Columbia to Pay Writers Percentage of Box Office

Columbia Pictures on Thursday struck a watershed agreement that will guarantee top Hollywood screenwriters, long regarded as second-class citizens of the film industry, a percentage of gross receipts from the movies they write.

The deal is both a radical change in the way writers are paid and a symbolic gesture to Hollywood’s scribes. Unlike stars, directors and producers, top writers rarely get to share in what a studio earns from the movies they write and are usually compensated far less than other talent.

Columbia negotiated the unique arrangement with 33 of the most prominent screenwriters in Hollywood, but it could potentially apply to hundreds more. The deal promises certain writers as much as 2% of the studio’s gross receipts from a film.

While a very select number of highly paid screenwriters have received some portion of gross receipts in the past, it has usually been under narrow and unusual circumstances. This is the first time a group of writers will be compensated in this manner.

“It’s groundbreaking. A big moment in the movie business,” said screenwriter Gary Ross, whose credits include his directorial debut “Pleasantville” and the box-office hits “Dave” and “Big.”

Columbia, which is owned by Japanese electronics giant Sony Corp., was willing to break ranks with the other major studios because it puts the company in business with more than 30 of Hollywood’s leading screenwriters.

“This is a great deal for them and a great deal for us,” said Columbia Pictures President Amy Pascal, noting that if a movie is a big hit, writers will share in the bounty with the studio.

The deal could change the way business is done in Hollywood, with a loose cartel of A-list screenwriters negotiating against the giant studios. It could trigger a ripple effect the same way salaries for top stars were bumped up after Jim Carrey was paid an unprecedented $20 million to star in Columbia’s 1996 release “The Cable Guy.” When that deal was made, then-movie Chairman Mark Canton was scorned by his counterparts at other studios.

But it comes at a time when studios are under intense pressure to cut costs and bolster their bottom lines in the face of shrinking profit margins.

“I’m flabbergasted,” said the head of one competing studio. “You’re carving up an already highly carved-up pie and shaving another 2% margin away from the studios.”

The arrangement was negotiated over six months and kept under wraps until the announcement Thursday. Rival studio executives were shocked at the news, and most said they needed time to sort out the specifics before commenting. Even those expressing immediate skepticism may find themselves hard-pressed not to match the compensation Columbia is offering writers over the next seven years.

The deal has no effect on existing Writers Guild agreements that guarantee minimum salaries for writers.

Under its current management, Columbia is known as one of the most writer-friendly studios, relying heavily on the quality of scripts in production decisions. As part of the deal, more than 30 screenwriters--among them Ron Bass (“My Best Friend’s Wedding”), Eric Roth (“Forrest Gump”) and Phil Alden Robinson (“Field of Dreams”)--have each agreed to deliver one script to Columbia within the next four years for the same fee as was paid for his or her last similar project.

The writers can either submit their own movie ideas to Columbia or commit to at least one of five projects proposed by the studio.

“For us it’s like getting first-look deals from all these great writers,” Pascal said.

The group of 30 or so screenwriters, and all others who qualify, are guaranteed a percentage of gross receipts that the studio receives after recouping its production, marketing and distribution costs. Writers’ payments will not be affected by the deduction of distribution fees or payouts by the studio to other profit participants, such as actors and directors.

If a writer gets sole screen credit, he or she is guaranteed 2% of gross receipts--which includes the studio’s cut of box-office, home-video royalties and free and pay-television sales, while a writer sharing credit is entitled to 1%. Sole screen credit is getting rarer, because studios often hire multiple writers to rewrite and polish screenplays.

Other writers outside the group of 30 also can participate in gross receipts under the Columbia deal if they meet one of three criteria. They must have received at least $750,000 or more for a writing assignment, sold a screenplay on spec for at least $1 million or have been nominated for an Oscar or Writers Guild of America award.

Entertainment lawyer Alan Wertheimer, who helped negotiate on behalf of the writers, estimated that “probably close to 300 writers would qualify as of today.”

Only the writers specified in the original group are required to perform screenwriting services for Columbia to qualify.

“Our goal was to benefit as many writers as we could,” said Tom Schulman (“Dead Poets Society”), who is among the writers committing a script to Columbia.

Schulman is one of five writers, along with Robinson, Bass, Nicholas Kazan (“Reversal of Fortune”) and Frank Pierson (“Dog Day Afternoon”), who worked with Wertheimer in hammering out the deal with Columbia.

Wertheimer, a partner in the Beverly Hills law firm of Armstrong, Hirsch, Jackoway, Tyerman & Wertheimer, said negotiations have been underway since last summer.

The self-appointed writers alliance emerged from a much larger screenwriters caucus, known as the Thursday Night Group. Once a month for the last year and a half, they have met informally at one another’s homes to discuss issues affecting their trade.

“We have no agenda other than to talk about how we can get respect and improve the lot of writers,” explained Kazan.

Since the deal applies only to the most elite writers in Hollywood, it may breed resentment by widening the gap between the most successful and the rest of the industry’s scribes.

The largest proportion of writers work in TV, if they are lucky to get any work at all. Only half of the 8,000 members of the Los Angeles-based Writers Guild of America, West, get writing assignments annually, and just 150 movie writers earn $700,000 or more annually, according to Guild statistics.

The median annual pay for all writers is $83,500. By contrast, Hollywood’s top screenwriters get from $1 million to $2 million per film assignment. Under the Columbia deal, the writer of a hit movie could make several times that amount.

Daniel Petrie Jr., president of the Writers Guild of America, West, said he doubts that it will cause jealousy because writers will see it as progress. “I think people will see that our top writers are becoming an engine that pulls everybody up with them,” Petrie said.

He added that many of the writers in the select group could probably have negotiated the same deal for themselves but chose to commit to writing screenplays for Columbia so that a broader group of writers could share in the spoils.

Indeed, writers who weren’t involved in the negotiations welcomed the development.

“Any time there is this kind of change for the better for writers, it’s good news. It’s a healthy advancement,” said longtime Hollywood writer Larry Gelbart, whose film credits include “Tootsie.”

Wertheimer said that the group initially tried to get Columbia to lower the criteria so that all writers would qualify, and some in the group are optimistic that this will eventually happen. One screenwriter noted that although only a small percentage of writers are affected, their work represents a large percentage of the studio’s business in any given year.

Robinson noted, “When some of the top screenwriters are trying to negotiate a deal with gross points, we are always told by the studios, ‘We don’t give gross to writers.’ ”

The movie industry, Robinson said, “started with people making up stories. . . . As someone once said, ‘Writers were treated like schmucks with Underwoods,’ regarded as the least-important part of the creative team. We feel it’s high time it stops.”

Wertheimer said that for decades, screenwriters traditionally have been paid 5% of the “net” proceeds for sole credit and 2 1/2% for shared credit.

“As we all know, in the last 10 to 15 years, net profits have been an almost illusory concept,” Wertheimer said. “All the more so for writers who attract top actors and directors,” the very people, he said, “who delay net profits being paid to writers.”

Bass, who won an Oscar for his 1988 film “Rain Man,” acknowledged he was one of the rare recipients of net profit participation on a past movie and that he has in fact been paid a portion of gross receipts before, but “nothing like what is being offered by Columbia to a broad number of writers.”

“As we sat around and talked about the feelings of disrespect, we looked at the monetary side and thought actors, directors, producers and studios all share in the success of a movie, and writers alone do not receive gross receipts,” Bass said.

“Now, Columbia is stepping forward and saying to a very broad group of writers, ‘You are now going to get this.’ It’s a wonderful day.”