I've been offered a Literary Purchase Agreement for a script that made the Finals of PAGE but would be produced on a low-budget. As the purchase price is modest, does anyone have any examples of wording for a "net profit share" e.g. an industry standard % for writers that could be included on the back-end to offset the purchase price? Is that even reasonable to ask?
Screenwriting : Net Profit Share in a Literary Purchase Agreement due Low Budget by GJ Harvey
Net Profit Share in a Literary Purchase Agreement due Low Budget
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Congratulations on your script making the Finals and getting offered a Literary Purchase Agreement, GJ Harvey!
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I wechat you just now.
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There's two ways to go that I know of:
1) Your backend is stated as Pari-Passu with the producers in the contract. That means your points are the same as their points.
2) You are included as profit participant with a determined ownership of the project that's a percentage of the producer's pool. That gives you a cut of everything and puts you higher up the waterfall, usually right behind the investors.
Please note that residuals on films are rare, especially on low budget films on streaming platforms.
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Thanks all - I appreciate the advice!
FYI, I was also advised to seek a 12-month Option agreement first, and then the purchase price can be paid (the remaining balance) when production begins - otherwise it could be sold outright, not made for whatever reason, and ownership doesn't return to the writer.
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It depends on what the buyer and you feel most comfortable with, and works with costings.
An option gives both them and you a way to back out if certain things don't happen within a certain timeframe. They never actually purchase the rights. They only purchase the exclusivity to buy the rights within said timeframe.
A purchase agreement is conclusive, and should command a significantly higher price that's effectively a buy out.
If they are committed to making a film, it really should just be a case of financing and purchasing the rights.
An option is something more suited to a situation where other entities may also want to buy the rights. It's kinda like a non-returnable deposit.
If they're saying, "Hey, this looks pretty cool. We might be able to raise funds and make it. We'll pay you when we have the money", you need ideally be looking at an option deal that puts some fire under their feet.
Low-budget producers generally don't do options though, certainly not for significant sums. They can't afford to lock in the numerous projects they are pitching.
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Congrats!!!