The screen writer (June 1945-May 1946)

w Many writers think all participation deals are capital-gain ventures. This is by no means true. If the writer is paid outright in stock or percentage, any income derived from this is the same as salary, and is not capital-gain. However, if he is paid in cash, either on a flat deal or at his established salary, and invests this money in the stock of the company producing his picture, and thus risks his capital, then the tax picture is one of capital-gain. To arrive at a fair figure for both the producer and the writer in participation deals, we start with the two prime factors: the value of the writing and the cost of the picture. But there are other factors. If Leo McCarey were to say to you, "I've got Van Johnson and Ingrid Bergman signed for a show. Here's the story. I'll give you five percent of the picture to write the screenplay," that would be a very nice deal. But if Luke McGlook told you he had just signed a bevy of Little Theatre stars from Baton Rouge, La., and he wanted you to do the screenplay for five percent of the picture, then and there participation would lose its appeal. Another factor to be considered is what sort of a releasing deal your independent producer has made. When you have a piece of the picture, distribution assumes its true importance, for now it means thousands of dollars in or out of your pocket. So the writer who embarks in participation finds himself acquiring a little business acumen as regards this business of selling the customers some good shadows and sounds. He should estimate the box-office value of the stars in his picture. He must check up on the releasing deal. He must insist on a good director. He must evaluate the integrity and ability of the producer. He should know the budget for the picture. In other words the artist wants to know whether the picture is a good business venture. Imagine! Writers who have to add and multiply! To arrive, therefore, at a fair basic percentage deal, we have H