Film Option Agreements
You also need to think about ancillary rights. When you finish your film or series, what else do you plan to do with this project? You may want to develop a play or create amazing merchandise. You`ll at least want the freedom to develop spin-offs, including sequels and prequels. It is worth knowing this before contacting the rights holder so that you can justify what you are asking for. But why would a producer want to have the opportunity to buy the rights instead of buying them directly? Well, before buying the rights to a creative work, an option agreement gives the producer some time to get funding, develop the project, and determine if it`s something they want to pursue (i.e., if there`s a market for the material). It can also be beneficial for the owner, because if the buyer never exercises the option, the rights or ownership shares are never transferred. Once the option period expires, the owner has the option to make further offers and keep the option fee (usually 10% of the purchase price). Fees for movies will be higher than television, which ranges from $25,000 to $50,000. When the project becomes a series, payment is usually made per episode (Lucky You). Option fees are usually credited to the purchase price. However, the annual fee is usually not. The option provides for the provisions triggered by the purchase of the coin when the producer has pooled its investors and money. Sometimes a piece will be commissioned by a producing organization, and in this case, the author will not work “according to specification”, and the concept of an option will not arise.
The wording of the contract should clearly define the rights to which the option is made. Find the book or script you want to choose. If you try to select a book, you should receive a “resignation complaint” from the publisher confirming that they have no objection to your project. Ask a lawyer to verify the resignation request for you. If you`re trying to choose a script, the author may want to publish it as a book later. That`s fine – just inform your lawyer of the screenwriter`s plans, as the option agreement “reserves” these rights to the screenwriter. While the usual way to take control of the rights of the story is the option agreement, one trend among producers is to use a new legal vehicle to put an author`s creative rights on hold. Enter the phase on the right – the purchase contract.
Renewal fees are usually higher than the first option. The reason for this is demand. If there is interest in the project, the extension option will be used. In addition, extensions require an author to put the story on hold for another negotiated period. You`ve just published your first novel and you`re rightly excited. It won`t be a bestseller, but it`s available on Amazon and in some bookstores, and you`re already getting sales. Then someone calls you and tells you that they are an independent film producer and want to choose the film and TELEVISION rights to your book. Your pulse gets carried away as you imagine the first ones on the red carpet and the bags of money! But you have to put the brakes on. Before jumping, you need to take a close look at the producer and the proposal. Financially, the contract is considered a financial option and can be evaluated by applying an actual option analysis. [2] [3] [4] An option contract (whether for a life story or literary property) is an agreement in which the buyer (the producer) pays a small amount of money so that the buyer/producer can have the exclusive right to later acquire the film rights associated with the life story or literary property.
An option period can last from several months to several years. Typically, the producer negotiates an option for a period of six months to a year and pays the payment of the option to exclusively “link” the life story or literary property for that period. This means that the holder of these rights cannot transfer, sell or opt for an option to third parties during the option period. Payment for the option could range from a dollar to thousands of dollars. The producer may exercise the option by paying the purchase price of the life history or literary property in accordance with the option agreement. The purchase price can be based on a percentage of the budget (usually with a lower limit and an upper limit of the amounts the rights holder can receive). The purchase price may also include any combination of deferred fees (cash payments), conditional profit sharing (back-end), etc. If a script is the subject of an option, the agreement may require the owner to prepare paraphrases, polishes, etc., subject to the “notes” of the buyer/producer. Purchase price: The highest payment due to the owner if the buyer exercises the option (opts for the purchase).
The purchase price is a one-time payment to the original rights holder, which is likely to be part of the budget you are going to raise for the film. It is usually payable on the first day of the main shooting. The difficulty for you as a producer is that when you negotiate an option agreement, you don`t know how much you can pay to the rights holder. As a result, the purchase price is often expressed as a percentage of the final budget – often with an “upper limit” and a “lower limit” that ensure the author receives a certain amount, but no more than the agreed cap. This is often expressed as follows: “corresponds to []% of the budget, subject to the purchase price, which is a minimum of X and a maximum of Y”. Credit: If the production is not a guild or if ownership of the option.B is not a script (e.g., a book, unpublished manuscript, article, etc.), the loan is determined by negotiations between the parties. However, if the option is a syndicate member`s script produced by a guild signer, the loan will be regulated according to the rules of the WGA (Writer`s Guild of America). Guess what? The producer can refuse to return the rights, even if he has not obtained anything with it! Angry and desperate screenwriters sued the producers to get their rights back and failed. Keep in mind that the beauty of an option is that it gives the producer a limited period of time to try to get a production commitment and pay the purchase price, and if they fail, the option expires and no rights are transferred. So, how much money can a writer expect to receive from an option payment? The amount of an option payment can vary greatly. It`s really a negotiation process based on many factors, including the author`s background in the industry and the potential budget of the film. Producers will ask themselves a number of questions, such as: Is this the writer`s first script or has the writer already sold several scripts to the studios? What would be a fair option payment if the film`s budget was $1 million versus $50 million? How much can we reasonably afford to pay the writer? So if tomorrow the phone rings and someone wants to choose your script, it`s normal to be excited because now you know what to do.
Simply download the screenwriter contract template as an example of what to expect. Authors usually have to give up creative control once the work has been purchased. Hollywood sticks to its own writers (although it`s not uncommon for a writer to write the screenplay. Dream big). It is rare for an author to get final approval for the creative content of a film. Such creative control is left to the great authors of fish (again, dream big). Some contracts allow authors to view the adaptation process, but this is not typical either. One final thought: perhaps more than other film and television contracts, option contracts require a significant contribution from authors` agents who can give advice on what the “market” is for certain elements of the agreement with regard to the book in question, in particular those related to payment and credit. One of the first steps a producer takes in developing a project for the screen is to lock down the rights to the story. The usual legal vehicle for this is an option contract. The producer chooses the exclusive rights for a certain period of time in order to develop your creative work.
During this option period and before the producer commits to purchase the work, the producer will determine if there is any interest in adapting the work into a film. The option puts money in the author`s pocket in exchange for putting the book rights on hold for a negotiated period of time. .