Mostly, when you’re starting out, the first deal won’t be great, but if the project turns out well, your second deal can change your life! Before all that happens and you’re shopping for a new home… Here’s a few basics:
For material written on spec there’s usually two types of deals offered:
1. An option / purchase – a company (or individual) will pay a small fee to option your work (usually something like $2500 – $10,000) for a limited time, usually 6 months to 18 months, and if they either produce your work (or want to own it) during the option period, they then pay you the purchase price (usually something like 2.5% of the budget of the production). Often these fees can be based on the WGA Minimums (even if your not in the WGA) but sometimes, when you’re starting out you may find that you must accept less. There will also be a backend payment component. Until you become very accomplished, whatever “points” you get on the backend will not yield much and your definition will be designed to keep money out of your pocket. The deal can also include bonuses for various things: set up bonus (if set up at a major studio), production bonus, box office bonus, etc. There’s many other sections to an option / purchase agreement. There’s also many books about these deals, as well as many lawyers looking to build their business that will help you structure a fair deal for either an hourly fee or a 5% commission.
2. An attachment – a company (or individual) will agree to shop your work to 3rd party buyers where you (and they) will negotiate for your fees later and separately. This is often the simplest way to get your work exploited by producers. It saves the time and energy often spent negotiating in favor of getting right into selling, packaging and putting together your project.
If you’re going to staff as a writer on a TV show. There’s minimum guidelines for this (they’re pretty good) and presto, the WGA will be all over you to join. Congratulations.
If you’re going to be hired to rewrite something, try to use the WGA Minimums as a guideline (if you can), they’re not that high for rewrites, particularly low budget rewrites.
Whatever the case, keep in mind: Your work is valuable and most people undervalue what they do. And… Don’t get too greedy on your first deal, focus on getting that first deal under your belt with people who have a relative track record and a passion for your work.