MUSINGS OF A STORY MERCHANT

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Friday, August 16, 2013

Turning Books Into Film: Navigating the Industry





This column will explore various issues involved with the process by which books, fiction or nonfiction, published or otherwise, make their way to the big or little screen. Warning to the reader: There are exceptions to everything I'll be talking about here. I'm basing this advice on describing what most often happens in film and television, not on prescribing anything.

Authors who've already made one or two sales to Hollywood, or are otherwise financially solvent, are often frustrated when their books seem to wither on the development vine; all too often they enjoy neither the financial payoff of the option's exercise, nor the emotional payoff of seeing their story on the screen.

When a sale of a book's dramatic rights is made, it's often by a 'correspondent agent' in Los Angeles, one who their literary agent hands the book off to for sale to the broadcasters or studios. The correspondent agent makes a commission—ranging from 10% to 15%--on whatever revenues are received from the option and sale. He makes money when the book sells easily, and his attention span is, necessarily, short.

A typical film deal might be $50,000 for an 18-month option ($5,000 to the correspondent agent), non-applicable against the purchase price, with a second 18 months automatically available to the buyer for the payment of an additional $50,000 applicable against the purchase price—against a purchase price of a floor of $250,000 or 1-2% of the film's "all-in" budget, with a ceiling of $500,000. Once the deal is signed, which normally takes 60-120 days, the writer receives $50,000; the $200,000 or more balance is paid on the exercise of the buyer's option, which normally occurs on the day the cameras roll (known as "commencement of principal photography").

The problem is, by far the majority of options sold to major studios and broadcasters are never exercised because the project never makes it through development hell. Studio execs, after all, aren't as motivated as managers and producers to fight through the obstacles projects encounter and get the film made. When that withering occurs, though the writer may indeed receive his rights back ("reversion"), there's a price tag involved ("turnaround"): any new buyer must repay the original buyer's investment, along with interest compounded from the date of first payment, when the new buyer makes a deal for the book's rights. Because compounded interest mounts so rapidly, turnaround costs often turn a dormant project moribund.

In a deal my company previously set up with a studio, for example, the turnaround costs now amount to nearly a half million dollars; though another studio wants to do the movie, they haven't been able to work out an acceptable buyout with the first studio (who couldn't care less, at this point, whether the movie is made or not, since they failed to make it).

How do writers and their lit agents avoid this unhappy fate? Instead of allowing their book to be sold by a correspondent agent, whose only source of income is in the commissions that come from sales (which I call "taking in a naked story"), writers can work with a manager or an independent producer to attach protective elements--a director, major screenwriter, star, or financing-- before the book is offered to the major distributors. The manager/producer's financial incentive is in receiving producer's fees, and these fees are much larger than the agent's commissions on the literary sale would ever be.

Once a director is attached, a star, or co-financing (in other words, once the project is at least partially "packaged"), the studio or broadcaster (a) has greater incentive to take on the book; and (b) to see it through to production, its further development protected by the talent now attached. The downside: the manager/producer value-added process takes longer, because of the challenge of attaching talent, etc. The upside: the book author is more likely to receive the full sales price and see the movie made, while at the same time retaining greater consultation on the process. (When a sale is made by an agent, the original author is usually out of the loop from that moment on). Generally, this is what authors come to if they still retain affordable rights to their book after they survive its option and development hell; they try to get someone passionate enough to run with it against the muddied waters of its previous history. Better to invest that time at the beginning, and recognize that it's passion and incentive that works best—as they should know from their own process in writing the book in the first place.

It's the author and his lit agent's choice: make an option deal, or focus on making the movie from the start.

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