It’s the moment every writer dreams about: You’re sitting in Starbucks pounding down your third Columbia Narino Supremo and tapping out your “final” draft of “Spam Wrestlers from Saturn” when your cell phone rings. (Okay, it chirps. Beeps. Plays the entire first movement of Beethoven’s Third. You get the idea…) It’s that producer over at Sony who asked to see your last spec, “Love Don’t Change a Thing.” She liked it. No, strike that; she loved it. She loved it so much that she wants to option it.
In a flash, everything in your world changes. The clouds part and the sun shines. The hum of traffic becomes an angelic choir. Your $4.50 cup of bean juice transforms into a glass of vintage champagne. You made it, baby. You broke through to the Big Time. You can finally pay off all those credit cards, buy that Z-car you’ve had your eye on and score season tickets to the Lakers. You’re gonna be rich! Rich-rich-rich!
(Insert SCREECHING BRAKES sound-effect here.)
Whoops. Reality check. The sky’s still cloudy, traffic still sucks and the closest you’re gonna get to seeing Kobe from the floor is through binoculars.
An option is not a sale. It’s not even the promise of a sale. But it is a necessary first step to making your Hollywood dreams come true, and it needs to be handled skillfully so you don’t suffer the ol ‘ screwgie later down the road.
First, a definition of terms. A screenplay option is a short-term agreement between a writer and a producer or production company in which said writer grants said producer/production company the right to shop (submit) said screenplay to various studios in the hopes of actually generating a purchasing offer. (In today’s Hollywood, big-time producers, as a rule, don’t actually buy screenplays. They merely rake screenplays to the larger companies that do. This is slightly different in the world of “independents” where a production company may have its own limited capital for equally limited screenplay purchases.)
Back in “the day” – say, prior to 1990 – most producers actually paid writers for the right to peddle their material to potential buyers. This “option price” was generally around ten percent of the projected purchase price and kept the script “off the market” for a specified period of time, usually six months to a year. The paid option gave the producer/production company the exclusive right to seek a buyer without fear of competition.
The rationale behind the paid option was simple: on one hand, producers want exclusivity. They can’t go around trying to set up a deal with a specific property when another producer is running around with the same script trying to do the same thing. On the other hand, a script that is taken all over town and rejected is essentially “burned” and unlikely to be taken seriously ever again. Since such rejection may not be based on the material, per se – potential buyers may gave simply not liked the producer personally and/or the talent “package” the producer had assembled – a paid option at least offers the writer some degree of compensation for his or her efforts.
About fifteen years ago, all of this changed when the pool of would-be screenwriters suddenly ballooned and producers realized that the balance of supply-and-demand was weighted heavily on their side. With so many writers screaming for attention, producers took the position that they were doing writers a favor by shopping their scripts to the studios and therefore demanded that they be given their options for free. (Hell, many writers would have paid producers to do it.) Under this new system, the writer gives the producer the exclusive rights to “shop” a script, and in return the producer invests the time and effort required to take it around town. Simple quid pro quo.
Today, the “free option” still rules.
Because no actual consideration is exchanged with a free option, it’s form and nature can vary from situation to situation. For example, if a producer is particularly tight with a specific studio – for example, if it’s a producer with offices on a studio lot – then the writer can authorize the producer to shop the script to only that one studio. If the studio says no, then all rights immediately revert to the writer and he or she is free to look elsewhere.
Likewise, you can restrict an interested producer to shop the script only to a certain group of studios, and nothing beyond that. With such an arrangement, you can actually have several producers shopping the same script simultaneously, as long as their “territories” don’t overlap. If two studios want the same script with different producers attached, mazel tov, you have a bidding war. (The one thing you want to avoid is two or more producers taking the same script to the same buyer. That’s when everybody looks like an idiot.)
What’s required to formalize a free option? Because no money is being exchanged or even promised, the agreement can be very simple. It can be a brief memo in which the terms of the option, including the time period agreed upon, are specified. Or it can be as simple as a handshake.
However, because a rejected script is still “burned” – some things never change – it’s important that you trust the producer you’re dealing with, and that the producer not violate the terms set forth in the agreement. If you agree that he’ll only shop the film to Universal and Paramount but then he takes it to a half dozen other potential buyers, you’re screwed. You don’t want that. So be careful.
Is representation required? It couldn’t hurt. If you have an agent or a manager, use him or her. It’s not going to cost you anything (yet), and such professional guidance can provide invaluable down the road. (Actually, if you have an agent or manager, he or she is probably the one who found and arranged the option deal in the first place.) But since no money is yet in play, it may not pay to engage the services of an entertainment lawyer just to write up a simple free option agreement or review the one given to you by a producer. Save the lawyer for later.
If you don’t have an agent yet, this can be a great time to get one. Agents, like sharks, get excited when they smell blood, and contacting an agency with a request for help in arranging an option – even a free one – for which you’ve already done the legwork can be a great “in.” How do you find such an agent? Ask the producer. Chances are, he or she can recommend several (and as long as it’s not his or her agent, there’s no reason to expect a conflict of interest).
Should you and your producer discuss a purchase price at this time? Sometimes ballpark figures are discussed, as well as general terms (right to first rewrite or sequel, etc,), but all of this goes out the window when a studio actually steps up on the plate and the war between the agents and Business Affairs begins. The best advice is to play it cool. Don’t even mention money yet. You could look too greedy – or your figure could actually be too low – so you might as well just leave the issue for the appropriate time and place.
The most important thing to remember when someone wants to option your material is to stay cool. Don’t rush and buy a new car or treat all your friends to filet mignon. Don’t tell your family that you just sold a screenplay (you haven’t yet) or even allow yourself to entertain all but the modest of hopes that you actually will. The sad fact is that most options don’t amount to anything. Scripts get shopped and dropped like sitcoms on the WB. Even with an A-list producer on your side, the odds are still against you.
But an option is still an essential step toward making a sale, and there’s a huge ego boost that comes from having a bona-fide producer validate your work. The trick is to recognize an option for what it is and treat it accordingly. Make sure you’re dealing with someone trustworthy. Make sure the terms of the option are understood by all parties involved. Get money if you can. And then sit back and watch the dice roll.
An option – even a free option – means you’re officially in the game. And who knows, this time around you just might hit the jackpot.
– Reprinted with permission of Fade In Magazine