Q. On page 239 you mentioned that writers usually get 5% of the net profits, which is sometimes called “points”, and that points are practically never worth anything, which is why they’re sometimes dubbed monkey points. Can you tell me what you mean by points not being worth anything? Are you saying that most movies don’t make profit at the box office and therefore there’s not extra money to pay the writer this bonus? That most movies made break even at best?
If you get a Net Profits definition in your contract, it is generally formulated so that you will never see a cent. Basically the studio takes a big overhead percentage, and then a big distribution fee, out of the film's revenues, and then set the remaining money against the film's cost, plus the marketing cost. (In other words, thanks to the distribution fee, they get paid twice for marketing the picture.) Many movies that obviously made money for the studio have never gone into net profit.
Q. Then what can I do?
Get something better than a Net Profits definition. We generally ask for an Adjusted Gross, which means the producer recoups the cost of the movie, and then we're entitled to start seeing money.
It's all about what contract language you negotiate, which is a function of how much clout you have (how much they want you), and how clever your agent or lawyer is.
WGC members also get a "distribution royalty" as part of the IPA. I have no idea what it is, but it can add up to a very nice chunk of change if your movie gets some decent play.