In fact, it’s the future deal in miniature. The promise is this: should the movie company, producer, studio, something successfully put together the pieces of a movie and the project moves forward, at some point, they will contract with you on the exact terms that are in the option.

So if the option pays you, say $5000, promising $500,000 when the movie gets a green light, then when that movie gets a green light and it stars the most famous people in the universe who are all getting paid in the millions and everyone knows this project will make tens of millions, you won’t be able to renegotiate your measly little half-million dollar deal. You’ve baked that sum—and all the other parts—in with the option.

Here’s the biggest problem, though. Most writers only look at the money part of the deal. They ignore all the other terms in what is usually a 10 to 25 page document.

I know writers who have never had a movie or TV show made from the option they signed years ago, but that option is still in effect, and that option bars them from doing anything with their property as long as the option is still being shopped. Some of these options are open-ended (which, technically, is not valid, since a contract needs an end date), and some are for as long as ten years.

It’s ridiculous, and it comes from not understanding anything about copyright and licensing. But the writer got that up-front option money and will eventually make millions, right?

No.

If you license only the rights needed to make the movie/TV show, and keep all the other parts to your copyright, then you will make a lot of money in the long run.

If you license everything, which is what most writers do (because they have bad advice), you might even lose the right to write in your own fictional world.

Here’s what you need to know about Hollywood money.

1. Let the person you are negotiating with mention money first. Even if they ask you, “What do you think is fair for this option?” don’t answer the question. Make them give a number first.
2. If that number is zero, walk away. They don’t respect you. They won’t negotiate in good faith ever. Walk—no, run away. Never ever ever ever give a shark something for free.

Oh, you say, they’re putting time into it. It’s an even trade-off. No, it’s not. This is a shark tactic, and an exploitative one at that. Run away.

3. Your money number should vary depending on the type of deal being pursued, but know this: never do a shopping agreement for less than $1000 (and that better be a short agreement, like 3 months). Never do an option for less than $5,000 (and again, that better be a short option, like six months). And never do a movie deal for…wait!

There’s no rule on movie deals. Because a deal made in Germany might offer good German money for the German market, but horseshit money for the global U.S. market.

You need to understand this stuff before you get too deep into negotiations. How do you learn it? By paying attention. There really aren’t any good books on this topic at all. You need to find the bits and pieces as you go along.

You’ll note I didn’t explain shopping agreements above. That’s your cue to research it on your own.

Why do I have such tiny numbers up above? Because they’re a rule of thumb. You can make more. You’ll certainly be offered less. Most of the time, the people who contact you will want to get your book for nothing while they put it on the market. Don’t do that.

Also, once Hollywood comes calling, make sure your copyright is clearly in your name. For those in the States, that means actively registering your copyright if you haven’t already done so. Why? Because some small deals are all about copyright squatting. I explained that in full in a piece that became part of Closing The Deal On Your Terms, but you can find it for free here.

4. Make sure this clause is in any agreement you sign with anyone: All rights not mentioned in this agreement remain with the author (or some version of that wording).
5. Have an IP attorney who specializes in movies/TV for the country in question work on the negotiation with you, and help you with the contract. Please. You won’t know 90% of this stuff. It’s different in the U.S. than some place as close to us as Great Britain.

In fact, one of my readers just sent me this book for you U.K. writers. (Please note, I have not vetted the book.) It’s expensive, but it might be worth checking out.

6. Finally, know if you can be bought. Dean and I had this conversation 15 years ago now. I was negotiating a Hollywood deal, and he asked me this: What is the amount of money that would cause you to sell your entire copyright to a movie studio?

My answer: There is no amount of money that would cause me to do that.

He said: What about, say, $20 million?

I said: Nope. I’ll walk if they want my entire copyright. No matter what.

I mean it. Even now. You can offer me a ridiculous amount of money, and if you want my entire copyright, you can take a flying…well, you know.

I won’t do it.

And that’s me.

You might be entirely different.

However, if you actually have a number, never tell anyone what that number is. Because you might get offered more if you keep the number secret. If you tell the entire world, you’ll never get more than that number.

But know it. Because that’s the number that could cause you to make bad decisions.

Or…if you really decide you need that number to get through the next few years, be happy with it when you get it no matter what happens to your copyright or the project. Because you needed that money when you made the decision.

If you take nothing else out of this post, take this: Defend your copyright. It is yours. Don’t offer any parts of it for free to anyone. Make sure you license as little of it as possible.

And never, ever, ever act like my non-business-minded friends.

Do your negotiating in writing, which means email, not text. Don’t mention money first. In fact, don’t mention it at all (unless someone tries the stupid “for free” thing. Then say, I don’t do free options, and leave it at that).

Do mention that you want above-the-line credit for your book. (And make sure you use the correct terminology for whatever entity is approaching you; the language differs in different countries and for movies as opposed to TV.)

Be prepared to walk away.

In fact, walk away a lot.

These deals, if improperly negotiated, could have a negative impact on your entire writing career.

Don’t be greedy. A TV/movie deal usually won’t make you rich, even if you’re promised riches. It might, in fact, hamper your ability to work on your own novels if you do it wrong.

Hire an attorney, not an agent/manager, and certainly don’t listen to a book agent on any of this.

There are a lot of other tricks to dealing with the TV/film industry and I’m not going to tell you what they are, because then I have them in print, which is not something I’m going to do.

Figure it out on your own. Research deals gone wrong. Read the finished contracts that are online (usually as part of a court case). Learn copyright.

Educate yourself.

Yep, it’s a lot of work.

But there’s a lot at stake.

No one will take care of you when it comes to Hollywood. The very mention of it makes everyone somewhat crazy. Only the people who have bothered to learn the industry do well in it.

Everyone else is just a chump or a scam artist.

I warned you.

I hope you listen.

******

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“Business Musings: Money  (Hollywood Part 4,” copyright © 2021 by Kristine Kathryn Rusch. Image at the top of the blog © Can Stock Photo / iodrakon