Turnaround is the term to describe a studio abandoned screenplay that can legally be picked up by another financier or movie studio, granted that the studio pays back the costs incurred by the first studio, plus interest. As only 1/12 of purchased scripts end up getting produced, it is important to get a turnaround clause if you take your screenplay to a studio. Many successful films have been picked up in turnaround after the first producing studio abandoned the project, some examples include Forrest Gump and ET.
What does it mean if a project goes into turnaround with 500,000 dollars against it?
If a project at a major studio goes into turnaround with $500,000 against it, the new purchasing entity must first repay the original studio for the funds spent developing the project, as well as interest. ET was bought by Universal in turnaround from Columbia. The film made so much money that Columbia made more money that year on interest on ET from the turnaround clause than on any of their own films.