Copyright for Short Film Screenplay - Writer wants Profit Participation on a Short

K

Karlotta0417

New member
I've recently encountered a writer who wants me to offer him "profit participation" on a short fim that he wants me to produce. The writer is going to be the director but has not been able to show me any previous experience. I have assigned him the director's role as a personal favor to my crew's director of photography who is also the short's co-writer.

The questions:
  1. Are "profit participation agreements" common for short films for first time writer/directors?
  2. Is this an industry standard and I'm being overly sensitive?
  3. Does anyone have any suggestions on how to license a screenplay for a specific purpose only - the production of the short film and their subsequent promotion of the film at festivals, etc?
  4. Do I use the Use of Literary Material Agreement. Screenplay Purchase Agreement with a non-exclusivity agreement?
  5. Or do I just leave the project alone?

From the business side of things, I really don't have anything against the idea. My problem is in the principal. I have a team of 15 cast and crew members who have been working together for the last 6 months - we have produced 2 commercials and 4 short films. The teams only expectation has been to produce a project that is good enough to submit to a festival. The team has agreed that if we profit from anything that we do together we would re-invest the money in the company so that we can continue to learn, play and grow. The co-writer is mostly an unknown to the group yet, he walked in making demands.

I'm just looking for some feedback on the whole idea. I'd love to hear any thoughts you have on the subject.
 
Funny thing is I don't think we will make any profit from a short. It seems almost naive to me to suggest that we will. However, the writer is convinced that ANYTHING is possible - which is true although unlikely. There is nothing outstanding about the script. In my opinion it is an ok story that provides a subject for my cast and crew to study.

See, this is so silly - I don't even know why I'm wasting time on it at all.
 
Not to be blunt, but it is naive of you and the writer or anyone else to consider a profit for a short. Shorts don't make money, you do them for the love, the art and for honing your skills in the craft. At most you might make a few film festivals which have a slight potential to lead to other work, projects and networking, BUT you'll have to pay the entry fees and for travel, food and lodging to realize those benefits.

I don't mean to sound mean or negative about it but there's no sense in candy-coating the truth. Take the project for what it is, give it all you've got and move on to the next opportunity.

Robert
 
Man! It's nearly impossible to make anything like money even with a feature length film these days. A short?!?!?! Profit? You'd have a better chance of winning the lottery or being struck by lightning.

As for your questions, I'd go with the #5 answer especially if, as you say - "The writer is going to be the director but has not been able to show me any previous experience, " and "There is nothing outstanding about the script."

Your instincts seem to be correct. Walk.
 
I'll take the opposite approach and actually answer your question. Depending on the budget of the short, and how well it plays at festivals, you can make money from a short.

Is this short going to involve the formation of a production company? I just came off a short that I wrote and directed for about $50K. We setup an LLC and since we were SAG signatory we had to provide our SAG rep with a document that showed how any potential profits would be split. This is usually part of the operating agreement for the LLC that produces the short.

So, a simple answer would be to simply give the writer/director a percentage of ownership of the LLC, and for doing that complete the legal documents to transfer ownership of the script to the LLC.

Shorts actually can make money if they're done well and make it to the short list for the Academy Awards or play well at places like Sundance. There are numerous foreign outlets for quality short films. If your budget is small enough and production quality is high you could potentially make money. There are also cash awards that many of the festivals give to the winners which would fall into the same category.

Personally I'd base my decision on producing the short based on the material and if it was something I felt a connection with. It the story is blah then why produce anyway, regardless of red tape?
 
Thanks for all of the feedback. I realize that there are highly successful shorts that make money. And if approached with a project that I thought had that type of merit I would be willing to work with the writer/director to develop a compensation plan. However, this short is not that project - I SAW this short as an opportunity for my crew to gain additional film making experience. I don't expect it to be the breakout short for 2011. Anyhow, I don't mean to dwell on it.

My take away is this...make the decision on a case by case basis based on the merit of the story and the director.

Thanks again for the valuable feedback.

K.
 
Eh, I wouldn't call the feedback valuable....

Alright, thing is, you are unlikely to profit from shorts. People have already clearly established that. However, setting up profit splits and such is good practice. One that shouldn't be overlooked. Let's say you don't have contracts here. And your short gets picked up for VOD release. Or added to a collection. You are given an acquisition fee plus (or) residuals. Now you are making money...but you don't have paperwork. Who owns the short? Who should get payment. Who should get what percentage. Do you default to deferred payment plus points? Or deferred payment based on union minimums?

I'll tell you at least this, get everyone under contact. Set it up so the production breaks even. (all money the exec. producers and financiers invest gets paid back) and then deferred payment (based on union minimums) goes into effect. After that, any remaining profit (adjusted gross) is paid out based on a points system (which you determine).

Or get it under contract, and say we'll re-negotiate if/when the short breaks even.

Done.
 
In this case, it sounds like you (as producer) should be the hired hand. If the other person is writer/director, I can almost see some form of producer credit following on for him in the near future. I would just state a fee, and percentage points should film be profitable after the net. Keeping track of who has what points every time a dime comes in is a longer term commitment (should the film generate future revenue and royalties). I much rather be the one bugging that person for the revenue reports than the one responsible for creating them. Especially for a short.

Now to turn the question around on you. If you are also "funding" or finding funding for a short film project, would you go after this project? Seeing as the request is coming from the writer/director, I would be fine with the previous suggestion.

Michael
 
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