Happy Sunday! I'm sitting at my computer desk sipping my tea, light streaming in through the windows, enjoying a little peace and solitude. It just feels like one of those days where it's great to be alive. It also feels like one of those days to share some helpful advice with up-and-coming filmmakers who might be trying to get their first script off the ground. I often get asked a lot about optioning material -- how it works, what to know, things to watch out for, how much and how long to option the material for, and so forth. To address all of those questions in a comprehensive manner, I wrote this little ditty below, which was first published last month at Funds for Writers. It also includes a link to an actual agreement template I use when optioning material. Check it out and hopefully it will give you some insights into the process. In the meantime, I'm just going to go back to enjoying this beautiful day :)
Optioning Your Screenplay to a Producer/ 2019-02-02
Congratulations! Not only did you finish writing your 120-page cinematic opus, but you have a motion picture producer interested in bringing it to the silver screen. You’re ready to sell. Ready to see your name on the back of a director’s chair. Ready to chow down on craft service while Jake Gyllenhaal and Rachel McAdams deliver your prose… But wait, not so fast. What’s this agreement the producer’s handed you? An option? He’s not buying it? What does this mean? Well, let’s break it down…
What is an option exactly?
An option agreement is an industry-standard document that interested producers give writers when they’re not quite ready to buy the script, but don’t want anyone else to buy it either. Maybe they don’t have enough money yet, aren’t sure they can get it made or don’t know what the budget will be (and the budget often determines the writer’s fee). An option simply gives the producer the exclusive right to purchase the material at any time during the term of the agreement. Here’s a sample option for reference: https://docs.google.com/document/d/1kpiuHbB6zUJhm1FDUq__4OrB6LeaJ25QnJvF2fM_Vrw/edit?usp=sharing
What do I need to have in place before optioning my script?
First, make sure the script has been registered with the Library of Congress’ Copyright Office. This is crucial for your protection and necessary for the producer to prove chain of title to the eventual studio or distributor that picks up the film. Information on copyright registration can be found here: https://www.copyright.gov/registration/performing-arts/index.html. For added protection, you can also register it with the WGA. Lastly, if the story is based on a real-life person, make sure you’ve acquired their life rights.
How long should the option term be?
Options can last however long you and the producer deem appropriate. Just remember that no one else can buy the script while that producer holds the option, so it may depend on your level of trust or how badly you want to work with him. One or two years is a fairly standard initial term, and it’s not unusual to have a one-year extended term triggered by the payment of an additional fee and written notice from the producer of his intention to renew.
How much money should I ask for?
Again, there’s no right or wrong answer here. Options can be as low as one dollar or as high as $10,000. As long as there’s consideration – something of value going from you to the producer and vice versa – the option is valid. The size of the fee will likely be based on the stature of the producer and how big the expected purchase price will be, but for a typical indie, $500 to $1,000 is common for the initial term. You might also negotiate a percentage (say 5-10%) of the expected purchase price. However, remember that the initial option fee is usually applied against the purchase price; so, if the producer pays a $2,000 option fee and the final purchase price is $20,000, he only owes another $18,000 to buy the script outright.
What other elements should be part of the option?
You certainly want the producer to lay out terms for exercising the option, including the purchase price, your writer’s credit, the notification procedure and exactly what rights he’s acquiring (just the film rights or also sequels, television, and other ancillaries). The compensation details are perhaps the most crucial though and should reference bonuses, backend participation and, if appropriate, fees for sequels, spin-offs and remakes. If the final purchase price can’t be determined yet because the budget is still undecided, ask for a percentage of the budget with a floor (i.e., 2% of the budget with a minimum of $20,000).
What are those short-form documents at the end?
The short form option and short form assignment are standard addendum to any option. The short form option, which states the deal between the parties in the simplest terms, is recorded with the copyright office by the producer so that outside parties know the material has been optioned. The short form assignment, also recorded with the copyright office, lets all parties know that the producer is the new owner of your material upon his exercising of the option. Proof that these documents have been recorded is also necessary for verifying the chain of title.