Posted: November 16, 2007
Screenwriters sell stakes in future profits - www.usatoday30.usatoday.com/money
By David Lieberman, USA TODAY
NEW YORK — The strike by Hollywood screenwriters is taking a toll on those who count on their paychecks, as well as the studios that have shut production on most scripted TV shows.
But several A-list writers have a new way to soften the blow. They're trading their stakes in future profits from TV shows, as well as movies, for cash from Content Partners, a year-old firm backed by billionaire entrepreneurs Mark Cuban and Todd Wagner.
"We've seen a large increase in inquiries in the last month or so" as the strike deadline loomed, says CEO Steven Kram. "Most of the inquiries we're receiving now are from writer-producers."
The idea, says co-Chairman Paul Wachter, is that, "as we enter a period where a lot of people could be short a lot of money for a while, this is a way that's not really ever been there to collect money."
The strike by the Writers Guild of America is in its second week with no end in sight. At issue is how much writers should be paid when their work appears on the Internet, cellphones and other new media. Content Partners will help only the elite of the 12,000 writers on strike: It works only with people likely to be owed at least $3 million from a project.
It also only makes deals for TV shows, movies and recordings already released or aired, which aids in estimating revenue.
As productions shut down, more actors and directors are showing up. "It's not just the writers affected" by the strike, says Wachter.
Yet, the big influx is writers who shape a sitcom or drama, and are considered writer-producers. They typically have deals for a share of the profits.
Kram promised confidentiality, but adds, "These people have created some of the most successful shows on television."
The strike is just one uncertainty drawing clients to the firm. Many writer-producers also are unsure about what they might make from ad-supported airing or download sales of their shows online.
"You can see a (TV) rerun many times by going on a website of the network or production company," says Marty Singer, an entertainment litigation lawyer at Lavely & Singer. "But there may not be additional revenue paid to the writer, even though potentially there should be."
Thus, Singer, who has clients who have cut deals with Content Partners, says many writer-producers would rather take a check now rather than risk a court fight over their share of a show's profits.
Content Partners is gambling that it can handle that risk — and others such as revenue lost to online piracy. "There are always surprises," Wachter says. "It's a market — it's like a real estate deal. You project it out, and at the end of the day, one guy wins a little and one guy loses a little. But it doesn't really matter as long as both guys are happy at the time of the deal."