As Will Ferrell’s longtime collaborator and a co-founder of Funny or Die, McKay has directed Ferrell’s one-person show, You’re Welcome, America as well as The Landlord short. In a previous life, McKay was a pioneering member of the Upright Citizens Brigade comedy club and served as Saturday Night Live’s head writer.

McKay takes a more serious tone as the screenplay writer and director of The Big Short, the film adaptation of Michael Lewis’s book about the 2008 financial crisis. While the subject matter might seem like a stretch for someone so strongly associated with "bro" humor, it is a fitting turn for McKay. Underneath the perception of a guy chasing cheap laughs lies a craftsman who agonizes over the finer points of storytelling, even distilling his film ideas into fairytale allegories to make sure they have the needed cornerstones of the narrative in place. (The jokes come later.) He has studied the masters, including a heavyweight Japanese and a Swedish director famous for their movies in the mid twentieth century.

McKay’s focus on proper fundamentals reaffirms that once you have the key anchors in place for a project, you can take it in any direction, whether that is a new format or a tale ripe with satire.  

We caught up with McKay who discussed how he adapted the The Big Short into a film, his idea-vetting process and why a ticking clock is ideal for putting ideas into action.

When you’re coming up with story ideas, how do you determine that they’ll warrant a film?

Sometimes as an exercise, I will tell the story of the movie to my youngest daughter, as a bedtime story. I will change some details to make it a fairytale allegory. For The Big Short, it might be that there was this old dirty box that three friends found behind a rich man’s castle and it turned out that every day they would lift up the box and there would be one piece of gold in it. In the end, the friends discover that the pieces of gold are coming from the families who live in the houses around the castle. What do you do when you find that out?

Are you looking for a certain reaction from your daughter, or trying to see if you can distill a long, complicated story into something simple and concise? 

I do it to see where the holes are, where the momentum is and to see if pieces don’t flow in a story. I think of it as zooming in on a map on a computer. I’m zooming into the story in its most raw form and making sure the weight-bearing beams, the six or seven storytelling points, are there. Because sometimes you can jump into an outline and later realize that you’re missing an entire piece of the story. If I can tell it as a five-minute story to a child, I at least have my basic building blocks.

What was your approach to adapting "The Big Short" into a screenplay?

The big thing that I tried to do was to capture the spirit I felt in the book. I read it in one night—I couldn’t put it down. Despite the fact that it is dealing with some pretty esoteric subject matters in the financial world and mortgage-backed securities, I found the characters and sense of jeopardy so engaging.

I looked at the movie as two stories. The first story was almost like a card counting movie, like 21, where you have the outsiders who can get over on the corrupt system. Then the second half being where they realize that the problem is much bigger than they thought and the world around them is in jeopardy.

Left to right: Christian Bale and Director Adam McKay on the set of The Big Short.
Photo by Jaap Buitendijk.

In the movie, you break through the fourth wall and have narrators occasionally talk directly to the audience to explain the financial lingo. How did you develop that technique in the writing process?

In the first draft—which is the draft where I always try anything because it’s just me and a computer screen—I tried a version where Morgan Freeman was in a banking ad from the early 90s and they were talking about trust, integrity, reliability, and Morgan Freeman stepped out of the ad and was like “that is a bunch of BS” and he starts telling you what really happens. That was my first pass. But then when I started working on the rest of the script, it felt like that might be too out there, too disjointed. So I came up with the idea of making Ryan Gosling’s character, banker Jared Venet, the narrator because he connects everyone in the real story. I like that Venet is from a big bank and that he’s slick, but still smart. He felt like the perfect guy to connect everyone.

Where did you develop your interest in storytelling?

That might go all the way back to when I was a little kid. I loved comic books, and I used to draw a lot. I was an English major in college and wrote short stories—I could be a bit of a pretentious young man, so I tried to write more serious stuff. I became interested in the mixture of art and storytelling and that led me to taking screenwriting classes. I remember binge-watching Akira Kurosawa movies. Or, if I had a day off, I’d grab a bunch of Ingmar Bergman movies. I wanted to watch everything.

Photo by Miller Mobley

How did comedy fit into this?

I have always enjoyed comedy—I grew up on Monty Python and Steve Martin. I did stand up comedy in college, but when I went to Chicago and started doing improvisation [at Second City], that is when the comedy combined with storytelling. I started to find my niche.

You were once the head writer for "Saturday Night Live." What did you learn about creating something on crazy-tight deadlines?

I can’t live without a deadline. When I set up a script with a studio, I might even make them give me an earlier deadline than is required. I’ll say how about this date and they will say I can give the draft to them later. I’ll say no, that’s our deadline. At SNL I knew that I had two days to write all of my scripts and a ticking clock is a friend to a writer.

What advice would you have for someone who wants to tell stories for a career?

Whatever you are doing, just do it as much as you can, even if you don’t have some official outlet. Even if you’re living in Alaska and only have a couple of friends, write your play and get together with your couple of friends and read it out loud. And, when you’re starting off, no job should be beneath you. Take what you can get your hands on to get the experience.

You and Will Ferrell have been longtime collaborators on sketches, films, and shows. Why do you two work so well together?

I don’t think we’ve ever had a creative argument. We both respect each other enough that, if one of us feels strongly about something, the other person will go, “Ok, I will go with you on this.” Neither one of us cares for needless drama. There is a lot of hard work to be done, but we’re not screaming about it. Yeah, sometimes we get stuck on something and we have to bear it out to make it work, but we try to stay focused. Basically, we’re trying to make each other laugh.