David Seltzer wrote the first draft for "Punchline" in 1979 after becoming fascinated by comedy clubs while looking for someone to play a psychiatrist on a television pilot that he was writing. He had a development deal with the movie division of ABC. Originally, the tone of the film was more good-natured a la "Fame" (1980) with more characters and less of an emphasis on Steven Gold. Bob Bookman, an executive, sponsored the script but left for Columbia Pictures. He bought the screenplay because Howard Zieff was interested in directing it. When Zieff lost interest (he ended up doing "Unfaithfully Yours" in 1984), the script was buried for years.