Producing a Story, Step 4: Your Contract

You have a Story.

You have a Writer.

You’ve picked an Executive Producer.

Stop.

If you don’t have an entertainment lawyer or agent, you need to get one now.

If you need one, let me know. I have trusted names.

No, you haven’t done anything wrong. You’re in one of those moments where preparation and opportunity collide to give success. You’re in a place where you could make it big. If you mess up this negotiation, it could be the difference between feast or famine, not just monetarily, but for your career as well.

At this point, the EP you've selected is likely playing hardball. They have a staff dedicated to the deal and money-making processes, including lawyers and negotiators who know the industry standards of contract writing front and back. If this is your first time in this situation and you don’t have someone on your side that knows the process, you’re going to get steamrolled. Your contract is simply business, so they’re going to try to get as much out of you as possible. 

I’m not an entertainment lawyer, nor am I a talent agent, so I won’t pretend to go line by line on the contract process, but I WILL touch on the most significant point. 

The executive producer will want as much control over the story as possible. They would be most happy to pay you a seemingly large amount of money for the entire intellectual property, allow you a creator credit and some input as the story progresses, and call it a day. Without an entertainment lawyer or agent, that’s the deal you’ll get even if you don’t want it. If you wish to sell out and not be involved, this deal might look pretty enticing. But if you want to make a lot of money, I promise you that is not the deal you like.

With proper representation, the deals you make will look much more fertile and open the door to future opportunities and collaborations. Instead of selling the story to the EP, you will lease them in a deal explicitly written for this endeavor. Your story is worth money for as long as there’s someone to tell it. If it’s a good enough story to be told once, it will be good enough to tell again. When JK Rowling wrote the Harry Potter books, she maintained creative control and ownership over her story. That's why she’s been able to sell or lease the rights to specific industries. She sold the publishing rights, the film rights, the themed attraction rights, the staged theater rights, and honestly, who knows what else she has in development at this moment. While I haven’t seen the deals, I can guarantee they all have either expirations or buyback options, allowing for more future opportunities.

You have the chance to make a lot of money if you maintain ownership and creative control, impose strict guidelines on what each new endeavor is allowed to do and not, and make smart decisions about what you ask for in terms of compensation. The key to financial success is crafting agreements that continue paying you through royalties. You’ll make a licensing fee for the story, and as big as that guaranteed sum might seem, that’s the little money. The real money comes in the percentages you set as portions of gross income for the project. You’ll take part in the merchandise sales, ticket sales, creative consultant fees, and so many other income sources from budget line items.

Your deals should always be based on gross income calculated at specific times throughout the project’s life, not profit. Contracts based on profit percentages may not bring you any payments because projects often don’t make a profit for a long time, if at all. If you base your deal on a percentage of total gross sales, you establish yourself as an escrowed operating expense of the project to be paid upfront rather than an afterthought once all the bills are paid. This structure is much more likely to make you money, even if the project doesn’t. 

It’s imperative to have your agreement with the executive producer right for you and the next step: budgeting. Your contract will affect the budget in many ways. It will make it more difficult for the EP to profit for themselves and the investors they find, but remember - without you; they won’t make any money at all. As I mentioned, the EP has many people on their staff, including a team that knows how to budget and model projects to make money. They’ll make it work. It’s their job.