Shopping agreement vs. the $1 option...what is it?

[SS Minnow]

I'm new to the whole option game. Can someone give me a breakdown as to the different types of agreements one can reach with a producer?


Thanks,


SS Minnow

[BROUGHCUT]

A shopping agreement gives a producer the right to show the script to specific people/prodcos/studios, in exchange for a producing fee/credit (or something like it) if the project is bought as a consequence of the producer's introduction and put into production.

However, you have complete freedom to cut the producer out of the loop and negotiate the terms of the script sale directly with the production company the producer "shopped" the script to. A shopping agreement does not entitle the producer to intervene in the sale, or to act as a go-between between the writer and the buyer.

If the producer is a WGA signatory then you don't need to sign a formal contract for this agreement to be enforced and it can be granted for free.

From WGA.org Creative Rights For Writers:

Restrictions on Shopping Material

Screenwriters must take the initiative to impose limits on the circulation of their speculative material by companies to which they submit it. The writer may restrict, in writing, the extent to which a company may shop the writer's material to third parties. To enforce the shopping provisions, the MBA requires the company to pay to the writer, through the Guild, $750 for each party to whom the script was submitted in violation of this provision. (Article 49)

In television, the MBA restricts the circulation of speculative literary material unless the writer has consented. A company may not shop literary material which it has not optioned or acquired without first obtaining the written consent of the writer in a different document than the option or purchase contract. To enforce the television shopping provisions, the MBA requires the company to pay the writer, through the Guild, $750 for each party to whom the material was submitted in violation of these rules. (MBA, Article 49)

For both screen and television, if the company has optioned or acquired the literary material, it can freely submit the material to third parties unless the writer negotiates limits on such circulation in his or her individual contracts.

A $1 option is a legal contract that will grant the producer the right, but not the obligation, to buy the script on or before a given date at a *set price*. The price and the terms of the sale are agreed upon when the producer cuts you the cheque for a dollar. (Hardly relevant in the case of a $1 option, but this is why it's important not to let a tantalising upfront amount distract you from the business end of an option agreement, which is where you stand to get screwed the most.)

If a 'producer' offers you a $1 option you should be circumspect about agreeing to it. The most you should probably sign is a very limited shopping agreement, as such an offer would be unlikely to come from an experienced and successful producer.

[boski62]

options, as we've encountered them, are exclusive (you nor any one else can shop your script around during the option period) and broader in scope and more detailed in the terms and conditions they stipulate than shopping agreements: option amount/option period/renewal terms/purchase price (either explicit dollar amount or something along the lines of "an amount no less than WGA minimum for this type of production...")

The one shopping agreement we were offered was only about 3 pages long and one of the chief differences from the option was that it stated specifically the destinations the producers were intending to take the script: specific prodcos/individuals/studios where the producers had contacts. It was non-exclusive in that we were free to pursue other avenues of interest at the same time, as long we steered clear of the destinations specifically stated in the agreement.

We took the option for $$ and passed on the SA b/c we didn't like the idea of signing something binding without receiving some money in exchange... it worked out for us because the cash option offer came shortly after we passed on the SA.

But be aware that there's a whole menagerie of variations on the SA and option--it seems no two are exactly alike. That's why it's important to have a lawyer look them over for you--which raises one of the big problems with free (or $1) agreements and options...how do you pay the lawyer?

[certified instigator]

A producer or production company that pays a writer $1 to option a screenplay will do exactly $1's worth of work getting that script made.

Any producer that can't even afford $250 a month ($1,500 for six months) isn't going to be able to put together a decent deal.

[boski62]

I have to disagree with CI on the idea that the amount of upfront money a producer's willing to offer necessarily equates to the amount of effort they'll put in trying to get the project set up.

It certainly sounds logical, and I'm sure it often plays out exactly as CI describes, but our first experience working with a producer was a no-money deal, a verbal shopping agreement, and he did everything he promised in terms of getting the script read by execs at several TV networks. As unrepped writers at the time, that alone was a big hurdle to get over...and it led directly to landing an agent and getting our first cash option a little further down the road.

We're still grateful for that producer's initial interest and attempts to set-up the script. It was a no-money deal, but it helped us take a few important steps forward.