What is the best method for optioning a script? I recently came across a script I’d like to develop, in hopes of pitching the project to production companies in L.A, and was wondering how this is actually done.
Do I offer the screenwriter monetary compensation for a one year’s option, with a second year option available if I want to keep working on developing the script? What happens after I option the screenplay? Can I make changes to the script?
–Arturo Tapia
Down To Earth Productions
Chicago, IL
Your assumptions are all correct. But for readers unfamiliar with options, a bit of explanation. From Dictionary.com:
option
The exclusive right, usually obtained for a fee, to buy or sell something within a specified time at a set price.
You often hear about options in terms of investments, but it means exactly the same thing in the film industry. When you option a script, a book, or some other piece of material, you’re making a deal that says basically:
- I’ll pay you X amount of dollars right now.
- In return, you promise that for a certain period of time (called the “option period”), you won’t sell this (script/book/whatever) to anyone else.
- At any point during this period, I can choose to buy all rights to the (script/book/whatever) for the pre-determined price of Y.
- At the end of the option period, I can elect to renew (or extend) the option for pre-determined amount of time, at a pre-determined price.
A sample option for a novel might be described like this: $5,000 for a two-year option, renewable twice at the same terms, with a buyout of $100,000. The details would be spelled out in full legalese in a contract known as an option agreement, signed by both the producer and the writer.
Why would a producer option a novel, rather than buy it outright? As you can see, it’s cheaper. In this case, for 1/20th the money, the producer has gotten the rights to the book he wanted. What’s different is that there’s a “ticking clock.” Unless he can get the movie set up within two years, he’ll have to pay another $5,000 to renew the option.
In Arturo’s case, he wants to option a script, then do some work on it — presumably with the original writer. That’s pretty common. Contracts would need to clarify who owns the new writing performed on the script in the event the option lapses. The most hard-core version might say that the producer owns any-and-all-revisions, while the more moderate version might allow the screenwriter to claim any work he or she did during the option period.
What if Arturo decides he needs to bring in another screenwriter for a rewrite? Well, unless he’s signed something stating otherwise, he can. He’s pretty much free to change anything he wants. That is, until the option lapses, and the original writer gets his original script back.
This is why a screenwriter needs to pay particular attention to the renewal clauses when signing option agreements. A one-year or two-year option with one chance to extend for a year should be adequate for most situations. You don’t want your script caught in an endless cycle of renewals with a producer who can’t get your movie made.