What does “optioned” mean in film?

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A producer got a hold of your script- maybe through a screenplay competition, your website, or your friend’s friend’s cousin, or dug it out of your recycle bin – who cares; whatever the vehicle of acquisition, the Producer wants to get your script made. He’s made his overture to woo you, and told you he’s confident he can shop the script, attract some A-list (okay, maybe D-list) talent, attach a director, and bring in investors to finance your film. Problem is, the Producer is a bit light on cash ATM and can’t outright purchase your script. Can you blame him? A purchase is too risky anyway – he has to first test the waters and needs a guarantee from YOU that he has exclusive rights to shop the script. So he says, “Buddy, I’m your biggest fan – I want to option your script. Whad’ya say?”

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So, what do you say? What’s the minimum rate you’re willing to accept for an option? Have you thought about the purchase price (which will be stipulated in an option agreement)? Do you know how many months/years you’re prepared to relinquish your script?

Eh? I have to relinquish my script in a screenplay option?

Yep. When you grant a producer a screenplay option, you’re giving them the exclusive right to shop the script with the plan to ultimately make your film. During the option period, the producer may at anytime choose to “exercise” the option. What does it mean when they exercise the option? It means they will buy your script for the agreed-to price in the option agreement.

“Let me get this straight,” you’re thinking… “I’ve been working my ass off trying to sell the script on my own with no luck, and here a Producer is going to take care of that grunt work or me? Nothing wrong with that, sign me up!”

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Hold your horses there Howdy Doody…

Is getting a screenplay optioned always a good idea?

Before getting all negative, a solid pat on your back is in order. You worked hard on your script, you created it from nothing – and here you have a third party actually interested in your screenplay. Congratulations! This is the best kind of accolades for a writer. But let’s think through this potential match made in heaven.

Who is this guy?

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Has this Producer actually produced any films? Keep in mind anyone can call themselves a producer – all a producer is, is someone with passion for a script and wants to lead the charge and try to make the film. A screenplay option is of course no guarantee (far from it) that your script will be produced. In fact, it means someone likes your script – but they don’t have the resources to produce the film, or outright purchase your property – yet…

Did you catch that? That word, “P” word?

That’s right, your script is as good as real estate. It’s something you built with your bare hands (okay.. Maybe finger pads)… But still. Your screenplay property has value. You invested your time, brainpower, ideas, blood, sweat, tears, on this property. And while this potential option deal could be great for your career – with the screenplay hopefully making the rounds and getting seen (which means your writing sample and name is getting out there).

However – because it’s an exclusive option, your potentially hot property will be shopped by one pair of hands only – the Producer’s. So it’s okay to be choosy when it comes to who you option your script to. Consider carefully how serious this producer is about your script and the likelihood of them getting it out there. This is crucial, because while your screenplay is under option with the Producer, you cannot have another producer shop the script around for you. You yourself are limited in who you can show it to, what contests you can submit the script to, etc. For the duration of the option period, your property is in essence “rented” – someone is living in it, and until this renter either purchases the screenplay or allows the screenplay option to lapse, your script is out of your hands. The screenplay property is off market and entirely up to the Producer at large. Here are some questions to ask the interested party, and yourself – before taking the next step forward:

How many films has the Producer produced?

If the Producer has no credits, it’s not necessarily a flat out “hit the highway, Bub.” The Producer may have financing resources or connections you don’t have. So ask if the producer has resources in mind he plans to take it to (and folks he can actually contact).

Is the Producer passionate about the project?

Does the Producer’s vision for your script align with your own? Ask questions such as who they see cast as the lead and which director would best fit the film. While this is mostly just for fun talk, it may give you a good indication as to the direction the Producer would take your script. Can you live with their take?
If you’re just not seeing eye to eye with the Producer, combined with them having a lack of resources, you can of course politely decline the screenplay option.

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Can I earn money with a screenplay option, and how much?

Yes. The script is your Intellectual Property, and as such has value. You hold the copyright and retain the rights. And that ain’t nothin! Think of the potential value of your screenplay asset. It may be the blueprint to a film, spawn sequels, video games, action figures, theme park rides… the potential value of your script is endless. That’s why a Producer may pay you real money for an opportunity to option your screenplay.

Of course, you’re not getting something for nothing. You’re trading your rights for the cash option. When you sign the option agreement, you are transferring your Intellectual Property rights to the Producer. The Producer then can retain exclusive rights to the Property for the duration of the option (and renewal if applicable). The addition of your script enriches the Producer’s portfolio, setting them up to be in a better position when meeting with financiers. Your script is just one more item they can shop around, another potential project that can attract talent and investors.

In a screenplay option, you’re giving up a lot to the Producer, and you should be justly compensated. Cash options differ, whether you are in the WGA or not and whether the financing party is a WGA signatory. In this post, we’ll address those who are not in the WGA.

If you’ve been offered a cash screenplay option, you not only must consider the price to option the script, but the purchase price of the script if the Producer chooses to exercise the option.

So, if the Producer offers you a cash option, what kind of fees should you expect?

There’s a range of course (which you and your lawyer can work out, based on the situation). A good option price to shoot for (the right for the Producer to take the script off market and have exclusivity to shop) is generally 10% of the purchase price. Even if the Producer never exercises the option (purchases the script), you will always keep this 10%.

The purchase price (the price the Producer agrees to pay if he exercises the option and purchases the script outright) is less the option fees (including the renewal fee, if applicable). For example, let’s say the script purchase price is 100K – the option price was 10K (10 % of the purchase price). When the Producer exercises the option, he will pay you 90K (less 10K option fee). He will own the rights to the script (you won’t), and you will be paid the purchase price when the film enters Principal Photography.

For low budgets, the script purchase price should be in the neighborhood of 2-3% of the film’s budget. Let’s say the film’s budget will be 100K (low budget!)- then your purchase price will be $3000. To protect yourself, you can do ceilings…. More on that in another post.

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Is a dollar option script or a “free” screenplay option worth it?

I’ve been offered dollar options many times. Sometimes I’ve accepted the deal, other times I declined. Every writer has their piece to say on this topic. The following are two arguments, pro and against.

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The “what have you got to lose?” argument is if your script is just sitting on the shelf collecting dust, then what difference does it make to you if a Producer shops it around for a period of time without you receiving compensation? You may be just starting out, or the script may not be the most promising script in your arsenal, or perhaps you simply want to give the Producer a shot. They may have a lot of contacts, or maybe you want to build a relationship with this Producer for future projects. You can always keep the option period short and see what progress develops, or you can negotiate for a wider breadth of rights and a higher purchase price or bonus to compensate for the free option you extended early on.

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The “put the money where their mouth is” argument is to never sell your script short. If the Producer was truly interested in your project, then they would pay you for your work, simply to prove to you that they are passionate about getting the film made. This argument is absolutely valid. Think about it: when you pay for something, you may give it more value and take it more seriously. If you get something or free, it somehow lowers the value of the product or service. So if a Producer paid you zero dollars (actually, they must always pay you minimum $1 to make the option agreement legal and binding), do you think they will push themselves to get the script produced as much as they would if they paid you $1000? Chances are, they’d work their ass off if they plunked $1000 for the option, right?

Of course, these two arguments have their good points – which is why I’m of the mind that either option may be suitable, depending on the situation. Weigh your options and goals – how long are you willing for your script to be solely in the Producer’s hands? Does the fit align with the current market climate? How badly do you want to work with the Producer? Think all the trade offs over and hopefully you will find your answer.

Length of screenplay options

Generally, a screenplay option will be from 6-12 months. Upon the end of the option period, the Producer will have a right to “extend” the option for an additional period of time for an additional fee. The extension period is up to you and your Producer, but is typically another 6 months.

Right of refusal and protecting your credit

Whether you sign up for a dollar option or a paid screenplay option, don’t budge on the right of refusal. Ensure you’ve covered yourself so that down the road, you are the first to be offered rewrites or polishes as they come up. Of course, you aren’t beholden to doing the rewrites, but it’s in your best interest to maintain that chain of title as the writer.

I rewrote the script based on the Producer’s notes; does the new draft revert to me when the option expires?

Chances are you will rewrite the script to the Producer’s notes, before they show it around. Depending on whether you negotiated these rewrites in the option contract, you may be paid for the rewrite or it may be a free rewrite. Either way, if you agree with the Producer’s notes, your efforts will not be considered a waste of time even if the option expires with no sale. The improvements you made to your script are yours to keep, and when the option expires, the rights for ALL DRAFTS of the screenplay revert back to you. The Producer has no rights over the script, even if they provided notes for you to rewrite.

What I meant to be a short blog is quickly busting at the seams. Believe it or not, we’re just scratching the surface on this getting a screenplay option stuff… there’s still much to go over in terms of the option agreement, and the important provisions you ought ensure are outlined therein. At the very minimum, hopefully this at least answers the question what does optioned mean in film.

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