Every see a contest that wants to pay you for writing a screenplay and say, "What's the catch?". If you thought that, then you have the right mindset for those contests for one reason. You know that nothing is ever just handed out in Hollywood.
Now sure, there are some contests that are legit and actually mean it when they say they want to work with you. There are others, however, that only want your story. These are the one's you have to be careful with.
I recently saw a contest pop up on my radar and I rarely give these things a 2nd look, but since I saw BET was involved, I decided to look into what the terms were. Sure enough, my instinct was correct the first time. It says they'll give you $55,000 for your screenplay if you win and will be made with a $1 Million budget. That sounds good, but think about it. A $55,000 one time payment for your story that could potentially be worth tons more and they want to buy it from you. That's not all. What about the right's to the screenplay? What about the trademarks? What about the revenue it's going to gain after it debuts? It doesn't say who get's what, so my guess is their lawyers are going to make you sign something that says, "We have paid you '$x' for this screenplay and after the initial filming, you no longer have any rights to this screenplay and is the sole property of 'insert company here'".
Sounds like a bad deal if you ask me. Especially if you think of all the money it will gain after the premiere and if it takes off as one of the networks most popular show. You may be able to say, "That's my story and I sold it to them." but after a while, who will believe you if these guys get all the money and you're stuck driving a 2001 Ford F-150?
Like I said before, there are some companies that do want to see you succeed in your screenplays, but be sure to keep a sharp eye on them and their conditions for the contest. You'll save yourself a ton of time and even more heartache.
-Adam