General Information

J.K. Fowling has written a massively successful young adult book trilogy, "The Famine Competition" which has been on the New York Times bestseller list for 75 weeks. Based on the success of the book, the movie adaptation was all but certain. Fowling has entertained preliminary offers from many movie studios, but the studio she feels most confident in is Pinnacle Studios, headed by Phil Maker. Pinnacle has a track record of successfully adapting popular books into movies and earning critical praise and accolades but perhaps not being the most profitable films. The first book in the trilogy had massive sales, and each of the subsequent books has also performed well, but none have quite matched the success of the first book.

Pinnacle and Fowling have sent you, their attorneys, to meet and discuss this contract. This option contract is one previously negotiated by a fellow author published by Fowling's publisher and Pinnacle Studios. Both parties have agreed to use this contract as a starting point with the hopes of resolving the major issues. Both attorneys hope to return to their clients in agreement on the big points of contention in this contract. This contract has the potential to make both sides a lot of money, but only if they can come up with an agreeable solution.

The goal of this negotiation is to get both parties to agree on all the major issues, with the final details of the contract to be negotiated later. If you're successful, then the movie is on its way to getting made.

Fowling's Confidential Information

J.K. Fowling is extremely pleased with how her books have been doing; but she knows she's missing a big audience. Her publishers tell her the next step is to market the books to movie studios. Fowling began discussions with several studios and she decided that Pinnacle Studio is the one she wants to convert her hit book series "The Famine Competition" to film. Pinnacle Studios has a strong history of converting successful books into critically acclaimed movies while simultaneously preserving the integrity of the source material. Fowling has also been talking to Tigersfence Studios, a smaller studio that produces more independent fare, but she doesn't think that they have the funds or the market power to make a film of scale. Tigersfence has made her an offer for the option on the books and been extremely generous in agreeing to her terms. Michael Harbor Productions has also approached Fowling. Michael Harbor makes blockbusters, but Fowling fears her story would be a critical flop if they produced the film. Of all the studios, Fowling believes that Pinnacle is the right fit for her and these books. Your job as her attorney is to represent her interests in this negotiation and to resolve the major issues of the contract. She has her priorities, but she is willing to make the concessions it takes to see "The Famine Competition" in theaters.

The goal for today is to sell the rights to the first book in the series, "The Famine Competition." For the purchase price, she wants to be paid based on the film's budget, not a fixed sum. Fowling anticipates that the film's budget will fall somewhere between $55 and $70 million, but she doesn't know the studio's actual budget. She's aware that the industry standard in this situation is 1-2% of the film's budget; however Fowling thinks that her book's popularity guarantees the studio a commercially successful film. Fowling wants her compensation to be 3% of the film's budget, but she is willing to accept a minimum of 2.5%. However, she would be willing to give up some of this purchase price if the studio was willing to give her a percentage of profits. A number around 1% of gross profits over $200 million would be a good amount of additional compensation, at that amount the movie is a huge financial success and Fowling thinks she should be paid for her part in that success. Fowling understands this movie's potential to make a lot of money and having a compensation plan based on the profits of the film could make this a very profitable agreement for her.

However, because her guaranteed compensation is linked with the budget of the film, she would like more security in that number with a minimum payout. She thinks her minimum compensation should be the percentage of the budget she agrees to multiplied by $55 million. If that number ends up being 3%, then her minimum payment is $1.65 million. She also believes that while there's a floor on this number there doesn't need to be a maximum amount. If the production budget spirals out of control, it's only fair that Fowling's compensation increases accordingly, but she is willing to compromise.

It is also important to Fowling that the studio makes a quick decision on this option contract so that a film can be completed quickly while her books are still wildly popular. The option contract sets the amount of time withing which the film must be completed. She would prefer only a 6 month option on the book, but she understands that it may take the studio longer than that to fully exercise its option in pursuit of production of a quality movie. She would be willing to allow the studio a longer option. If the studio takes longer than six months, she would like to be compensated for the delay. Fowling feels that a reasonable option payment for the book is somewhere around $180,000. She would like to give the studio the right to additional option periods of 3 months, but expects $75,000 per additional option period. She also wants a limit on the amount of extensions the studio can take, ideally she would like only one extension but she understands that two may be necessary for the studio to get the movie made.

The Famine Competition books have a very distinctive style and Fowling thinks she can ensure the vision she created and that the fans of the book have come to expect is successfully transferred to film. Because of this, Fowling would like to keep some measure of creative control. In her mind, this translates to being a consultant and producer with final approval on casting and the script. She would be willing to give up some of this control in order to receive additional compensation for awards the film might win, such as Golden Globes and Oscars. Another form of bonus compensation she's interested in is the industry standard bestseller bonus, where an author gets a set amount for every week the book being adapted stays on the bestseller lists. She would like this bonus to be based on the New York Times children's list and fiction list and for as long as her book remains in the top 20 of either of those lists, she would like $1,000 per week.

Can you help me negotiate deal?