Exclusions to Producer's Fees from The Budget

[Jazzed]

Hi Dynamic DD Bad-Azzes. In need of some guidanceand advice.(please and thank you) I'm entitled to a percentage of the production company's producer fees on a film in development. But they wish to exclude a couple of $ streams. It appears that this feature film will actually get made: A-List actor on board to star and is also co-writing. Established Production Co.

Clause reads: Contingent compensation for the life rights (my %) of (1) the Production Company's share of producer fees from the budget for the first Program "excluding overheads" and (2) the Production Company's entitlement to profits from the first Program (excluding the Production Company's entitlement to (1) the Producer offset, Export Market Developments Grant or similar tax incentives/rebates; and (2) profits attributed to investments, assigned equity, grants or deferrals).

So my concern is my compensation will be substantially lessened, if 'overheads' is just shorthand for producer fee.

So my understanding is that the 'producer 'offset" is a rebate (a source of funds) for producers of Australian films (it may be shot there) which I'd also be excluded from.

As you can see my 'understanding' of such producer lingo, unfortunately, is quite limited. It just seems like I would not be getting a fair share of some substantial $. So I'd be limited to the remaining 'producer fees' in the budget. But if those fees are already spoken for by way of "overheads"... where in the budget would the alms for the poor come from? Lol.

Our original agreement was that I get compensated pari passu--side by side; at the same rate or on an equal footing.

What do y'all think?

[docgonzo]

Doesn't matter what we think. What does your attorney think?

[Jazzed]

Don’t have agent:manager/attorney

Is it standard in the industry for ‘overheads” and/or “offsets” to excluded? Would any of you agree ( or have agreed) to these clauses?

it appears to be time to consult att.

[Done Deal Pro]

Definitely talk to a lawyer, but yes, there are certain exclusions that come into play. And though I don't know all the details of your deal nor am I a lawyer, there are certain offsets that come into play and not that so unfairly so. Yes, writers are done wrong many times, but if the producer gets say $100K to do something, but it costs them out-of-pocket $50K in terms of their overhead and expenditures, then they aren't going to give you a percent of their "gross" but rather a percent what they finally net when all is said and done. If they get rebates back then again, that's not really profit but rather a refund towards the budget.

There are many, many line items (costs) in a budget. Who gets what, why, etc. Lots of costs, as I'm sure you know. Again, I don't know your or this full situation, but this can fall a bit in line with what studios do. A film makes $250 million at the box office, for example. It costs $100 million to make the film, then another $40 million in P&A. Plus the studio has to pay it's entire staff, pay for any interest fees, costs of running a studio lot, bonuses to stars or filmmakers based on gross dollar points (though rarely given out), and so on. Their profits drop considerably, thus there isn't a $250 million dollar profit any more. Maybe more like $40 million or even much less, which by the end of the year disappears due to three of their other films that cost a lot of money and bombed at the box office.

If you are dealing with some real money here, along with a star rewriting you, etc., then get an entertainment lawyer to look over this. If you have already signed and agreed to anything, it might be too late. If you have not yet, then a lawyer can help a great deal, obviously. Also, get all the money upfront you can. You'll pretty much never see points or percentage profits due to creative book keeping and/or projects not doing as well as everyone hopes.

And in case it might help too, you should be getting paid say approximately 3% of the budget of the film, period. Get a floor payment and probably for the producers' sake a ceiling would be applied. You should somewhat already know what you are getting. Any little additional profits coming in, which you will again probably never ever see, should just be considered icing on the cake or a fun little bonus.

[JeffLowell]

Let me just echo: A-list star, established production company... it would be suicide to not at least hire an attorney on an hourly basis. They seem to be offering you net points, which are also known as "monkey points." The odds of them paying off are very low.

The only money you should ever count on getting is the fees you get before/during production.

[Jazzed]

Hi DD Pro; very much appreciate your insights. Hi Jeff. Very aware of your status/experience. Tip 'o my cap to you sir.

I'm to get 15% of whatever producer fees the production company gets from the budget; incl. any long-shot back end dough. Was to be straight-forward; pari passu. That would be the money 'I would count on".

We verbally agreed to that; biz office was to send out agreement; but didn't. Fast -forward 60 days, A-List star on board-and several
Zoom conferences conducted with star and co-writer and co-writer/co-star.

Tremendous progress on script. Producer now sends copy of agreement for my review and signature. But now has a couple of changes. 'Overhead exclusion' included as well as 'offset'. Not concerned about 'offset', just a basic rebate to producer for filming in their country and limits to what % of rebate can go in budget as producer fees) So be it.

But if the 'overhead' is inflated --heard it's common-- to provide the producer some additional producer fee certainty... that could greatly affect my position. What is standard overheads? 6 figures? 7? So that is really my only concern.

Producer says sign if the agreement reflects my understanding or provide further comments

So, as per your advice-- I will engage an attorney--hourly basis. If this is 'standard in the industry' to be excluded from 'overheads', I won't rock the boat.

For purposes of clarity on why I requested this structure: I did not request any upfront monies or 'reimbursement' for my decade of travails hustling the project. I only requested a 'nominal' contingent sum for the film rights to my book which the film is based on. 5k floor, 10k ceiling. In return for that, and the exclusive life rights I hold, agreed to a producer credit and decent slice (15%) of whatever producer fees/bonuses-front/back were generated. I felt pari passu standing would secure my position of participation. But these exclusions popped up. I would most likely have structured another way had these exclusions been brought up initially.

But-- I'm not certain how all this works... and so maybe I'm being paranoid. I'll connect with an attorney. Was just wondering if y'all had experience with this 'overheads' exclusion clause and was 'overheads' standard in the industry, and if so... what % of budget typically goes to 'overheads'.


Thanks a zillion. I'm a huge fan of DD and of course Mr. Lowell.

[Done Deal Pro]

But if the 'overhead' is inflated --heard it's common-- to provide the producer some additional producer fee certainty... that could greatly affect my position. What is standard overheads? 6 figures? 7? So that is really my only concern.

Again, not seeing and knowing all a bit better makes it tough, but when say the Oscar nominated director/producer I worked for as his production & development assistant along with a woman who was is key assistant/personal assistant - two on his team -- went on to a film then all our expenses were covered from development through post & release. He got his salary, of course. Quite a bit. We were paid a production rates for a year & half essentially. Plus I we charged all our general offices expenses against the project. Pretty much all our overhead for offices was covered from the budget since everything we did was being done for the particular film we were working on. In between projects, he would cover the overhead & our salaries but when a movie started up the studio would start paying for all for the duration. (One is given a production number to charge all against. I probably wore some budgets out on just using couriers for deliveries for pretty much everything.)

So as I noted in my other post, most to all of that money coming in isn't really for you.

I still say, regardless of however one slices the pie, you should at the end of the day be paid approximately 3% of the budget of the film. Granted a lawyer might not say or agree with this phrasing, but I don't care how they do it, that's what you should be paid. Not only that, but if you go on location your flight, hotel room, cars to and from airport, per diem, etc. should all be provided for towards the budget of the film. They shouldn't be able to argue to much if this "A-Lister" is attached. Some money should be there. Now maybe they are working for scale or a lot less than their usual quote, but that's not your problem. You should still be paid fairly at least. Then as previously noted, if they give you bump due to success of the film, etc. then great.

But be careful of phrasing such as "10% of the producers net," etc. The producer doesn't get paid anything equivalent to the whole budget of the film, obviously. They get a set, smaller portion. Thus they might get paid let's say $75K or $100K for their work on the film. Then with this & that possibly eliminated from expenses which are surely covered by the budget, your percent could spiral downwards fast. Don't be tied to what they get or are even compensated for. Get your payment from a percent of the final budget or at least a well documented budget starting the day of production.

[finalact4]

Don’t have agent:manager/attorney

Is it standard in the industry for ‘overheads” and/or “offsets” to excluded? Would any of you agree ( or have agreed) to these clauses?

it appears to be time to consult att.

I can refer you to an attorney if you want one. He will either charge by the hour or a percent 5%. In this case if it's just to settle this point, you could go by the hour.

My experience vague language equates to "no money." If you want to be paid then it has to be specific and tangible.

[Jazzed]

Sure would love to consult. appreciate it. thanks!

[Jazzed]

Again, not seeing and knowing all a bit better makes it tough, but when say the Oscar nominated director/producer I worked for as his production & development assistant along with a woman who was is key assistant/personal assistant - two on his team -- went on to a film then all our expenses were covered from development through post & release. He got his salary, of course. Quite a bit. We were paid a production rates for a year & half essentially. Plus I we charged all our general offices expenses against the project. Pretty much all our overhead for offices was covered from the budget since everything we did was being done for the particular film we were working on. In between projects, he would cover the overhead & our salaries but when a movie started up the studio would start paying for all for the duration. (One is given a production number to charge all against. I probably wore some budgets out on just using couriers for deliveries for pretty much everything.)

So as I noted in my other post, most to all of that money coming in isn't really for you.

I still say, regardless of however one slices the pie, you should at the end of the day be paid approximately 3% of the budget of the film. Granted a lawyer might not say or agree with this phrasing, but I don't care how they do it, that's what you should be paid. Not only that, but if you go on location your flight, hotel room, cars to and from airport, per diem, etc. should all be provided for towards the budget of the film. They shouldn't be able to argue to much if this "A-Lister" is attached. Some money should be there. Now maybe they are working for scale or a lot less than their usual quote, but that's not your problem. You should still be paid fairly at least. Then as previously noted, if they give you bump due to success of the film, etc. then great.

But be careful of phrasing such as "10% of the producers net," etc. The producer doesn't get paid anything equivalent to the whole budget of the film, obviously. They get a set, smaller portion. Thus they might get paid let's say $75K or $100K for their work on the film. Then with this & that possibly eliminated from expenses which are surely covered by the budget, your percent could spiral downwards fast. Don't be tied to what they get or are even compensated for. Get your payment from a percent of the final budget or at least a well documented budget starting the day of production.

Hi DD. So I see a lot of articles stating the lead producer gets like 5%. is that a fallacy. Just thinking how to justify me asking for 3%-- no experience. I'll let y'all know what transpires. Thanks again. I'm on board now on getting a sum certain... then a lil delayed gravy perhaps that is not counted on.

[Done Deal Pro]

Hi DD. So I see a lot of articles stating the lead producer gets like 5%. is that a fallacy. Just thinking how to justify me asking for 3%-- no experience. I'll let y'all know what transpires. Thanks again. I'm on board now on getting a sum certain... then a lil delayed gravy perhaps that is not counted on.

Roughly 3% or even a little less isn't such a nutty number for someone who wrote the script which the entire film will be based on. Granted, a writer won't put in the blood, sweat & tears a producer does physically getting a movie made. Those are some long, long days with lots of stress. But you are the god of the world. There wouldn't be a film without your script, and I say that with all the humility in the world for writers.

Now many out there -- not just writers -- take a lower salary to get their career going so nothing "wrong" with that. A successful movie can mean more to a career than just cash-in-hand in the long run. Mainly I'd say, try to get above scale, particularly if they have raised millions and millions to make it. As previously noted, you're pretty much guaranteed to not see anything after the payment for your script based on various factors. Thus, try to get what you can now to cover you for your hard work and keep you going until hopefully your next project.

Also, if the "A-list" star is doing rewrites, they might very well try to muscle in on your credit; thus get what you can to help soften the blow. If you already make some decent money from other work or just have some money in the bank, then get your script made without too much fuss possibly. Sure. But fair is only fair. 3% or even 2.5% of the budget as a payment isn't unreasonable. But you are right, they will surely balk at that a little if this is your first sale with no rep and depending on the budget.

Try to find out what they are looking to make the movie for, before you mention any numbers -- if you haven't already heard. Then figure a number based on that working with that percent as simply a guide. A floor and ceiling are a decent way to go for everyone's sake. Think about what's the least amount of money you'd be fine selling your script for. Maybe add $10K to that -- -- then work from there. And if you can't get the budget out of them, try to find comparable films and research what they spent and work with those numbers as reference. If an A-lister is involved, then somewhere in the neighborhood of WGA minimum isn't unreasonable. You sound grounded enough, and that's great. You don't want to walk in and demand $5 million for your script. Just get a fair enough shake for your hard work at least. Cover you for your time to write the script.

At the end of the day, the question in many ways is, what payment can you personally live with and not have (too much) regret in the long run?

[Jazzed]

Roughly 3% or even a little less isn't such a nutty number for someone who wrote the script which the entire film will be based on. Granted, a writer won't put in the blood, sweat & tears a producer does physically getting a movie made. Those are some long, long days with lots of stress. But you are the god of the world. There wouldn't be a film without your script, and I say that with all the humility in the world for writers.

Now many out there -- not just writers -- take a lower salary to get their career going so nothing "wrong" with that. A successful movie can mean more to a career than just cash-in-hand in the long run. Mainly I'd say, try to get above scale, particularly if they have raised millions and millions to make it. As previously noted, you're pretty much guaranteed to not see anything after the payment for your script based on various factors. Thus, try to get what you can now to cover you for your hard work and keep you going until hopefully your next project.

Also, if the "A-list" star is doing rewrites, they might very well try to muscle in on your credit; thus get what you can to help soften the blow. If you already make some decent money from other work or just have some money in the bank, then get your script made without too much fuss possibly. Sure. But fair is only fair. 3% or even 2.5% of the budget as a payment isn't unreasonable. But you are right, they will surely balk at that a little if this is your first sale with no rep and depending on the budget.

Try to find out what they are looking to make the movie for, before you mention any numbers -- if you haven't already heard. Then figure a number based on that working with that percent as simply a guide. A floor and ceiling are a decent way to go for everyone's sake. Think about what's the least amount of money you'd be fine selling your script for. Maybe add $10K to that -- -- then work from there. And if you can't get the budget out of them, try to find comparable films and research what they spent and work with those numbers as reference. If an A-lister is involved, then somewhere in the neighborhood of WGA minimum isn't unreasonable. You sound grounded enough, and that's great. You don't want to walk in and demand $5 million for your script. Just get a fair enough shake for your hard work at least. Cover you for your time to write the script.

At the end of the day, the question in many ways is, what payment can you personally live with and not have (too much) regret in the long run?

Hi Very well thought out and sound approach on virtually every front. I may not have been clear: I wrote the book the film will be based on. I own the character/life rights to the subject the film will be based on. So... the WGA minimums and related %'s spoken of are for screenwriting... which they are not using my script. I did write a script... but they never showed an interest in it. The star and c-star are writing the script. So that's what I'm bringing to the table. I connected with the co-star... had the book, script, and liffe/character rights---there were a few years of waiting for his schedule to have daylight--as he was building a nice acting career. I was patient. He wrote a rough draft himself... brought it to a proven producer who got the A-List actor on board. The actor and co-star-- both with writing credits decided to write it themselves with a new approach. I put my screen wrting ego aside and thought, 'let's ride'. Happy to get these cats on board and they're excited about things. Definitely dont wanna rock this boat... just looking for what standard in the industry would be. The exclusion clauses are what caused me to look at another route as we initially agreed and no exclusions were ever mentioned... so my position doesn't look as promising with those exclusions in place... so I'll look to exclude the exclusions or as you suggested... get a sum certain via a floor. But what are the expectations for one like me who brought what I did to the dance? --Note: Of course they are looking for the biggest budget they can generate... the A-List element helps a lot...and producer is proven. Co-star is solid.

Thanks for your thoughts. Invaluable.

[Done Deal Pro]

Hi Very well thought out and sound approach on virtually every front. I may not have been clear: I wrote the book the film will be based on. I own the character/life rights to the subject the film will be based on. So... the WGA minimums and related %'s spoken of are for screenwriting... which they are not using my script. I did write a script... but they never showed an interest in it. The star and c-star are writing the script. So that's what I'm bringing to the table. I connected with the co-star... had the book, script, and liffe/character rights---there were a few years of waiting for his schedule to have daylight--as he was building a nice acting career. I was patient. He wrote a rough draft himself... brought it to a proven producer who got the A-List actor on board. The actor and co-star-- both with writing credits decided to write it themselves with a new approach. I put my screen wrting ego aside and thought, 'let's ride'. Happy to get these cats on board and they're excited about things. Definitely don't wanna rock this boat... just looking for what standard in the industry would be. The exclusion clauses are what caused me to look at another route as we initially agreed and no exclusions were ever mentioned... so my position doesn't look as promising with those exclusions in place... so I'll look to exclude the exclusions or as you suggested... get a sum certain via a floor. But what are the expectations for one like me who brought what I did to the dance? --Note: Of course they are looking for the biggest budget they can generate... the A-List element helps a lot...and producer is proven. Co-star is solid.

Thanks for your thoughts. Invaluable.

Ah. I gotcha. Yeah, that is a slightly different story. So you are looking for what you should be paid for the rights to your book only. Right?

In case, the same basic rule could still apply. They may be adapting your material but the fact there is so much there already to use in some ways makes writing the script a little easier relative to starting with nothing. So maybe 2% of the budget for your story/book is still fair -- and get a floor and ceiling.

Not again that it might help that much in the long run, though it could depend on what you want to do next, but get an EP credit. Why not? You still created the overall foundation for the movie and I'm sure it'd be nice to at least (feel) like you are part of the project and have a bit of a voice. (Not sure if you are wanting to go to set or what they will allow or even cover you for in terms of cost. But take a credit, especially if they are not paying you a whole lot.)

In addition, be sure they give you a "Based on the book by credit" in the main titles and hopefully as single card credit -- meaning it's not shared. It should also be the same size as everyone else's credits -- director, producer, script writers, DP, etc. If shared, it should go on the same card as the screenwriters' names -- shared card but no other credits on there.

And to save some typing timing, here are links to a few articles about selling your book rights that might help a little too:

https://www.writersdigest.com/whats-...u-need-to-know

https://www.sidebarsaturdays.com/201...w-you-want-it/

https://www.quora.com/How-much-shoul...how-is-it-paid

Hope this helps.

[Jazzed]

Thanks DD. So I got a nominal amount for book rights and a credit for 'Based on the book by... And I got a producer credit--did not take the offered an co-exec or co-producer credit --for life/character rights I secured from the subject of the film's heirs. Thanks for the links. So I'm looking at it like... I got the rights from the family to do the book, wrote a screenplay to attract interest for a film... got the interest-- connecting with the actor who will co-star --who connected to the producer who then brought on A List actor. So my POV; one producer brings the money. Another producer brings the ability/experience to physically make the film. And I'm the third producer: who brings to the table the story rights and life/character rights that the film will be based on. That is what I'm looking to be compensated for. Started the project from scratch... I'm going to be on set--as an observer (my idea:. I'm a novice and wish to stay in my lane but have a bird's-eye view) I Have the right of consultation on creative decisions. (I'll be on the inside as **** happens giving my 2 cents... but not wielding any real power.... lol) I get a % oF producer share of net profits. IF the lead producer gets in on ANY profits that may arise after film breaks even (if it does)... I get 15% of those profits. Any awards ceromonies --I'm in on. Transportation and lodging for the above. Just looking to secure my end for story rights and life /character rights
I own exclusively.

[Done Deal Pro]

And I'm the third producer: who brings to the table the story rights and life/character rights that the film will be based on. That is what I'm looking to be compensated for. Started the project from scratch... I'm going to be on set--as an observer (my idea:. I'm a novice and wish to stay in my lane but have a bird's-eye view) I Have the right of consultation on creative decisions. (I'll be on the inside as **** happens giving my 2 cents... but not wielding any real power.... lol) I get a % oF producer share of net profits. IF the lead producer gets in on ANY profits that may arise after film breaks even (if it does)... I get 15% of those profits. Any awards ceremonies --I'm in on. Transportation and lodging for the above. Just looking to secure my end for story rights and life /character rights.

I see. Well, as noted here and in other threads, probably best to somehow get a lawyer involved for some of this minutia and any legal entanglements that go with your life rights vs. the book.

Granted, I'm not a lawyer, but in paying for the book rights, they are buying your story and in a sense your life rights too. Right? Producers can go to a "real life" individual and simply buy their life rights and there is never a book (or anything even written) involved. If the producer buys the rights to an article or news story then as I recall they will then pick up life rights from the individual or individuals in the article. But that's to cover their bases and have their involvement to some degree -- a "signing off" on the project, if you will.

Generally, what we list on the main site involving these type of elements is an author or journalist wrote something that was not about them, so when the producers acquired that material they went out and also picked up key life rights for the people the author/journalist wrote about. Two separate things. In your case, you're one in the same person, so to speak. You are the author and the subject.

Again, since there is a book involved they are paying you for, I'm not so sure how much one can divide up every little right or angle on the rights to get any more money for you. It would be a nominal fee at most for your life rights, I'd think, especially if your life/story isn't some highly sought after story. Not sure it's worth the effort to become "that guy" over possibly "nickel and dime'ing" them to death. By selling them the book and being a producer on the project, etc. it's more than implied you are on board. It seems like you've "sold" your life rights to them and what they might need. If anything, the rights of other key figures involved might be needed to possibly protect themselves (producers).

Tough to say, depending on various factors. This simply might have to be a situation in which you are involved with something that gets made, you get a little bit of money and then you look to leverage any attention and experiences you have from it to do more.