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View Full Version : What to do about this free-option "offer"?


flipper
03-04-2010, 03:59 AM
I write magazine articles for a living and a BIG L.A. agency recently expressed interest in an old story of mine for a client of theirs who was about to get a BIG production deal at a BIG studio.

This is what the agent proposed on behalf of his client: a 6-month free option with a 6-month renewal built in if they get a BIG attachment.

I do not have an agent.

So, what would you do? Believe me, no one else is interested in the article, so it's not like I'd be giving anything up by handing over a free option.

OTOH, maybe this is just an opening bid.

OTOH, I really doubt it is just an opening bid. And that being the case, I'm inclined NOT to give them anything for free, just based on principle and the notion that only real money on the table incentivizes anyone to get off their ass and do something.

Or I could tell them to go find an attachment, then come back to me, and that in the meantime I would give them right of first refusal should someone else express interest in the story (not likely! it's 15-20 yrs old!).

Or should I try to scare up some junior junior agent somewhere to do my thinking for me?

I dunno. Part of me just wants to tell these folks to take their no-money offer and go away. But maybe that's cutting off my nose to spite my, etc etc.

What would you do?

Thanks!!!!

jimjimgrande
03-04-2010, 07:08 AM
Since you don't know whether it's the client who's actually interested in your article or if the agent is just looking to package it on his own, I'd politely tell them you'd need to see money up front or they're welcome to come back when they have a specific element they're looking to attach.

The client probably has a bunch of other projects he's looking at and there's no reason for you to give away your material unless you know for sure that he/she is passionate about making something out of your article.

My attitude is always that if people with resources aren't willing to at least give up something, even a token amount, then they aren't all that committed to it in the first place.

You instincts I think are correct.

or... at least have the agent convince you that he's passionate about the idea and that he's committed to moving forward with it with his client, cause for all you know, yours is one of twelve in a buffet he'll put before the client.

and... there's no reason not to ask as many specific questions of the agent with regards to exactly what his plans are, what the client's interest level is, etc.

flipper
03-04-2010, 07:36 AM
Thanks. That makes good sense to me all the way around.

One thing the agent did say is that his client first read my story when it first came out way back when and filed it away in the back of his mind as something he'd really like to do one day. I have no reason to not believe this. (At one point early on, there was A LOT of heat surrounding the article; nothing came of it, though various elements of it were eventually ripped off and made into a movie that did okay at the B.O., but not to such a degree that it made me hire lawyers).

Anyway, I believe the client is passionate about the story. At the same time, I bet he's passionate about a lot of stories, and this would just be one of many in his pile ... unless I could get him to cough up some money, to ensure that it means a little bit more to him than all the rest.

Do you have a sense of what a reasonable $ level would be for something like this, on the low end, or how I might research it?

jimjimgrande
03-04-2010, 08:50 AM
I don't know what would be reasonable. If there's a way to find out what articles in the New Yorker and such sell for, that might be a starting point, but obviously yours isn't current, so that would factor in.

Just speculating here - it sounds like this client (probably a director?) is looking to have a few things to pitch to the studio when his deal closes. If that's the case, then the client basically doesn't want to be out of pocket in case the studio likes other ideas better.

If you want to PM me details, I might be able to help more, but it seems pretty simple - either you cut them some slack to help get the ball rolling or they need to pony up to show they really care.

I don't see any right or wrong here.

Ravenlocks
03-04-2010, 01:40 PM
Do you have a sense of what a reasonable $ level would be for something like this, on the low end, or how I might research it?
I'm not a pro screenwriter and haven't been in your situation, but here are my thoughts.

First, it may help to look at the Writers Guild of America schedule of minimums (http://www.wga.org/uploadedFiles/writers_resources/contracts/min2008.pdf) (PDF). The current schedule for features is on p.7, followed by some info on options on p.9. There may be more useful tidbits scattered around. Of course, non-WGA writers can't enforce most of these, but I'm not sure what the case is for optioning; you'd want to see how the document defines "professional writer."

Second, I'd suggest letting them name numbers first. Then you can negotiate from there.

sppeterson
03-04-2010, 01:55 PM
Try $750 for the first six months then $750 to renew for another six months.

Not a lot but enough so that they won't just goof around.

If all these places are pretty big then you want to get engaged with them, since that can lead to future opportunities.

Screenplay Savant
03-04-2010, 03:14 PM
I'm not a pro screenwriter and haven't been in your situation, but here are my thoughts.

First, it may help to look at the Writers Guild of America schedule of minimums (http://www.wga.org/uploadedFiles/writers_resources/contracts/min2008.pdf) (PDF). The current schedule for features is on p.7, followed by some info on options on p.9. There may be more useful tidbits scattered around. Of course, non-WGA writers can't enforce most of these, but I'm not sure what the case is for optioning; you'd want to see how the document defines "professional writer."

Second, I'd suggest letting them name numbers first. Then you can negotiate from there.

The Guild MBAs are for optioning screenplays written by guild members, not optioning literary properties for adaptation into screenplays.

Likewise, the feature schedules are for scripts not for the film rights to the source material that scripts are adapted from.

Screenplays and the film rights to other literary properties are two different beasts.

$ for optioning and purchasing the film rights to literary properties vary greatly. The option fee for an international bestseller can be higher than the purchase price for the rights to a far less successful book or short story or magazine article. Option agreements should always include the purchase terms whether it's a flat amount or a specified percentage of the production budget, or a piece of the back end (always make sure you get something substantial on the front end, as back end is always a huge risk with really long odds.)

Book agencies often have agents in-house or agreements with Hollywood agencies to handle film rights for books by their authors.

My advice is to get an entertainment attorney to represent you for the option and sale of the film rights to your article. Someone who would know the fair market value for the film rights to an article such as yours.

Good luck.

sc111
03-04-2010, 03:23 PM
I write magazine articles for a living and a BIG L.A. agency recently expressed interest in an old story of mine for a client of theirs who was about to get a BIG production deal at a BIG studio.

This is what the agent proposed on behalf of his client: a 6-month free option with a 6-month renewal built in if they get a BIG attachment.

I do not have an agent.

So, what would you do? Believe me, no one else is interested in the article, so it's not like I'd be giving anything up by handing over a free option.

OTOH, maybe this is just an opening bid.

OTOH, I really doubt it is just an opening bid. And that being the case, I'm inclined NOT to give them anything for free, just based on principle and the notion that only real money on the table incentivizes anyone to get off their ass and do something.

Or I could tell them to go find an attachment, then come back to me, and that in the meantime I would give them right of first refusal should someone else express interest in the story (not likely! it's 15-20 yrs old!).

Or should I try to scare up some junior junior agent somewhere to do my thinking for me?

I dunno. Part of me just wants to tell these folks to take their no-money offer and go away. But maybe that's cutting off my nose to spite my, etc etc.

What would you do?

Thanks!!!!

Free is not an opening bid, in my non-professional opinion. And everything written below is also my non-professional opinion.

If someone suddenly became interested in one of my shelved comedies, I might give a BIG agency a free option for a few months.

But your script is based on your source material -- your own article. I think that has more value -- considering the industry runs around looking for and buying rights to articles.

Secondly, I would not sign any contract without my own lawyer looking at it. Screenplay Savant is right -- get an entertainment lawyer, pronto.

mlongton
03-04-2010, 04:08 PM
If it were mine, I would not be worrying about the option price - that probably will get deducted from any purchase anyway. I would be concerned with the purchase terms. You can ask for a modest amount of option money but this is just to encourage them to take the project seriously. But it's what happens if and when they exercise the option that counts.

Ulysses
03-04-2010, 04:18 PM
Try $750 for the first six months then $750 to renew for another six months.

Not a lot but enough so that they won't just goof around.

If all these places are pretty big then you want to get engaged with them, since that can lead to future opportunities.

Or check out the track record of the people interested.

If it's good, I wouldn't worry about option money.

If it's not so good or nonexistent, a free option wouldn't make any sense.

What does this sound like to those who have been in the business for a while?

DavidK
03-05-2010, 02:08 AM
If it were mine, I would not be worrying about the option price - that probably will get deducted from any purchase anyway. I would be concerned with the purchase terms. You can ask for a modest amount of option money but this is just to encourage them to take the project seriously. But it's what happens if and when they exercise the option that counts.

Agreed. WGA schedule doesn't apply to this type of option. There's nothing to lose - judging by what you say about the original material - by allowing a free option for 6 months renewable. What really matters is your fee if the film rights are purchased.

In the end, it's easy: you need professional legal advice to ensure you have an option that is fair and protects your interests.

flipper
03-05-2010, 05:24 AM
sounds good. i'm going to give them what they ask for, i guess. as to the other more-important terms, this is what the agent said in his email: "We can negotiate the other terms in good faith."

What the heck does that mean? And is there such a thing as "good faith" in Hollywood? And how do I find someone to represent my interests?

Meanwhile, I've learned the clients in question are a duo and are heavy-hitter producers/writers/show-creators in TV, about to make the transition into movies, with their first flick in production right now.

Thanks again for any thoughts or suggestions you might have.

DavidK
03-06-2010, 02:22 AM
sounds good. i'm going to give them what they ask for, i guess. as to the other more-important terms, this is what the agent said in his email: "We can negotiate the other terms in good faith."

What the heck does that mean? And is there such a thing as "good faith" in Hollywood? And how do I find someone to represent my interests?


There is such a thing as negotiating in good faith, even in Hollywood. But you can't take it to the bank and you can't be sure that both parties have the same idea of what constitutes good faith. The other party, if they are good, should understand that you would prefer to negotiate the provisions of your option through a lawyer.

The Hollywood Representation Directory is useful. It's a case of making cold calls until you find someone who’ll help. When you hire an attorney, always discuss terms before committing so you know what your liabilities are. If hiring a lawyer is out of the question for financial reasons, try http://www.starvingartistslaw.com (http://www.starvingartistslaw.com/). Another resource is http://www.vlany.org/legalservices/vladirectory.php.

The duo may be sincere and trustworthy, but a verbal agreement is only worth the paper it's written on. Good luck.

BattleDolphinZero
03-06-2010, 09:45 AM
I can't see why the offer they made isn't fair. If it's a legit producer with a legit company, a free option for 6 months is okay, imo. If they get a meaningful attachment then you WANT them to take another 6 months.

I just optioned someone's life rights for free. I don't see the big deal.

The key is how real these people are. If they're known producers with credits and a studio deal, I say you take it.

gravitas
03-06-2010, 10:11 AM
sounds good. i'm going to give them what they ask for, i guess. as to the other more-important terms, this is what the agent said in his email: "We can negotiate the other terms in good faith."

What the heck does that mean? And is there such a thing as "good faith" in Hollywood? And how do I find someone to represent my interests?

Meanwhile, I've learned the clients in question are a duo and are heavy-hitter producers/writers/show-creators in TV, about to make the transition into movies, with their first flick in production right now.

Thanks again for any thoughts or suggestions you might have.

This actually bothers me though. Shouldn't you know what the terms are if they exercise the option? Any option agreement I've seen stipulates the terms upfront.

What if they want to give you 1% of the production budget and you were anticipating 2.5%? Or if there's a sequel, do you get a percentage of that? Do you get tickets to the premiere? All of these things theoretically should be agreed upon.

Anyway, maybe I'm over-thinking it. Good luck.

Screenplay Savant
03-06-2010, 10:37 AM
This actually bothers me though. Shouldn't you know what the terms are if they exercise the option? Any option agreement I've seen stipulates the terms upfront.

What if they want to give you 1% of the production budget and you were anticipating 2.5%? Or if there's a sequel, do you get a percentage of that? Do you get tickets to the premiere? All of these things theoretically should be agreed upon.

Anyway, maybe I'm over-thinking it. Good luck.

An option by definition is an option to purchase, so I don't see how you can give someone an option without agreeing to a purchase floor or percentage or something.

thatwritergirl
03-06-2010, 10:38 AM
There are both short and long form options. When I optioned a book of mine to a studio a few years back, we did the long form option and it took eight months to work out the actual contract. (Obviously we had a deal memo before that). So wanting to go long form at this point might queer the deal altogether.

When I worked at a teeny tiny production company years ago, we did very short form options, always with the good faith provision. As an attorney, I have seen lots of contracts with provisions for future good faith negotiations. the major terms are addressed, and then lesser terms are set out in the future. (Haven't practiced in a decade, but I doubt things have changed drastically).

Free options are not that unusual, but I agree they should put up at least something, and giving them 6 months to play is beneficial. If they do get interest, you end up in a great position, too. Now they REALLY need your article. And I think your right of first refusal idea is a great one.

Also, don't know if this applies to you, but you could possibly address the potential of you writing the screenplay.

All random potentially unhelpful thoughts!

But the absolute bottom line is a) get an attorney to review the contract, and b) read the contract yourself and make sure you understand the terms.

DavidK
03-06-2010, 07:05 PM
I can't see why the offer they made isn't fair. If it's a legit producer with a legit company, a free option for 6 months is okay, imo. If they get a meaningful attachment then you WANT them to take another 6 months.

I just optioned someone's life rights for free. I don't see the big deal.

The key is how real these people are. If they're known producers with credits and a studio deal, I say you take it.

The thing is, nobody can say whether the option is fair or not because the writer hasn't been told what the terms are should the option be exercised. There's nothing wrong with the option being free and you're right, it isn't a big deal. The only point I'm making is that in a world where one man's good deal can be another man's demise, it makes sense for the writer to know at least the basic terms of the option and to have that in writing.

If they're known producers with credits and a studio deal, I agree, take it, but those same people, if they are the sort of people who could be trusted to act in good faith, would perfectly understand if the writer wanted a simple option drawn up before making a commitment.

BattleDolphinZero
03-06-2010, 10:35 PM
The thing is, nobody can say whether the option is fair or not because the writer hasn't been told what the terms are should the option be exercised. There's nothing wrong with the option being free and you're right, it isn't a big deal. The only point I'm making is that in a world where one man's good deal can be another man's demise, it makes sense for the writer to know at least the basic terms of the option and to have that in writing.

If they're known producers with credits and a studio deal, I agree, take it, but those same people, if they are the sort of people who could be trusted to act in good faith, would perfectly understand if the writer wanted a simple option drawn up before making a commitment.

The producer doesn't offer the writer anything if the project gets set up. The writer negotiates for himself. That's why it's sweet because if something DOES happen, the writer suddenly has leverage.

The option only protects the producer. The option i just did wasn't to protect the person signing the option, it was to protect me. You don't want someone going out and sayhing "i got sudden interest in this project, wanna buy it out from under the people who are currently into it."?

DavidK
03-07-2010, 12:21 AM
That's why it's sweet because if something DOES happen, the writer suddenly has leverage.


I'm familiar with options but I see what your approach is and I agree.

CarolP
03-08-2010, 04:50 PM
sounds good. i'm going to give them what they ask for, i guess. as to the other more-important terms, this is what the agent said in his email: "We can negotiate the other terms in good faith."

What the heck does that mean? And is there such a thing as "good faith" in Hollywood? And how do I find someone to represent my interests?


"Good faith" is a defined legal term. You can read more here: http://legal-dictionary.thefreedictionary.com/good+faith and I'm sure many other places online. From an intellectual property standpoint (though I'm clearly no lawyer) the essential gist that will apply to you is that should you enter into an agreement with them they will offer you payment that is at minimum on par with the market value of your script.

And yes, it is expected that should the time come you will "negotiate in good faith" via your lawyer, agent etc..

I also wouldn't worry about what others are saying about knowing the terms of a purchase before signing an option agreement. The purchase contract is what he's saying you will negotiate in good faith should the situation arise. You will still be free to turn down their purcahse offer. An option is simply keeping you from selling it to anyone else, it doesn't mean you have to accept whatever offer they make you. Just read the contract they send over carefully, have a lawyer check it out and you should be fine.

If you're not happy with the free option, perhaps give them the 6 months free and then require them to pay a set amount for the 6 month extension.

Best of luck.

DavidK
03-08-2010, 07:22 PM
I also wouldn't worry about what others are saying about knowing the terms of a purchase before signing an option agreement. The purchase contract is what he's saying you will negotiate in good faith should the situation arise. You will still be free to turn down their purcahse offer. An option is simply keeping you from selling it to anyone else, it doesn't mean you have to accept whatever offer they make you.

A short form agreement can be that simple, but most options describe very specifically the terms of remuneration for the writer in the event that the option is exercised. But yes, that purchase arrangement is what the producer is saying would be negotiated in good faith.