Offer to option my screenplay - any advice appreciated!

[mackinny]

Hi all,
My first post, and I sure would appreciate some guidance.
I have had an offer from a small production company to option my feature length screenplay. I've spoken to them, I like them, and thanks to a reasonable track record they have getting a few movies outinto distribution, I trust their ability to get mine out there.

The "but" in all this is the offer I've got on the table.

First some info about me: This is my first screenplay, I have no previous credits, and my honest objectives are only a) to see my script in film and b) use that as an entry for bigger and better things I have with other scripts in development.


That said I don't want to get bent over first time out. Here are the terms and my thoughts:


1) Movie budget in the $2-3M range
2)1 year option for $10 (yes ten dollars). I am in no doubt where I stand on this one, but my first timer's instinct tells me that asking for 10% of purhcase price would be too aggressive.
3) Purchase price of 1.25% to 3.25% of production budget. This is probably where I can use most help. The production company are telling
me that they can't commit to an actual % until they go through negotiations with the studio etc who will provide financing and that they will try to get as much as possible. This seems like BS to me. Try usually means will fail in my opinion but would appreciate the views of others. I don;t understand why a studio should impact my relationship with the producer and I;m nervous at having a range laid out in a contract.
4) Contingent compensation of 1.5% of net proceeds... this seems OK
although I've heard that this industry is very good at creative
accounting to avoid showing too many net proceeds.


That's it. I can't afford a lawyer, and I'm having a lot of problems balancing between being too greedy for a first timer and being a pushover. The script has done well in competitions and while it's not my best work, the production compay seems to like it a lot (they say, without backing that up with a decent contract!)


Has anyone had any similar experiences?


Thanks! Sandy Mackinny.

[Perks]

I have not had this experience, but HOLY CRAP! Good for you. You'll get great assistance from these people. Congrats on your success!

[scripter1]

I'm not that knowledgable about the business end of it.

The first thing you will be told by most people is to get a lawyer. An entertainment laywer.
If you are starting to get offers and things are going well for you then it may be time for some creative financing yourself and figure out a way to hire a lawyer.

Try going over to DoneDeal to the business forums and ask there.
Someone with more experiance should be able to give you some info.

Congrats on this, hope it works out, and lots of luck!

[Joe Calabrese]

I took a break from my vacation to answer this important question.

Congrats for getting some attention. Feels good doesn't it?

Contact the WGA and find out if that company is a guild signatory. If so, then they must pay you what the union dictates.

A dollar option is just plain stupid. Ten dollar option is ten times as such.

Not getting a lawyer is also not wise. It will cost you a few hundred for a lawyer to go over the contract. Their lawyers will always word things for their best interests, you need someone to do the same so there is balance.

Now. The first thing I would expect is that you will not, under any circumstances give them an option for less than what it will cost for your lawyer. If they can't commit to three to four hundred (a little extra to take yourself out to a nice dinner with someone special) then they are not serious about doing whatever it takes to get the project off the ground.

2nd. net points mean nothing. you will never see it, even from large studios or producers. use that to your advantage and say your willing to forego any net points for more up front cash and a producer's credit. (drop the credit in the next round of negotiations in favor of the upfront money.)

Now, as for the 2-3 mill budget and purchase price. at that budget I would say ok to 1.25%, but add a floor of 50K and no ceiling. That means even if the film goes to a budget of 2 million and they give you 1.25% you still get 50K and not 25 which the math would say. No ceiling because if the film has a budget of 20 million, you should and will get all your enititled to.

Another thing to consider is the rewrites and there will be some to do. If you are excepted to do them then you need the cash. Insist that your time is not free.

Again, get a laywer. Good luck. I'll be back on Sunday if you need more more explanation on anything I wrote.

[WritingFool]

JOE IS THEE MAN

[Chesher Cat]

I don't know where you are located but you should be able to get a good entertainment lawyer to look at the contract and negotiate on your behalf for 5% - yes, that means they'd start with 50 cents and no guarantee of anything else.

DO NOT ENTER INTO ANY AGREEMENT WITHOUT A LAWYER LOOKING AT IT. If you do, I guarantee you will regret it. I agree with what Joe said but would also add: even if the company is not guild signatory you should still ask for guild minimum in the contract. Check the wga website for a listing of current minimums. You also didn't mention anything about the terms of payment.

It's not such a big deal that they are offering so little on the option but you should definitely ask for a lot more on the second year option, which most producers ask for.

What sounds sketchy to me is they are talking about taking it to a studio - I don't know any studio that would make a 2-3 million dollar movie.

I'm pretty sure there are some books out there where you could find a boiler plate option contract to look at and see how it compares to yours but I still urge you to get a lawyer - and make sure he/she is an entertainment lawyer and has done this before.

You should also know that it is unlikely that your first optioned script will be made - for some reason it just happens that way. On the other hand it is great to be optioned - it adds cred. More people will want to read your other stuff because you are optioned - use that to further your career.

Hope that's helpful...congrats and good luck with it!

[cekoya]

Hello, welcome and congratulations on your first option deal.

First of all, I would ask one thing. Do you have an agent? If yes, your agent can deal with this matter for you if he / she is a good agent before reaching the Entertainment lawyer. If you don't have an agent, I would try to approach one and they will break the rules by taking you in straight away if you are a good prospect. If you are a WGA member also, check into the WGA scale. Certain producers have signed what's called the Writer's Guild's Minimum Basic Agreement (MBA) and can't offer you less than scales. In this case, it shows they haven't signed it and I wouldn't worry either as an option deal is relative to the good will of the producer (if you are not part of the WGA). A member can ask for 10% of the final price. So, if you are being paid $60.000 for the whole script, then you can ask for $6000 but realistically, you could be given $600 to $1000 if the producer is nice and wants to invest his money into you as producers usually live with other people's money, not theirs. And at the time they option your script, they still did not have the time to show it around, so they don't have the funds.

Good luck with it! Do the right choice and listen to your heart. If it feels wrong, ask for some assistance. I am sure they are many professionals who are ready to help you with this matter.

[NikeeGoddess]

scripter, i'm surprised at you. don't you have a link to Martell's Script Secrets on OPTIONS?! i know it exists b/c i read it several times but, i don't know where to find it.

the one thing i remember from his advice: the shorter the option the better. it forces them to work harder at working on the project. if they have a whole year then they can wait 6 months before they do anything. if they have 3 months then they must work on it right away. and $10 is a joke b/c it doesn't put them out and force them to work hard. they only lose $10. but you.... you lose the opportunity for an entire year to market your script elsewhere. you lose!
it's obvious that the have no money to pay you at the moment so you have the power to reduce the option time. with this small, independent group my best advice is to option $10 on a month to month basis (better yet - week to week). that forces them to work and you can pull out every 30 days.

[mackinny]

Thank you all - you've been very helpful and responsive.

To answer a couple of questions:

- I don't have an agent. I got an agent interested a while ago and they said they liked the script and wanted one "minor change" which would have resulted in a fundamental rewrite that I was unwilling to do.

- I'm not WGA and nor are the production company.

Any warning lights there?

I like the advice to use the option money to pay for the lawyer and have got a decent recommendation for a lawyer I have not called yet.

Thanks again!! SM

[scripter1]

I am sooooooo sorry.


Here is the link to the article.

http://www.scriptsecrets.net/tips/tip277.htm

Hope that helps you out a bit.

[JustinoXXV]

Entertainment lawyers typically charge on an hourly basis. Their rates are typically from $200 to $300 or so. However, they typically want to work for more than a few hours and especially if there's a lot to negotiate, you maybe be looking at a legal bill of $1,000 or more. With no guarantee a deal will be closed. $1,000 not to get a deal, or $1,000 to get a $10 option?

Tell them you have an agent, and that you need more money. If they seriously give you a real figure, then call an agent and ask them to negotiate. If the deal isn't closed the agent won't charge you. And by the way, agents don't bill you until they close a deal for you.

[Joe Calabrese]

Justin. That is not the best way to start a business relationship. If you tell the producers you have an agent, they will expect to talk to him/her asap. And going to an agent just to close a deal with a small noname prod co is not gonna get you an agent, even if it is a fast buck for them. Starting out a relationship on a lie will bite you on the butt. An I'm sorry, but I know of many entertainment lawyers who will review and fix a contract for under $300. Who ever you are using is ripping you off or is a Johhny Cochran "got to pay for my mansion on the Riviera" type. Option contract are very standard and doesn't need a slick high proced laywer, just one who is familiar with them (ie. an entertainment laywer.)

When I get back next week, I will (if others want it) talk about paying your dues and dealing with small fries. Like it or not, but you will have a few dollar options under your belt in your career, if you want to have one that is.

[JustinoXXV]

Justin. That is not the best way to start a business relationship. If you tell the producers you have an agent, they will expect to talk to him/her asap. And going to an agent just to close a deal with a small noname prod co is not gonna get you an agent, even if it is a fast buck for them. Starting out a relationship on a lie will bite you on the butt. An I'm sorry, but I know of many entertainment lawyers who will review and fix a contract for under $300. Who ever you are using is ripping you off or is a Johhny Cochran "got to pay for my mansion on the Riviera" type. Option contract are very standard and doesn't need a slick high proced laywer, just one who is familiar with them (ie. an entertainment laywer.)

When I get back next week, I will (if others want it) talk about paying your dues and dealing with small fries. Like it or not, but you will have a few dollar options under your belt in your career, if you want to have one that is.


Then if you're suggesting that this person on this thread use an entertainment lawyer, you should suggest those lawyers you know to him.

Entertainment lawyers (one's findable in any directory of entertainment lawyers) that I've contacted would only do deals under the terms I mentioned.

And by the way, not all screenwriters have had to do cheap options. Some break in with big deals. A lot depends on the writer, on circumstances, and on a number of factors.

As for the dollar options, I've met my share of screenwriters who got them and who never advanced beyond getting dollar options.

I remember the first so called offer that came my way, which I posted on this forum last year. I rejected it as you should remember. One year later, the guy who approached me with that stupid arrangement hasn't advanced from where he was last year. And of course there's the Wayne producer who was talked about on Done Deal a couple of months ago.

A lot of the time people are so eager to have what they believe is their first deal that they are automatically convinced that the producer is legit,and their enthusiasm affects everyone they tell the story to. If the producer can't produce a few thousand dollars (or even $1,000) for the option, how on EARTH are they going to be able to produce the money for the film?

The bottom line is that if all they are able to do is offer something like a ten dollar option (or not much more) then hiring an entertainment lawyer is going to cost you more money than you're getting in the option. You'll be out of money for something which isn't likely to materialize. These are the kinds of deals to walk away from.

And if an agent won't close a deal on a small prodco deal, it's because too little money is involved ($10). So if they can't offer any money, then why bother with representation at all? All the deal is doing is COSTING you, INSTEAD of getting you PAID. Isn't money supposed to flow to the writer?

[Joe Calabrese]

Did you even bother to read the first post I put on this thread?

[Boo_Radley]

A pal of mine in Chicago wrote a super-hero type script which was optioned by the Sci-Fi channel for a dollar. The last time I talked to him (which was a couple months ago) he still hadn't even received that one single dollar, and has been kept out of the loop.

I believe that as of now the rights have reverted back to him, but that's just one incident out of many I've heard the last couple years talking with other optioned and/or purchased screenwriters who didn't have a legal rep.

Joe's advice is the most consistently intelligent and informed of any I've seen since joining this site. I swear to God if I ever make a sale, I'm going to take him up on his previous sig and buy that dude a dinner, even if it just means mailing him a gift certificate for a "Number Three with a Coke" at McDonald's.
:hi:

[OneTeam OneDream]

Like it or not, but you will have a few dollar options under your belt in your career, if you want to have one that is.

A dollar option is just plain stupid.




So to have a career, you have to be stupid?

[Joe Calabrese]

We are stupid but for different reasons.

I'm sorry. I forget that not everyone knows the jargon.

Just as net points is refered to in the industry as Monkey points, a dollar option generally means anything offered far less than usual 10% of the final purchase price for a period of time between 6 and 18 months.

Just because they offer a dollar, or ten, doesn't mean you have no room to negotiate. If they are serious to commit and not just looking to pad their library, "Here at XYZ company, we have over fifty properties ready to go into preprouction," then they will budge.

I will continue with this discussion when I get back from vacation.

[WritingFool]

Dont give Joe a hard time...hes on vacation, remember!
Live it up Joe!

Drink a cold one for all of us

Wish I had some kewl little smiling insert now. Imagine little smile with a beer mug raised.
"CHEERS"

[Julie Worth]

Ten dollars! If I were them, I’d option a hundred scripts and eventually I’d find one that some money guy would back. So I lose $990 dollars. Look at the all the property I tied up!



Don’t do it. It’s Hollywood. You can’t trust anybody.



(But then, you can’t trust me either, because I’m an idiot.)

[GonnaBeFamous]

I agree with you(then again I don't know anything). If they aren't willing to pay me a substantial money upfront for an option I wouldn't have anything to do with them. They can stick it where the sun don't shine as far as I'm concerned.

[mackinny]

Some great advice here - thanks. I'll keep y'all posted so I'm not the only one who learns from this experience.

I like this forum!

[WritingFool]

Now, lets not forget what McKinny said at the start of his post. First screenplay. wants to get a notch in the belt, Small Prod Co, with a track record, he gets a good feeling about. BUT, doesnt want to get 'bent over'. well hmmmm...thats pretty much the gamble here isnt it.

Guess it would depend on two things to me, to determine which way I would go.

Are you truly attached to this script? Its your first, but for the right to say Ive been optioned, is it worth letting go? I couldnt my first one. My second script is going to be easier.

Second consideration would be, how passionatete are you about your writing?
Would an option notch, as the intangible, outweigh to you, any money you might get. I myself would want both, but unless youre really strapped for cash, Id take an option--WITH ALITTLE BETTER PAY-OFFF, then what youre being offered.

Short term option, with a nice counter offer, could be the simplest and most beneficial resolve for you, you think?
Best of both worlds.

Never settle for the first offer. Negotiating 101, first side who brings up an amount never really gets it.

Good luck.
Keep us apprised.

[mackinny]

WritingFool - your reminder of Negotiation 101 is very timely.

To your points, yes I'm slightly more in the camp that I want to get the notch rather than the money. Writing is a hobby for me, so the money is a nice bonus and I never expected that a) my first script would even get this far or b) if it did it would make much cash anyway. I honestly am looking at this as an entry for some better material I have backing it up.

I'm exploring the lawyer option, but based on advice here my gut says to go back to them with a low cost (although maybe not $10) 3-6 month option with subsequent periods at increasing amounts. I'll also look to a floor on the purchase price to protect myself from the range.

Thanks, Sandy

[Julie Worth]

Here's (http://www.writersstore.com/article.php?articles_id=450) a short article on the optioning of screenplays.

So, if the budget is only 2 million, and the purchase price is only 1.25%, that means $25,000. That’s the minimum. (The max would be $97,5000.) Then take 10% of that as your option payment for one year. That’s $2,500 for the minimum case, and $10,000 for the maximum.

[RustyVanReeves]

Some great advice here - thanks. I'll keep y'all posted so I'm not the only one who learns from this experience.

I like this forum!

Good luck with it, Sandy. :popcorn:

[JERETHAL]

They have to have a package broker. They have to have an Ex. Prod.

Make your play. Don't be easy. If they make films, they "know" money people. The package broker is the guy to watch out for because he gets everybody excited about your project. Screw an option. I'd never option. People without money want to option while they look for money. If they like it, they are hawkin it right now. The dam shame is that they just pick up a phone and make the circuit on the phone droppin loglines and short synops. If money likes what they hear, they say"Send me a treatment". Then you have to write one of them.
If you are easy, everybody expects writers to be easy. !0.00!!!! my God man!

[mackinny]

One further question y'all may be able advise on: re-writes.

The current contract I have includes provision for x "re-writes" and y "polishes", but doesn't define these terms or mention any payment.

Can anyone recommend a definition of a re-write versus a polish, and offer guidance on how to cost these in a contract (flat fee, per hour...?)

Thanks, SM

[NikeeGoddess]

unless you belong to the WGA then their are no standard* rules, only guidelines. check out their site for detailed information http://www.wga.org

*each contract is it's own. they don't pay by the hour for rewrites. they pay by the job.

there is no hard definition between rewrite and polish. but a rewrite usually involves major changes in story, scenes, characters, motivations, etc.... a polish is more like editing and dialogue fixing. there is a current thread about it right here. if you haven't checked it out then do so.

[Joe Calabrese]

I would just put in the contract something like:

Writer may be required to, and Producer may request NUMBER OF, usually 2 rewrites of said property, and NUMBER OF, usually 1 polishes (both as defined by the WGA).

WGA defines Polish as minor improvements of script details within the basic structure of the scenes as written, and shall not include changes in the structure, addition or deletion of characters, alterations of plot, or reworking of more than five percent (5%) of the dialogue.

Rewrite means writing which significantly changes the plot, story line,
dialogue, and/or the characters in a Script.

Even though you are not in the guild, your contract should use the guild's guidelines as much as possible.

As for payment, usually this is done in steps and each step (rewrite or polish) is paid 50% before starting a rewrite/polish and 50% after delivery of said rewrite/polish.

So let's say that hypothetically you got a 18 month option for ten percent of the final sale price of 100K. AND you are contracted to do rewrites and polishes before the sale is final (still under option), then I would negotiate for a separate fee of let's say 10K (deducible from the final purchase price) for that, in which 4k for each of the two rewrites and 2K for the one polish (all three for half up front and half upon delivery). If and when the option is finalized, you get 100K, minus the 10K for the rewrites and polishes and minus the 10K for the option. That's 80K. If the option lapses and not finalized, you get to keep the 20K from the option and rewrites.

Also, make sure you don't get screwed for the rewrites if you sell the script to someone else at a later date. Many times a producer can claim he has creative rights to the changes and can get his money (only for the rewrites, not the option) back but no credit. Best case scenario is for you to get everything back to your rights with nothing obliged to the producer, that is if the producer gave you notes for change. At the very least have a provision to revert the original (pre-rewrite) script back to you and just never incorporate any of those changes ever again.

[Joe Calabrese]

From the source.
I asked.



Mr. Calabrese:

2004 Writers Guild of America
Theatrical and Television Basic Agreement
("WGA MBA")

Article 1.B.7.

Theatrical definitions: "rewrite" and "polish"

7. The term "rewrite" means the writing of significant changes in plot, story line. or interrelationship of characters in a screenplay. "Polish," as used herein, means the writing of changes in dialogue, narration or action, but not including a rewrite.

*******************

Think of "polish" as cleaning up, tightening, putting into final form, making pretty, etc. When polishing you will not be making major structural changes.

Should you have any questions concerning this material, or require anything additional from this department, please do not hesitate to contact me.

Alexis DiVincenti
Contracts Administrator

Writers Guild of America, East, Inc.
555 West 57th Street, Sutie 1230
New York, NY 10022 USA

212-767-7803
212-582-1909 (fax)

[mackinny]

Thankyou thankyou thankyou.

NikeeGoddess I'll check for the discussions you mentioned.

Joe Calabrese you are priceless.