This guide is meant to assist showrunners, new or seasoned, determine which elements of their production they need to address with the business affairs department at the studio or network they’re working with. Surprisingly often, the deals and cash flow arrangements that are the backbone of any television production remain hidden from the eyes of the person that needs the information the most, the showrunner.

What is Business Affairs? Business Affairs is the department within your studio/network that negotiates all of the deals that impact your show. Your contract, your actors’ contracts, your writers’ contracts, the licensing deal between a studio and network (if they’re not the same entity), the to any book/article/story you may be basing your show on, and the deals for all of your major creative collaborators. If there’s a deal that needs to be negotiated for your show, Business Affairs is making that deal.

These deals are sometimes intentionally kept from the showrunner, but in most cases showrunners don’t reach out to Business Affairs with the necessary questions. Every showrunner needs to establish communication between themselves and their studio/network’s Business Affairs department. This will build trust and transparency between Business Affairs and the showrunner and allow the showrunner to have access necessary to make proper decisions about their show’s budget and staffing.

Find out who is running point for Business Affairs on your show, give them a call, take them out to lunch, get to know them, and ask them about all of the below.

Business Affairs is negotiating your deal with your representatives (agents, lawyers, etc). You’re going to have a deal for your script and executive producer services and you need talk to your representatives about the deal terms that are being negotiated on your behalf. Feel comfortable asking them lots of questions. There are no stupid questions.

Are you locked to season 2 of your show if you season 1, or do they have the option to hire you for season 2 at their discretion?

Can your representatives carve out your ability to write and/or staff on other projects during the ? Development sometimes takes years, you need to be able to earn other income during a lengthy development process.

What is your back end (the number of points) you’ll receive if the show becomes profitable? This is usually referred to a (modified adjusted gross receipts). What is the of MAGR you are going to receive (how much does your back end get reduced to pay for others, for studio/network overhead and distribution)?

Do you control the MAGR pot of the back end for the creatives involved? The creator- showrunner will often control the total MAGR pot for creatives. The pot is the portion of the backend ownership available to the creative team that’s involved. The pot can be anywhere from 15%-40% ownership of the show. But actors often ask for back end, pilot directors receive back end, initial rightsholders (book authors, magazine article writers) negotiate for back end, the you’re working with receive back end. All of this will come out of the MAGR (profits) that you control. You need to be involved with your Business Affairs executive so you know what’s being negotiated out of your back end to get creative talent you want hired on your show. You need to know so you can decide what’s important to you. That actor the network wants is asking for 7.5% of the MAGR, it’s coming out of your back end, are you excited enough about the actor to give up that much of your back end?

Let’s say you find a project you like that has underlying rights. That will probably be the deal that gets made before you even start writing. You should ask your Business Affairs (BA) executive to walk through the rights deal with you. This will include things like how much the option price is, how long the option periods are for, how much the purchase price is, whether the rightsholder has any involvement in the series (creative input rights, casting approval, etc), and what on-screen credit they’ll receive – Executive Producer? ? Last but not least, the rightsholder will probably get a piece of your back end as described above. You should ask about the number of points and the definition of those points BA is negotiating to give the rightsholder. All of this impacts your deal and you need to know what’s being negotiated on your behalf.

Of course, the industry is undergoing dramatic changes in the streaming era, so while all deals still traditionally include a back end negotiation for MAGR, many deals are now deals. These are now popular at many of the streamers because the streamers are licensing worldwide rights and with the streamer controlling the rights to your show worldwide there are few avenues for generating profit beyond the sale to the streamer (in traditional deals additional money would come in from foreign sales, syndication, etc – none of which occur in worldwide distribution deals). A Cost-Plus deal is basically a deal where the streamer pays for the entire cost of the show (the cost part) with the Plus being a negotiated amount of money to compensate for the loss of possible future profits). The advantage for creatives in Cost Plus deals is that the “Plus” is paid when the show is delivered so you receive your MAGR percentage of the Plus quickly – instead of waiting (often for years) for profits to materialize under standard deals. The disadvantage is that you don’t have the opportunity for a big payday should the show become a huge hit and very profitable. You want to negotiate the highest episodic rate for yourself that you possibly can. Ask your representatives if any are applicable against your episodic rate. Ask if there is any overscale crediting of residuals. Use the following link to get a sense of where you stand financially: https://www.wga.org/members/career-advice/weekly-vs-episodic-pay

The next step in the dealmaking process will be making writer deals for opening up a writers’ room or mini-room and a deal for a casting director if you’re going right into casting. Let’s discuss staffing up your writers’ room. Make sure you talk to your BA exec about the various experience and credit levels of the writers you want to hire to make up your writers’ room. Ask your BA exec to keep you posted on how the negotiations are going at each step. Are you okay with another writer coming on and getting and Executive Producer credit? Are you the sole showrunner? Are you prepared to guarantee your writers any scripts? During the staffing of your writers’ room you need to be in constant contact with your BA exec. Are the fees weekly or episodic? How many weeks are these deals for? If the payments are episodic, how many weeks are the writers guaranteed? What are the spans for your writers? When can you start them and how many weeks do you have them for? What is their pay schedule? You should calendar those end dates and track them. Is any other writer getting back end? Is any other writer getting a logo credit? If you’re the showrunner and you have writers ending their work on the show, but the show is still in production, it’s better to get ahead of it and plan accordingly for keeping them on for additional weeks. You don’t want to be shooting an episode that one of your writers wrote towards the end of the season and their weeks are up and they’re gone if you can avoid it. Here’s a link to a great WGA resource for figuring out writer spans: https://www.wga.org/members/employment-resources/writers-deal-hub/span-guide-protecting-overscale-pay-for-tv-writer-producers

When casting your show, ask your BA exec to walk you through the cast hiring process at your studio/network. Ask them who gets to decide which actors to make test option deals with. Will that be you alone? You plus the head of the studio’s creative team? You plus the head of the studio’s casting department? You need to have input into the casting budget for your show; ask your casting director to provide you with a cast budget for you to review. You may have a series regular role that is relatively small in the pilot but that you envision expanding in future episodes and your budget doesn’t reflect the level of actor (and deal cost) that the part will require. You can help adjust the cast fees and episodic guarantees to what your scripts, outlines, and story arcs will need. Make sure your BA exec knows to get your permission first if they need to exceed the approved budgeted amount. If you have a big star, that’s likely going to cost more than what you have budgeted. You need to discuss this with your network/studio – will they be coming up with the additional cash to cover the star or expecting you to find money to cover the elsewhere in your existing budget? If you’re hiring a big star, they will likely want a shorter term than the standard 6-year deal, so make sure to discuss that with your BA exec so the deal doesn’t get blown – unless you’re prepared to have it blown.

What is the license fee for the show? If it’s not a cost-plus show, how much is the network contributing to each budget and how much is the studio contributing? Traditionally the license fee from a network was 70% for a set period of years (4, 6, etc) so the studio was kicking in 30%. While this is now more negotiable than ever between networks and studios, it’s still the best way to ascertain what your show’s episodic pattern budget is going to be – the amount of money you will have to spend per episode. You need this information. Ask your BA exec for it. It they’re not forthcoming, quit. Seriously. You’re being set up to fail.

If it is a Cost-Plus deal, ask your BA exec what your approved “Cost” budget is and what the “Plus” is per episode.

How many episodes per season are you guaranteed under the licensing deal? Eight? Ten? Twelve? Twenty-two? ? Does the include an , and if so, does it have any enhancement money? Please refer to our glossary for definitions of these terms that may be new to you.

What are the dates by which the network has to pick the show up to pilot? To Series? For another season? With the streamers, the period of time you’re waiting to hear if you are going to be picked up for another season can keep you in limbo (without income) for a long time. You need to know what you’re signing on to when you take the job.

When building your writers schedule, prep, production and post schedules, make sure to keep everyone apprised of your plans – including your BA exec. For example, at JWP, we make an effort to build in and budget for a between the completion of the pilot/first episode and episode two so we can make script changes and production changes based on what we’ve learned doing the pilot. We build in two to three weeks of hiatus, depending on what the budget can bear. This hiatus allows us to evaluate what is and isn’t working with casting, locations, crew, etc. As an example, Julianna Margulies’ character originally died at the end of the pilot of ER and because the producers, studio, and network were able to test the show with an audience before shooting the season, they were able to see that audiences connected deeply with her character (and the actress) and we changed the end of the pilot so that the character survived.

I hope this quick overview of pertinent issues to discuss with your Business Affairs executive proves useful. If you have any inquiries or thoughts, please feel free to reach out to me directly: alex.galbate@jwprods.com

For those of you prepared to take a deeper dive into Business Affairs issues we will be posting an “Advanced BA” section on this site soon.