Welcome to the 88th edition of Going Bionic. Soon after last week’s column was published, one of our readers emailed me a few questions that they would like to have answered. Thus, today we’re going to answer the wonderfully insightful questions.
But first, I’d like to thank “J” for emailing me these questions. I’m honored to know that readers like “J” are out there. Knowing that these articles help my fellow indie filmmakers makes my one-handed, single-finger hunting and pecking typing style (i.e. struggle) well worth it. Okay, so here we go with the inaugural Going Bionic Reader Q&A session….
If someone like George Lucas makes his own production, is it best to strike a deal with a major studio like Fox or Universe, in exchange for a percentage?
Very few people on the planet are like George Lucas. He’s a billionaire; with a capital “B.” Thus, he can get whatever the hell he wants, because he can pay to do it all himself if the studios’ offers aren’t to his liking. Furthermore, it’s funny that you mentioned George Lucas, because Star Wars (1977) effectively changed how studios treated filmmakers.
You see, when Stars Wars came out, interest rates all across the United States were sky-high. Car loans were 18%-20%, and banks were making healthy double-digit interest on their deposits. So, when Star Wars made $307,263,857 in 1977, which is $942,636,351 in today’s dollars, 20th Century Fox decided to not pay George Lucas his due profits so they could earn interest on the money they owed him. The feeling was that a single filmmaker, no matter how successful, could do very little about it, because a multi-billion dollar film studio was simply too powerful to force a payment out of. Fortunately for Lucas, he had The Empire Strikes Back (1980) and Raiders of the Lost Ark (1981) on the horizon, so he was indeed powerful enough to make sure he eventually got paid.
But, but for all of us who are not a pop-culture changing, multi-generation effecting, social and cinematic icon, signing with a film studio in exchange for a percentage of the film, is like signing the film away for $0. That’s right, thanks to 20 Century Fox changing the rules with Star Wars, all indie filmmakers can simply forget about getting paid what they’re due. In fact, getting paid at all is considered a gift; and even that takes 18 months to three years on average.
The answer, of course, is to take what you can get up front. Hence, if a studio offers you a choice between $500,000 upfront plus 2% of the back-end net profits for your film, or $200,000 and 50% of the net, take the $500,000 + 2% back-end, because there will never be an actual back-end payment. In other words, there is no difference between 2% and 50% of the backend net, because “net” payments are like unicorns; they simply don’t exist.
In fact, the only way to ensure you’ll see a back-end payment is if you have cut of the “gross.” The problem is, “gross” payments are only paid to those as powerful as George Lucas, and even then studios will try to subtract certain fees out of the receipts. Thus, “gross payments” are almost never taken off the film’s actual gross receipts.
Do You Have A Better Chance Of Getting Paid If Your Indie Film Is A Hit?
Doubtfully. However, in the event your indie film is a hit, you will get paid to make your next film, before you get paid on the film you sold initially. This tactic reminds me of “rookie hazing” in most major sports. In the NFL, rookies traditionally carry the bags and buy meals for the veterans on the team, as a way to be initiated. Furthermore, in the NBA, rookies won’t get many foul calls in their favor from the officials. The sentiment is “you’re new here, so you’re going to have to pay your dues before you get treated as well as the seasoned professionals.” The same rule applies in the film industry. A new filmmaker with a hit indie must sacrifice the monies due to them, in exchange for being accepted as a full-fledged member of the working, above-the-line film industry.
Of course, if you really want the money, you can sue, but “you’ll never work in this town again”. You can also have your lawyers keep pressuring the powers-that-be to pay you, but by the time you get a settlement, you’ll see nothing to very little after paying your lawyers to hound the gate-keepers for a few years.
Side Note: No film studio, distributor or production company will ever admit to the above listed rule, and if they do, they’ll never admit that their company engages in such egregious tactics. But, they all do it, especially in these cash-crunched times. Keep this tidbit tucked away in the back of your mind, so when you’re faced with not getting pad the $684,654.19 owed to you, you’ll at least know why you’re not getting paid.
Okay, people. That’s what I’ve got for your today. I’d be more than happy to answer more of your questions next week, or in future articles, so feel free to e-mail me your questions at Lonelyseal@gmail.com. I hope everyone enjoyed a wonderfully relaxing Martin Luther King Day! Like always, I truly thank you for lending me your eyes and I look forward to borrowing them again next Tuesday!
I can be followed on Twitter @Lonelyseal.
The article image is “Letter and mailbox…” via Shutterstock
