Chapter 17: The Basic Agreement

Jonathan Friedman watched Matthew Broderick leave rudely and frowned slightly. He gestured for Simon to enter his office and asked, "Simon, do you know Matthew?"

Simon didn't hide the truth and briefly explained their previous encounter at the airship bar.

"Oh, that's a minor issue," Jonathan chuckled casually as he sat behind his desk. "I'll arrange a meal with Matthew sometime, a handshake and it'll all be settled. There shouldn't be irreconcilable issues between you young people."

Simon nodded, not taking the past incident too seriously. Noticing Jonathan seemed distracted and appeared somewhat tired, he asked, "Jonathan, haven't you been resting well lately?"

"It's nothing, just been a bit busy these days."

Hearing the young man's concerned tone, Jonathan hesitated while searching through several documents on his desk, suddenly feeling reluctant to present the drafted contract.

Still, Jonathan eventually handed a blue folder to Simon, resolving to compensate the young man in the future as much as possible. He spoke gently, "Simon, there's news about the script. However, the studio checked your background with the WGA and knows you're a newcomer, so the offer isn't very high. Moreover, they are interested in another script of yours. I saw the outline at Paramount yesterday; it's excellent. Take a look at the contract."

Simon, sensing Jonathan's reservations and perhaps anticipating what was to come, still opened the contract and began to read carefully.

Jonathan, watching Simon scrutinize the contract, really wanted to leave the room.

He knew Simon wasn't the kind of naive newcomer who would leap for joy just because his script was being purchased. He dreaded seeing Simon's reaction after reading the contract.

As if heaven had heard Jonathan's thoughts, the office door was knocked, and Owen Wright peeked in, "Mr. Friedman, Mr. Broca is here."

As his assistant finished speaking, Norman Broca, standing outside, glanced at Simon and beckoned Jonathan. "Joe, could you come out for a moment? I have something to discuss."

Reluctant to interact with Norman Broca these past days, Jonathan found it even harder to face Simon now. He stood up, introducing Norman to Simon, who was also rising from his seat, "Simon, this is Norman Broca, the president of WMA. Keep looking at the contract; I'll be back after talking with Norman."

Simon nodded to the older man in the black suit, with grey-white hair, slightly shorter stature, and a prominent Jewish nose, who did not enter the room.

Sitting back down, Simon returned his focus to the contract.

As he delved deeper, his brow furrowed more and more.

Frankly, Simon wasn't too concerned about the basic script fee of $100,000. For a newcomer, this offer was already quite impressive.

$100,000 was enough for him to complete his project "Run Lola Run."

However, it was a full buyout contract.

$80,000 to buyout all rights to "The Butterfly Effect" and $20,000 as a down payment to secure a three-year first option on "Final Destination." Furthermore, if Fox decided to proceed with "Final Destination" within the next three years, the renegotiation would still involve a full rights buyout.

After flipping through the contract, Simon could hardly believe that Jonathan would offer him such a stringent agreement.

In Hollywood, screenwriting is a very unstable profession. Even members of the WGA spend most of their time unemployed annually, many needing to find additional work to make ends meet.

To secure more rights, Hollywood screenwriters are among the most frequently striking groups in the industry.

After decades of contention with studios, the WGA gradually reached a "Basic Agreement" with the Alliance of Motion Picture and Television Producers to safeguard the basic treatment, minimum wages, health insurance, and pension plans for Hollywood screenwriters.

For screenwriters, the most critical part of the "Basic Agreement" isn't the minimum script fees stipulated but the residuals that offer long-term income.

According to the latest version of the "Basic Agreement" signed in 1985, aside from two tiers of minimum basic script fees based on the movie's production cost, screenwriters also receive residuals from video and television broadcast revenues.

The residuals from video sales are 0.3% of the income from up to one million units sold, and 0.36% thereafter.

Furthermore, the splits for television rights vary based on the type of platform—public television, basic cable, premium cable, pay-per-view, and international stations—providing screenwriters with income not inferior to video residuals.

Since the 1980s, with the explosion of the video market and the ongoing development of television networks, Hollywood movie revenues from these sources have steadily increased, now accounting for a third of total box office revenue.

Thus, even a movie with only $30 million in global box office might generate equivalent video revenue.

With an average

 home video price of around $30, $30 million in sales corresponds to about one million units sold. From this, a screenwriter could gradually earn approximately $90,000 in residuals from video sales.

The income from subsequent television rights is usually comparable to that from video sales.

Combined, these could total around $200,000.

This sum far exceeds the average script price in 1980s Hollywood and is usually several times the initial script fee negotiated with movie studios.

Moreover, these residuals represent a long-term, recurring income, ensuring a screenwriter's livelihood even if they find no work in the following years.

Simon had full confidence in "The Butterfly Effect" and the prematurely unearthed "Final Destination."

Given consumer habits, as classic horror films, these movies might perform even better in the video market than in theaters, potentially exceeding sales of one million units.

Thus, securing a residuals agreement could mean hundreds of thousands of dollars in future earnings from these scripts, far surpassing the current $80,000 basic fee.

Simon wasn't a WGA member, which was true.

In fact, he had no plans to join the WGA soon, so he wouldn't benefit from the protections of the "Basic Agreement."

However, in the well-established Hollywood film industry, residuals are a standard practice for screenwriters.

If a screenwriter has a reliable agent or even a modest understanding of the industry, and the counterpart is a legitimate Hollywood film company, both parties typically sign agreements that include residuals.

But now, a vice president of Hollywood's largest talent agency had secured for him a downright ludicrous buyout agreement.

At one moment, Simon truly felt an urge to throw the contract in his agent's face.

Yet, remembering some details in Jonathan's expression, Simon calmed down, turned his head to look at the office door, and waited patiently for his agent to return.

Meanwhile, in Norman Broca's office, Jonathan Friedman, whose heart had been heavy since yesterday afternoon, could no longer restrain himself after hearing his superior's demands. He raised his voice and gesticulated, "Dislike? Just because of a simple dislike, he wants to kick Simon out? That's unreasonable. Norman, do you know how awkward it was for me to hand that contract to the kid? I'm a vice president at WMA, and I handed my client a contract that not even a third-rate agency would dare present. And now, you want me to tell him he's out, that he'll have no further involvement with the movie? How can I possibly say that?"

"Of course, it's only $50,000 left. How many 18-year-olds in the entire federation can earn $50,000? What else could he possibly be dissatisfied with?" Norman Broca saw Jonathan's softening stance and pushed harder.

Last week, before the script was presented to the studios, Norman had wanted to revise the script to increase Matthew Broderick's role, which Jonathan had refused, claiming the script was already perfect.

Now, using Matthew's dislike of Simon as an opportunity to remove him, Norman could let his trusted screenwriter handle it.