Theatrical contracts can be scary, but Playwrights (you!) need them to make sure that they are protected, compensated, and treated equitably during a production process. Contracts are meant to be a way for both a Producer and Writer to set expectations and get what they need: On the Producer’s side – the rights to produce your play, on the Playwrights’ side – compensation for granting those rights!
At the beginning of a production process, Playwrights will often be faced with contracts and manipulated to sign something they don’t fully understand. While some Playwrights have agents or lawyers to help them with their contracts, many don’t; and even with an agent or lawyer, you should be empowered to read your contract, ask educated questions, and understand what you are agreeing to. The contract should be fair according to industry standards, as well as personalized to address your individual needs.
Think of this article as an impromptu Contract Class, so that you can learn terms to look for, acceptable payment rates, and negotiation tips when navigating Playwright contracts. (And yes, there will be a quiz!)
How Are Playwrights Paid? (aka When Do You Actually Get the Money?)
Playwrights are usually paid as property owners, rather than employees. That means that you are paid for use of your work rather than for your time spent in a room. (Some playwrights are beginning to advocate that they be paid both for the use of their plays and for their time in rehearsal. A few companies have adopted this dual payment model–such as The Playwrights Realm, Baltimore Center Stage, and La Jolla Playhouse–but it is still unusual.)
The one exception to this is a development process, like a one-week workshop or reading – for that, Playwrights are usually paid an Honorarium (fancy word for a fee that isn’t a living wage) for their time spent working in the room while developing their play. Honorariums are usually paid on the first day of a reading or workshop process.
For Amateur Rights contracts, which refer to any production when the Producer is not paying actors (Schools or Community Theatres), Playwrights are usually paid a one-time Flat Licensing Fee for use of the play. Professional small theaters who are producing a show with less than 16 performances will sometimes pay a one-time Flat Licensing Fee as well. Ideally, the Flat Licensing Fee will be paid on full execution of agreement, when all parties have signed the contract–i.e. you should be getting this payment upfront before they produce your play.
In most Professional Rights contracts, where a play is running for 16 performances or more and paying actors, a Playwright is paid an Advance against Royalties. That means they get an advance payment due on full execution of the agreement (upfront!). An Advance Payment acts as a down payment towards what the Playwright will be paid in royalties, and like a down payment, it should always be non-returnable, i.e., if a pandemic hits and the theater cancels your production, you shouldn’t have to return that down payment.
Royalties are usually calculated as a percentage of the Gross Box Office Receipts, which is all revenue that the theater receives from ticket sales. This is often abbreviated as GBOR or GWBOR (Gross Weekly Box Office Receipts). If your royalties end up making more than the advance payment, you get that additional money as a royalty payment. If you don’t earn as much in royalties as the advance payment, you don't get any additional payment.
Royalties should range at 5%-10% of the Gross Box Office Receipts, with 5% being the minimum a Playwright should accept, and 10% being an amount to charge if the play has had some success, or the theater really wants it. Most play contracts will be in the 6-8% range. Often musicals with multiple people on the writing team can be negotiated to be a higher royalty to accommodate the division of royalties between multiple artists.
Royalties should ideally be paid within two weeks of the last performance of the Play, and no later than a month following the last performance of a Play.
Now that we’ve gotten all those terms out of the way, here’s an example of what this language could look like in the contract:
In consideration of the right to produce the play, Producer agrees to pay Playwright the following: A non-returnable advance payment of Five Thousand Dollars $5,000, due in advance against a royalty of 7% of the Gross Weekly Box Office receipts, (GWBOR) increasing to 8% post-recoupment. The aforesaid payment is a non-returnable advance against and recoupable from royalties payable to Playwright. Remaining royalties, accompanied by box office statements, are due within fourteen (14) days of the final public performance.
★ Review Question 1 (read to the end for the answer key!): If the Producer paid the Playwright a $5,000 advance against a 10% royalty, and made $150,000 in total ticket sales, how much money does the Producer have to pay the Playwright in royalties?
What Is a Fair Payment?
A Producer/Theater is offering to develop and/or produce your play–congratulations! So how do you know if they’re offering a fair price?
First things first: you should ask if this offer is “Most Favored Nations” with all other Playwrights produced in the same season for the same type of work. Most Favored Nations means that all Playwrights are given the same payment terms. If something is Most Favored Nations, it’s likely not negotiable and won’t be worth your effort to try to negotiate the fee (but you may be able to negotiate other terms like travel/housing–more on that later!). Alternatively, you can ask if this is the highest rate a Playwright is paid for this season.
The type of work a theater might offer you includes a Production, a Reading or Workshop, or a Commission, which is when a theater is paying a Playwright to write a play. Something might be Most Favored Nations with all the other plays in a reading series, but of course, it wouldn’t make sense to pay the same for a reading as for a full Production, so Most Favored Nations only applies for the same type of work!
Other things to consider:
★ Review Question 2: A Theater has said they are offering you a Most Favored Nations advance payment $3,000 against 5% royalty. Can you negotiate your royalty up?
What Do I Charge for My Work?
A Producer/Theater has reached out to you to produce your play, congratulations (again)! But they’ve asked you for your price, and you don’t know how much you should ask for. Here’s some information on how to come up with a Royalty Quote, the fee you ask a Producer to pay you for your work, for three different scenarios:
As suggested above, determine how many hours and days you’ll spend in rehearsal. Then set an hourly rate – Unfortunately, minimum wage is relatively standard (if that), but I’d estimate the cost of living in your city and let them talk you down. Always worth trying to get more money! In New York City, Living Wage is ~$25 per hour. If all else fails, charge no less than $100 per day for your time in the room. Additionally, you should charge $100 per performance for use of your work.
Flat Licensing Fee
If the Producer is a School, Community Theater, or small Professional Theater, you should charge a Flat Licensing Fee. Thinking about what to quote Producers for a Flat Licensing Fee for use of your work, consider how much they could make in ticket sales from the production. Ask the following questions:
NUMBER OF SEATS X TICKET PRICE = The Maximum Amount of Money a Producer Could Make in Ticket Sales In One Performance of the Play.
NUMBER OF SEATS x TICKET PRICE x NUMBER OF PERFORMANCES = The Maximum Amount of Money a Producer could make from ticket sales for the full run of the Play.
Now, when the Producer is paying as a one-time Flat Licensing Fee, you want to quote a high number because you won’t get any additional money if they sell well, so ideally your flat rate should be a high percentage of 10% of the producer’s total income in ticket sales. So, you would just divide that maximum by ten to get your royalty quote.
The Flat Rate formula for a per performance rate and Total rate is as follows:
If all this math scares you, know that as a rule, a Flat Fee is typically between $100 - $200 per performance. You should always charge a minimum of $100 per performance, even if the performance is free. If a Producer is not charging for tickets, or the formula yields an amount less than $100 per performance, charge the minimum amount of $100 x NUMBER OF PERFORMANCES.
You should also generally max out at $200 per performance, as more than that would not be competitive. So alternatively, if this formula nets out more than $200 per performance, charge the maximum amount of $200 x NUMBER OF PERFORMANCES.
Advance against Royalties
For your royalty percentage, think about how “in-demand” your play is. Has it already been produced and received well? Is it a first production? Are there any other offers? Remember, royalties’ range between 5-10% of Gross Box Office Receipts. If your Play is in demand and has multiple offers, you can charge 10%. If it’s a first production, you should charge on the lower end. Regardless, it’s always better to aim higher, and let Producers talk you down: therefore, I would suggest only quoting royalties between the increments of 7%-10%.
To quote an Advance Payment, ask the same questions as for a Flat Licensing Fee: Number of Seats? Average Ticket Price? Number of Performances?
When you’re making Royalties, if the show succeeds, you will share the wealth. Accordingly, you want to quote an Advance Payment that the Producer could reasonably make back but is more than you would make if the show sells badly. To quote an Advance Payment, I would suggest quoting half of what you could make i.e. using the Flat Rate Formula but instead of dividing by ten, multiply by your chosen royalty percentage (.07 to.10) and divide by 2.
This final formula to calculate for an Advance Payment Quote is NUMBER OF SEATS x TICKET PRICE x NUMBER OF PERFORMANCE x ROYALTY PERCENTAGE ÷ 2.
★ Review Question 3: If a school asks to produce your play, and they have 100 seats in their theater, are charging $5 per ticket, and running for 5 performances, how much should your Royalty Quote be?
What do Subsidiary Rights mean?
Subsidiary Rights are a fancy way of referring to all the ways you can exploit (this use of the word means “to make money on”) your play: i.e., future productions, movie adaptations, foreign translation performances, cast albums etc. When the words “Subsidiary Rights” are referenced in Playwright contracts, most often they’re used in reference to Producers wanting to get paid back for their investment.
If a major Non-Profit or Commercial Producer has produced a play, they can argue that they made such a contribution to the future life of the play that they deserve to get a percentage of the Playwright’s Net Income (“Net” being the amount of money you actually receive, after deductions like agent fees) on iterations of that play for a certain number of years. While some Non-Profit Theaters (Yale Rep, Lincoln Center, Contemporary American Theater Festival) no longer ask for a Subsidiary Rights percentage, this language is still in many theaters’ contracts.
Standard Subsidiary Rights percentages are as follows:
If a Producer is a smaller Regional Theater, is producing your play for less than 21 performances, and/or is a later Producer of the play, they probably haven’t earned a subsidiary right percentage, and you should never give more than 5% for five years to a small theater.
Some Producers, particularly non-profit Off-Broadway Theaters, have a minimum income threshold clause. This clause makes it so the Theater will only take this percentage after you as a Playwright have made a certain amount of money from a play after its first production.
For example, if a Producer has a minimum income threshold of $50,000, you do not owe them subsidiary rights until you have earned $50,000 worth of income off the play, and you will start paying subsidiary rights on the 50,001st dollar. These clauses are beneficial to Playwrights, as you will not have to give the original Producer money until your play has been successful and is covering your basic costs of living. It is always worthwhile to argue for a minimum income threshold.
If a Producer is a non-profit Regional Theater, they should include a clause saying that if a future non-profit also demands a percentage of the Playwright’s royalties, they will share that percentage. For example, if the first Regional Theater takes 5%, and the second Regional Theater also asks for 5%, they should both reduce their percentages to 2.5% so that you aren’t paying double.
An example of Subsidiary Rights language is below!
If the Play has run for at least 21 performances at the Theater, Producer shall be entitled to Five Percent of (5%) of One Hundred Percent (100%) of all income payable to the Playwright within five (5) years of the close of the Initial Production or any productions produced under the options contained herein, whichever is later, with respect to the sale, licensing, or other disposition of any of the Subsidiary Rights in the Play (as herein below defined) less agent’s commissions, not to exceed Ten Percent (10%) except with regard to amateur rights, when said commissions may be Twenty Percent (20%). For purposes of this Agreement, “Subsidiary Rights” include only the following rights in the Play not optioned or granted to the Producer hereunder: worldwide motion picture rights, and, in the United States, Canada, and United Kingdom, stock, amateur, and foreign language performances, show album recording, radio, television, video cassette, video disc, or other mechanical reproduction rights in the Play.
In the event a subsequent not for profit Theater produces the Play, which must include an official press opening and sixteen (16) performances, prior to a commercial run. and provided such not-for-profit Theater becomes entitled to a participation in Subsidiary Rights, Theater agrees to reduce its royalty share by up to 50 percent (50%), provided, that the second not for profit Theater will not receive more favorable terms than Theater. Theater shall not be entitled to participate in any of Playwright’s Subsidiary Rights proceeds if the disposition of such Subsidiary. Rights occurred prior to the Effective Date of this Agreement. Playwright certifies that there have been no other dispositions of the Play.
Producer hereby agrees to waive the payment due it under this Paragraph until such time as Playwright has received a gross total of Fifty Thousand Dollars ($50,000 USD) in income from these Subsidiary Rights sources.
★ Review Question 4: A Producer who produced your show from June 1st to June 30th, 2018. stipulated that they get 5% of Subsidiary Rights for 5 years, and a minimum income threshold of $10,000. It is June 5th, 2023, and you just had your first production since 2019. You made $7,000 in your initial production with the Original Producer and $5,000 in this production produced by different Theater. How much do you owe the first Producer?
What Are Other Considerations Besides Money?
When looking at a contract, try to think of key terms in a contract that will affect your personal experience, and the future of the play. Some of these terms include:
Property Rights – Does this contract say that you are the sole owner of your work, that no changes will be made without your permission, and that any approved changes made to the work in a rehearsal process become your sole property. All contracts, from a reading to full production, should include language saying that you own your Play. Avoid work-for-hire language, which grants ownership of your work to the Producer.
Approvals – Do you have approval over cast, director, and designers? Replacements of any of the above? You should always have approval or mutual approval over creatives on a new play process. Avoid “meaningful consultation,” as this is vague.
Travel/Housing – Is the Producer covering your travel and lodging from first rehearsal to opening, or the entire process for a reading or workshop? Does that travel cover a ride to the airport in both cities? Checked Baggage? Is the housing private, or are you sharing with other people? Ideally, you should always get travel and housing covered when not in your home city, with transportation to and from airports in both cities, and you shouldn’t have to share your housing with other people.
Your Billing – How does this contract specify that you will be credited? How prominently, and how does that prominence relate to other creatives’ prominence? Does the contract specify that no one will have more prominent billing than you? Will you have a bio in the program? The Playwright should always get top billing in font no less than 50% of the title of the play.
Producer’s Billing – Does the Producer want to be credited in the program for any future productions of the play? Do they want to be billed as a world or regional premiere? Often Producers doing a reading of a play will require you to make sure future Producers bill them for developing your play. i.e., “Developed with ‘X’ Theater Company.” This is standard, but you want to make sure the language is accurate. Additionally, some Theaters will want to bill a play as a World Premiere, and you want to make sure they’re big enough and doing enough performances (16+) to deserve that status.
Exclusivity – Is the Producer asking for “sole and exclusive” rights, i.e., do they want to be the only producers of the play? Is this restricted by location, i.e., they only have these rights in NYC? Does this right expire after they have a production? Does the contract give the Producer first right to produce your play after this workshop/reading/ production? How long do they have that right?
Be conscious of how long a Producer is asking to have the rights to a show, to make sure other Theaters/Producers are also able to produce it, and that this Producer isn’t holding your Play hostage! Ideally, for a full production, a Producer’s “exclusive” right to produce should expire following the last performance. Sometimes after a reading or production a contract will give a Producer the first right to Transfer or Produce the Play. In this case, there should be a date by which they need to decide whether to Produce the next iteration of the Play. When in doubt, you want to make sure any grant of rights to produce has a time limit, so that other Theaters can produce your work!
Indemnification – Does the Producer agree to compensate you for any possible legal claims or losses related to the Production, and hold you harmless for any wrongdoing on their part? Are they asking for you to compensate them and hold them harmless in court? Indemnification can seem like a scary legal term, but when in doubt, you want to make sure that the Producer indemnifies you and holds you harmless, especially if they ask that you indemnify them and hold them harmless. Basically, if they want to demand that you protect them in court etc., they should also agree to protect you.
★ Review Question 5: A Producer in Chicago asking to Produce a 4 performance, weekend run of your Play is asking for the sole and exclusive Worldwide Rights to the Play in perpetuity and to be billed as a World Premiere. Is this fair?
When Do I Need Help with a Contract?
There are advocates who can assist you with a contract, but, for the most part, they cost money.
Agents will charge 10% of your income on a professional contract and 20% on an amateur contract, and may attach an Agency Clause, which will require you to pay them those percentages in perpetuity on any income for that play, even if you change agents. Lawyers will sometimes also take 10% of the contract fee if this is to be a long-term relationship, or they might charge hourly–could cost you as much as $500 per hour.
If you are a member of the Dramatists Guild, you can contact their Department of Business Affairs and they will review your contract and give notes for “free.” (You pay dues to join the Dramatists Guild, so this is not 100% free either.) But they will only review once, and they will not negotiate on your behalf.
You want to make sure the money and time spent engaging an agent or lawyer is worth the peace of mind you get when you have an expert in the field stepping in for you. There are many reasons why it might be worth it:
But no matter what, even with an agent, lawyer, or the Dramatists Guild helping you, make sure you read your contract! If you aren’t reading what you’re agreeing to, you could end up paying out of pocket for travel and housing, owing money to Producers, and even signing away ownership of your work.
Graduation Time!
You made it through your Contracts Class! Congrats to you!
To recap: at the end of the day, a contract should be a fair deal between both sides. It should accommodate your needs and make you feel fairly treated. When in doubt, think about what you need in order to be set up for a positive process, whether it’s being paid equitably, being able to choose your collaborators, owning your work, or all of the above! Hashing these things out in the contract form can set you up to be treated the way you want to be treated and help to make your process, whether it is a first reading or a Broadway opening night, a positive experience.
★ Answer Key:
Bonnie Davis is an artist advocate and dramaturg based in New York City. She aims to use the platform of Bret Adams Artists Agency to improve conditions and access for theater artists and advocate for exciting, theatrical, and underrepresented work. At Bret Adams Ltd., she works for a range of brilliant artists, including Jesús I. Valles, Diane Exavier, Adil Mansoor, Roger Q. Mason, and Georgina Escobar. Before working at Bret Adams Limited, she held positions at The Public Theater, HERE Arts Center, Amas Musical Theatre, and Atlantic Theater Company.
