To option or not to option your screenplay?
March 2, 2013 § 2 Comments
When a producer, executive or production company decides to offer you an “option” on your screenplay, they’re basically paying you a fixed amount of money upfront for the right to develop your project for a specific amount of time. You agree to take it off the market during this option period and not shop it anywhere else. During this time, the option holder can “execute the option” and buy all rights for an agreed amount thus own the project completely. If the option expires, the producer has an opportunity to renew it for a set price and for another set amount of time if you agree. If you didn’t enjoy the development process with the producer, the rights revert back to you and you’re free to walk away and consider better opportunities.
When it comes to options you really want to get paid something upfront and not give your project to a producer for free. Your script has value, not only as a viable project but as material that could secure you screenwriting assignment work. My advice is to shy away from any offers of a free option on your screenplay. The first tenet of Hollywood—nothing comes free in Hollywood. If a producer or production company offers you a free option, it shows you how serious they are about your script. A free option carries no risk for the producer, but spending money to option your material raises the stakes and puts their “skin in the game.” False praise for your screenplay to garner free work only hurts your image as a professional. Early on in my screenwriting journey, I was strung along with false praise and empty promises by producers to ensure that I’d take the bait and they could reel me in with more free drafts. After wasted time and dead ends, you learn the way the system works.
If you accept a free option it shows how much you value yourself and your talent. What is given for free must have no value, right? You want professionals in Hollywood to see you as the image you project. If you view yourself as a professional and act like one by not working for free, others will believe you as well. If it’s not right, don’t be afraid to walk away.
Option agreements can last for varying periods of time usually from six months to a year. It depends how much time producers feel they need to fully develop your script or secure financing. The two important numbers in the agreement are the option price and the purchase price of your script. The option price is usually ten percent of the purchase price. Don’t allow your excitement about someone’s interest in your script to get the best of you. Interest costs nothing and talk is cheap in Hollywood. Anyone can offer a free option and if you are a non-WGA, un-credited or un-produced writer, it might seem valuable to have a producer interested in developing your script. Of course if you’re a member of the WGA there are provisions and minimums in their basic agreement that will protect you. Otherwise you must negotiate the payment amounts yourself with your lawyer.
Always keep in mind that an exclusive free option takes your script off the market for a set amount of time and you can no longer shop it yourself. The risk you take is that you’ll miss other opportunities that may arise because your script is now tied up with just one producer. An option ties up exclusive rights to your project and is the reason you should be paid something. A free option has no risk to the producer only to you. If you’re offered a free option, counter with an amount that you feel is fair and equal to the risk of you taking your script off the market. The producer will always counter and probably cut the figure in half, so pad your offer accordingly as the negotiations will go back and forth until you both find common ground.
Hopefully you will find an agent or lawyer to negotiate your deal and they will know the marketplace and factor in your experience and the project’s value. If you do have credits or produced films, it will make it easier for your handler to convince a producer to pay something. Paying for an option will show just how serious the producer is about being in business with you.
If the offer of a free option stands and the producer will not budget—walk away from the deal. Free denotes amateur and you want to be perceived as a professional. Part of acting like a professional screenwriter, even if you have never been paid, involves your work ethic, your self-respect, and the decisions you make. If you go into the deal acting like a professional, it’s really the only thing you can control—your own actions.
Before you tie up your project, look at the producer or company’s credits and producing experience. Do they have credits or a proven track record of produced films? Do they have any of the financing in place? If they are new to the business, do they have solid contacts and are diligently moving forward with your project, or when you call three months later there’s no movement? Also look closely at your option deal with regards to the producer being able to bring in another writer to do the work. Try to make it a non-negotiable deal point that you will be the sole screenwriter on the project and if not, you’ll still receive shared credit and your production bonus if the film goes into production. Take everything into consideration before you lock your screenplay into an option agreement. You have the right and the duty to say “no” if the deal is not in your best interest.
A few years out of film school, I was circulating several projects and trying my best to navigate the choppy waters of Hollywood when I secured my first option. It was for my spec screenplay and the producer paid me upfront about enough for a nice trip to Vegas for the weekend. I finally had my first paid writing job and it felt good to finally be walking the steps of a professional. The option was for six-months with provisions to renew, but the producer showed me that he took my work as serious as I did by spending money to secure the rights. I also was the only screenwriter executing the producer’s notes on my project. Another important consideration when you option your screenplay.
Screenwriters don’t usually start by selling their first script for a million dollars. It usually takes years of continued success and hard work to reach a level where you can even command a quote for your work. And in these rough economic times, Hollywood’s business dealings with all talent has changed across the entire industry. Some heavyweight screenwriter’s quotes have dropped considerably and one A-lister’s reduced quote is another struggling writer’s dream. Many times your script will be optioned first rather than purchased outright by a producer or company. Be prepared for changes in the development process. Make sure you’re a team player during this period and do everything you can to help push the project closer to production. Be aware that if you’re doing the rewrites during this period it can end up being a long development process with many pitfalls that can kill the project.
When my first option expired the producer didn’t renew, but luckily another company optioned the script three times and eventually they produced it into a movie. Their good faith money and continued belief in my script made a huge difference to me in deciding to stick with them on the journey. It was a long road, but it eventually paid off with a produced and distributed film. It’s another example of the patience you must learn as a screenwriter and the professional manner you must constantly exude.
Make sure your option agreement states that you retain all rights to all versions of your script after the agreement expires. You don’t want the producer or company to still own their versions of your script they developed under the option agreement. If the contract expires and they did not execute the option to buy your script, you walk away free and unencumbered. Also if it’s a non-WGA covered agreement, make sure to secure your writing credit and what happens if they bring another writer during the option and you may have to share credit.
Nothing comes for free in Hollywood and your option shouldn’t either. Make them pay you something and you’ll be taken seriously as a professional. Each time you work for free you pay them with your most precious commodity—your time. A paid option makes you’re a working writer and you will need an entertainment lawyer, so find a good one and let them handle the pesky details of the deal. You stick to the screenwriting.
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