Preston Sturges and the first screenwriting royalty deal in Hollywood

It was Walter Wanger who got Preston Sturges into movies in the first place, hiring him off his Broadway success to "dialogue" some movies at Astoria in 1929. Sturges thought little of the work; there's no Pulitzer Prize for film, he'd say. He traveled to Universal in 1932, finding the usual vale of tears.
    Sturges shouldn't be lumped with the decade's angry, rebellious screenwriters; he was too droll and self-mocking for that (his autobiography is titled Between Flops), but still the studio system offended him—it was

so stupid, wasteful. "Four writers were considered the rock-bottom minimum required. Six writers, with the sixth member a woman to puff up the lighter parts, were considered ideal."
    It was also indifferent to his ambitions. Taking the system on, he began, in 1933, by doing something unorthodox—he wrote an original screenplay. Common now, screenplays done on spec, on the writer's own time, were seen, in the system's halcyon days, as a sign of weakness, something done as a calling card by a writer too young to snare a contract or the product of a failing writer desperate to hold on. Eleanor (Sturges, his wife at the time) had told Sturges the story of her father fighting his way to the top of the cereal trust, and he thought he might turn it into a movie. Because she'd told him the story out of order and over time, he decided to structure his screenplay the same way, starting at the end with a suicide and a funeral and flashing back over the life of his hero, seeing him through the eyes of different characters, his affairs, his mistakes, showing how an American success story could add up to a sour nothing in the end (a structure that clearly influenced Citizen Kane and one that neither Welles nor Mankiewicz ever acknowledged). He'd written a third of The Power and the Glory when he ran into Jesse Lasky's story editor at a party and mentioned what he was working on. Impressed, the editor set up a meeting with his boss. Lasky heard the story and was impressed as well, offering to buy it as a treatment, a summarized ten pages or so. Sturges balked—he was too far along on the real thing—but he offered instead to sell Lasky a complete screenplay, ready to shoot, when it was finished. Lasky was amused— Sturges was clearly new at this business. A month later he received

a complete screenplay of proper length, complete in every word of dialogue, the action of every scene blueprinted for the director, and including special instructions for the cameraman and all departments... I was astounded. It was the most perfect script I'd ever seen... I wouldn't let anyone touch a word of it.

Lasky wanted to—he held a three-hour meeting with his story department looking for something in the script they didn't like, but they could find nothing to change. This was unheard of, one writer accomplishing everything by himself. Lasky sent for Sturges, and they dickered. Here Sturges held an advantage over other screenwriters—he'd been a businessman of sorts, having managed his mother's cosmetics branch. He pointed out to Lasky that there was no Hollywood precedent for paying a large amount for an original screenplay and suggested he offer him a percentage of the gross instead.  Starting a new contract at Fox and desperate for material, Lasky couldn't let the script get away from him. In their final agreement Sturges got 3.5 percent of the first $500,000 of the gross, 5 percent of of the next $500,000, and 7% of anything over a million, plus a $17,500 advance, a screenwriting royalty deal, the first in Hollywood history.
                                                   Marc Norman, What Happens Next