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Juno Styles
10-30-2010, 10:41 PM
I've been reading through an option agreement a company wants me to sign and have highlighted several things I don't like. We're meeting in person tomorrow to discuss, but I'm not sure exactly what this particular clause means?

In the event that the “Property” is successfully “Sold” for distribution or production and the “Property” rights are returned unproduced after the agreed upon option has expired and an option for “turnaround” exists, the producer shall be given an additional ninety days to secure a “turnaround” deal.

Can anyone explain what this entitles them to? i don't really understand why they should have 90 days to "turnaround" anything if i have sold the property myself or with another company. I In my mind, if the option is over, and I have moved on, then they are out of the picture....am I crazy?

also what would you say to this:

If at the end of the option listed in this agreement, the “Owner” chooses not to exercise the option to extend or renew the agreement, the “Producer” can levy any documented outstanding “out of pocket” expenses that has been incurred on behalf of the Producer in his duty to secure financing or distribution. “Out of Pocket expenses” is defined as actual dollars spent on shipping, business related meals and entertainment, travel, phone, fax, and legal expenses. Documentation of these expenses will be available to the “Owner” upon request and will only become due upon any future financial exploitation of the above-mentioned “Property”. Although the “Producer” will not encumber the rights in any way, the “Owner” is responsible to settle any “Out of pocket expenses” using first monies in, the “Producer” will then release any and all financial claims based on these expenses.

This basically says I have to pay for all the out of pocket expenses they incur....is that typical??? my gut says it's a sucker move.

also by the way....this is a FREE OPTION. there is no money being offered to me upfront.

Rantanplan
10-30-2010, 11:00 PM
I'm no lawyer, but I see this as basically:

-if this guy gets people interested in your script, and the script gets optioned, even sold, but then nothing happens with it and the rights eventually come back to you, he would like to be legally entitled to first dibs at placing it somewhere else, sort of like a first look deal, based on the fact that he was able to attract interest in the property the first time around.

That said, it also seems to hinge upon whether an "option for “turnaround” exists", so is that something that was agreed upon originally?

It actually seems reasonable to me. Like if the guy puts a lot of work into it but it doesn't work out, he would like to have a shot at trying again, after investing so much time and energy into you and your script.

But again, please don't take my word for it :)

Hopefully someone here with more experience or legal background will weigh in, if not, try to find an attorney to give you some free advice. Or not free, depending on the stakes / what you can afford.

Juno Styles
10-30-2010, 11:06 PM
I'm no lawyer, but I see this as basically:

-if this guy gets people interested in your script, and the script gets optioned, even sold, but then nothing happens with it and the rights eventually come back to you, he would like to be legally entitled to first dibs at placing it somewhere else, sort of like a first look deal, based on the fact that he was able to attract interest in the property the first time around.

That said, it also seems to hinge upon whether an "option for “turnaround” exists", so is that something that was agreed upon originally?

It actually seems reasonable to me. Like if the guy puts a lot of work into it but it doesn't work out, he would like to have a shot at trying again, after investing so much time and energy into you and your script.

But again, please don't take my word for it :)

Hopefully someone here with more experience or legal background will weigh in, if not, try to find an attorney to give you some free advice. Or not free, depending on the stakes / what you can afford.

yea there's no mention of a turnaround agreement or no other mention of that in the contract. if you are correct and it just means he gets 90 days to get another crack at it then that is reasonable, but what if he gets a deal and i don't like it? do u think i will have to take his deal just off the fact that we had an initial agreement?

Ronaldinho
10-31-2010, 05:42 PM
I am not a lawyer. This could be wrong. This is how I would understand these clauses, and what I think about them.

If the project gets setup during the option, than the producer is attached. His point is that if the project goes into turnaround, even if the time on the option has expired, he has 90 days to set it up somewhere else, while still attached as a producer, even if the original option period has expired.

This strikes me as reasonable. I would assume (danger: I am not a lawyer) that this only applies if the project is set up while under option, which means that it doesn't have anything to do with you setting it up on your own elsewhere. WHile it's under option, it's the two of you.

The second is trickier, and (danger: I am not a laywer) looks to me like a deal-killer. If the producer commissions any rewrites from you, for example, it's normal for you to have to reimburse him those expenses in order to have the right to those rewrites. You own the original script, he owns the rewrites. In practice, when the project is set up somewhere else, the producer is usually offered a small chunk of change against his expenses, and it's essentially "go away" money: you're buying his cooperation, not to rattle and legal sabers about how maybe you're using some of the stuff he owns.

However, this isn't something that happens when the option lapses. It's something happens when you set the script up at another company, and it's a negotiation between those two companies. It sounds like this is part of the "first monies in" situation - he's not expecting you to pay it when the option lapses, but rather when the script gets set up somewhere else.

That being said, I think (warning: I'm not a laywer) is drawing this WAY too broadly. One could read that clause as saying that you owe him the rent he pays for his office. If he flies to New York for vacation, but takes a meeting while he's there about your project (or, heck, even has lunch with an exec there, where they mention your project) can he charge you for his plane tickets?

Given that this is a free option, it strikes me (warning: I'm not a lawyer) that this is completely absurd. Even if it were a paid option, I wouldn't like this one bit and would probably find it to be a deal-killer. With a free option? No. He's responsible for his own expenses related to selling the script.

That being said, as with all option agreements, you can not afford not to have a lawyer here.

LIMAMA
10-31-2010, 06:21 PM
This "free" option doesn't sound very free. Danger, Will Robinson, Danger.

Juno Styles
10-31-2010, 07:04 PM
thanks ronaldinho for your interpretations, it sounds reasonable. it sounds like the contract is setup to give the producer complete control, there's even some other verbiage that's fishy that i havent posted because it's obvious its not in my best interest. they really like the script, but the contract sucks and i wont be signing it if it doesnt get revised.

Ronaldinho
10-31-2010, 07:29 PM
One important thing - and part of the reason you need a lawyer, in particular one with a background in entertainment law - to remember is not to take anything they do at this stage personally.

This is part of the reason you need somebody handling this for you. It's easy to look at lots of this stuff as indicative of a certain lack of integrity. But in the culture of Hollywood, a certain amount of gamesmanship in contracts is standard practice.

It'd be nice if that wasn't the case. And it can he hard to ignore when you're doing your own contract work. But you really really need a lawyer.

Pasquali56
11-01-2010, 08:07 AM
I would definitely stay away. I just went through a nightmare with a free option. Even though the option expired two years ago, I let the producer keep trying to set it up, because he kept telling me he was getting close to securing his financing. Finally, I decided to sever the relationship and take it out on my own. I found an agent at a really good agency who wants to represent it. But the agent said he wants to see a signed release from this producer saying that he's no longer involved/attached in anyway to the project. He said any buyer would want to make sure that there's no one out there who would make any claims. So I asked the producer -- and he turned me down. He said he feels entitled to "consideration" for all he's done. Of course, that's ridiculous. He never gave me any "consideration" for three years. I wrote this screenplay long ago and put countless hours into rewrites -- not just for this producer, but for another one before him (who didn't claim any consideration when that option expired). Yet the fact remains that this producer refused to let go -- and the agent will not take it on without the release. Yes, I could go to an attorney and try to force the issue, but frankly I'm not willing to spend thousands to do so. If there was a buyer at hand, maybe. But certainly not at this point. Bottom line: this producer who I gave a free option to is now killing my prospects of selling the script to someone else. Lesson learned: never accept another free option. If they're not willing to pony up with some bucks up front, they can't be that serious -- and they're usually not real players in Hollywood.

vstm10
11-01-2010, 10:07 AM
Yes, an option is not a good thing, unless is offered by a big heavyweigh -- in that case you would sign it even if for a dollar.

But you have a solution: offer him a shopping agreement. Waaaay better.

This site has a sample in the front page. Counter those guys with that.

And you'll keep all your rights.

Juno Styles
11-01-2010, 10:27 AM
Yes, an option is not a good thing, unless is offered by a big heavyweigh -- in that case you would sign it even if for a dollar.

But you have a solution: offer him a shopping agreement. Waaaay better.

This site has a sample in the front page. Counter those guys with that.

And you'll keep all your rights.

Wow I've never heard of a shopping agreement, ill have to search for that. I thought you just revise the option agreement until it becomes what you can agree on.

LIMAMA
11-02-2010, 08:27 AM
I would definitely stay away. I just went through a nightmare with a free option. Even though the option expired two years ago, I let the producer keep trying to set it up, because he kept telling me he was getting close to securing his financing. Finally, I decided to sever the relationship and take it out on my own. I found an agent at a really good agency who wants to represent it. But the agent said he wants to see a signed release from this producer saying that he's no longer involved/attached in anyway to the project. He said any buyer would want to make sure that there's no one out there who would make any claims. So I asked the producer -- and he turned me down. He said he feels entitled to "consideration" for all he's done. Of course, that's ridiculous. He never gave me any "consideration" for three years. I wrote this screenplay long ago and put countless hours into rewrites -- not just for this producer, but for another one before him (who didn't claim any consideration when that option expired). Yet the fact remains that this producer refused to let go -- and the agent will not take it on without the release. Yes, I could go to an attorney and try to force the issue, but frankly I'm not willing to spend thousands to do so. If there was a buyer at hand, maybe. But certainly not at this point. Bottom line: this producer who I gave a free option to is now killing my prospects of selling the script to someone else. Lesson learned: never accept another free option. If they're not willing to pony up with some bucks up front, they can't be that serious -- and they're usually not real players in Hollywood.

The agent is just trying to CHA, but the reality is this producer has no hold on the script. Unless there is some kind of monetary exchange, there is no viable contract. This is what I would do if I were you: find a cheap lawyer through an arts council (I know some have been previously mentioned on this board) and have the attorney send a sternly worded letter to this bozo informing him he has no legal leg to stand on.

Rantanplan
11-02-2010, 09:27 AM
For some reason I didn't see the second part of your post when I first responded, Juno.

So re. the option: one thing I never understood about options is exactly just how easy or difficult it is to get out of them. Hypothetically, if a producer options a property and then spends a lot of money pitching it, attaching talent etc., only to have the writer say NAH when the renewal comes up, I can see how that would suck for the producer. Then again, a writer should never have to have his material hijacked just because some schmuck bought a few cups of coffee to a starlet to try to pitch the project.

So absolutely have an attorney look over it, but also, be very up-front and communicative with the producer about all your questions and concerns. If you're dealing with someone you can really talk to, someone who will check in with you periodically to update you on progress and basically keep you in the loop, I think that will make the whole process easier and hopefully decrease the odds of nasty surprises down the road.

vstm10
11-02-2010, 10:03 AM
I would definitely stay away. I just went through a nightmare with a free option. Even though the option expired two years ago, I let the producer keep trying to set it up, because he kept telling me he was getting close to securing his financing. Finally, I decided to sever the relationship and take it out on my own. I found an agent at a really good agency who wants to represent it. But the agent said he wants to see a signed release from this producer saying that he's no longer involved/attached in anyway to the project. He said any buyer would want to make sure that there's no one out there who would make any claims. So I asked the producer -- and he turned me down. He said he feels entitled to "consideration" for all he's done. Of course, that's ridiculous. He never gave me any "consideration" for three years. I wrote this screenplay long ago and put countless hours into rewrites -- not just for this producer, but for another one before him (who didn't claim any consideration when that option expired). Yet the fact remains that this producer refused to let go -- and the agent will not take it on without the release. Yes, I could go to an attorney and try to force the issue, but frankly I'm not willing to spend thousands to do so. If there was a buyer at hand, maybe. But certainly not at this point. Bottom line: this producer who I gave a free option to is now killing my prospects of selling the script to someone else. Lesson learned: never accept another free option. If they're not willing to pony up with some bucks up front, they can't be that serious -- and they're usually not real players in Hollywood.


Funny. Some time ago I gave you the below advice about your one dollar option:

Pasquali, please don't take this lightly. It's not as simple as you may think.

Your chain of title may be clouded now and unless there was specific language that the property has been fully reverted back to you, you may have a problem.

Did he ever give you the 1 dollar?

If he never did, you may have the chance to make that contract null and void.

and you kind of dismissed me.

I guess now you see what I meant.

Get a lawyer to draft an email or letter for you. If he never gave you the dollar you may be OK.

Juno -- did you check out the shopping agreement? It's the best relationship.

My attorney has drafted multiple NON-EXCLUSIVE agreements for me for different parties that wanted to option my script, so now I'm not married to anybody and still own my property.

Pasquali56
11-02-2010, 10:15 AM
I never dismissed you. This is a completely different option/producer. Unfortunately, I've been incredibly naive in accepting too many one dollar or free options. Never again.

Write-Away
11-02-2010, 10:32 AM
So re. the option: one thing I never understood about options is exactly just how easy or difficult it is to get out of them. Hypothetically, if a producer options a property and then spends a lot of money pitching it, attaching talent etc., only to have the writer say NAH when the renewal comes up, I can see how that would suck for the producer. Then again, a writer should never have to have his material hijacked just because some schmuck bought a few cups of coffee to a starlet to try to pitch the project.

Usually when an option expires, there's an option to renew for another year. But it's the prerogative of the producer, not the writer to say yea or nay. It's in the language of the original agreement that the producer has a right to renew the option at such and such cost. You get out of the option when the date expires (the option to renew doesn't go on forever). Simple as that. There may be some hard feelings but if you don't think the producers have done enough to move the project forward over the course of the option period then it's the writer's right to walk away and there should be no legal ramifications.

These free options are a mess. I agree with others who say always get a lawyer to check out every option agreement before signing. So agreeing to a free option would actually cost you money to pay for a lawyer. I also feel like anyone asking for a free option isn't serious about getting the project made and grossly undervalues the writer from the get-go. Not a great place to start in my opinion.

vstm10
11-02-2010, 11:05 AM
You get out of the option when the date expires (the option to renew doesn't go on forever). Simple as that. There may be some hard feelings but if you don't think the producers have done enough to move the project forward over the course of the option period then it's the writer's right to walk away and there should be no legal ramifications.

No. No. No. NO.

I don't know how many times I have to repeat this: It's not as simple as that.

Unless there is specific language to the contrary, you have clouded your chain of title.

And that's why that agent is worried.

Write-Away
11-02-2010, 11:32 AM
No. No. No. NO.

I don't know how many times I have to repeat this: It's not as simple as that.

Unless there is specific language to the contrary, you have clouded your chain of title.

And that's why that agent is worried.

Interesting. I've had two extensive option agreements reviewed and adjusted by a lawyer at a top Beverly Hills law firm and I never heard this term "chain of title". And my agent has not been worried about going out with either project to new producers now that the options have expired. Good to learn something new though. I'm only drawing from my own experience and certainly don't pretend to be an expert on the subject.

catcon
11-02-2010, 11:41 AM
...and I never heard this term "chain of title"...

:eek:

vstm10
11-02-2010, 11:52 AM
Interesting. I've had two extensive option agreements reviewed and adjusted by a lawyer at a top Beverly Hills law firm and I never heard this term "chain of title". And my agent has not been worried about going out with either project to new producers now that the options have expired. Good to learn something new though. I'm only drawing from my own experience and certainly don't pretend to be an expert on the subject.


maybe your attorney put in the language that the rights were going to be reverted to you?

But don't take my word for it, take Terry Rossio's:




" it *didn't matter* if the option somewhere else had expired. Even with expired options on a property, due to fear of lawsuits, the chain of title was said to be 'clouded', and deals where the options had expired still needed to be re-negotiated for a pay off and agreement. Thus, many times, a $50,000 option payment to the writer creates a future $500,000 liability on the project.

What happens is, invariably, any material that's optioned gets changed -- or at least there is the perception that it has. Maybe a new draft, maybe just notes, doesn't matter. So, the new home for the project won't touch a project that has had a previous home, even just under option, because they fear having to work around that material ... the option is for the original material, not the subsequent changes. You can tell them all you want you're going back to the early draft, but the lawyers just shake their heads, and demand releases from all the previous option holders.

This has happened on every project I've been involved with, and my lawyers tell me every studio does it.

So I say still: options are not options. They don't expire. Any entity which options the property you will have to, at some point, deal with again in the future; they essentially co-own the property, and can kill your ability to set up the project elsewhere.

This is not even going into language of the option itself, which can include 'changed elements' clauses and other such booby-traps.

But, believe it or not, there are producers who feel that if they've taken a meeting on a project, and offered notes, or made just one phone call or even just use the screenplay as a doorstop, they're 'attached' now and forever.

They might not do anything for you at all, in terms of effort on the project, but a year later, you set the project up somewhere, and right away they show up on the phone, ready to talk about their deal."

Write-Away
11-02-2010, 12:23 PM
Thanks VSTM. Very interesting post.

SoCalScribe
11-02-2010, 01:16 PM
I would definitely stay away. I just went through a nightmare with a free option. Even though the option expired two years ago, I let the producer keep trying to set it up, because he kept telling me he was getting close to securing his financing. Finally, I decided to sever the relationship and take it out on my own. I found an agent at a really good agency who wants to represent it. But the agent said he wants to see a signed release from this producer saying that he's no longer involved/attached in anyway to the project. He said any buyer would want to make sure that there's no one out there who would make any claims. So I asked the producer -- and he turned me down. He said he feels entitled to "consideration" for all he's done. Of course, that's ridiculous. He never gave me any "consideration" for three years. I wrote this screenplay long ago and put countless hours into rewrites -- not just for this producer, but for another one before him (who didn't claim any consideration when that option expired). Yet the fact remains that this producer refused to let go -- and the agent will not take it on without the release. Yes, I could go to an attorney and try to force the issue, but frankly I'm not willing to spend thousands to do so. If there was a buyer at hand, maybe. But certainly not at this point. Bottom line: this producer who I gave a free option to is now killing my prospects of selling the script to someone else. Lesson learned: never accept another free option. If they're not willing to pony up with some bucks up front, they can't be that serious -- and they're usually not real players in Hollywood.

If this producer's option has expired and he no longer holds the rights to the project, he can't hold up your sale (or representation) of the project... the rights have reverted back to you. The only thing he DOES legitimately have a claim to are any changes/rewrites that he asked you to make. He could claim that those changes are at least partially his property, or that the writing was done as a work-for-hire by you at his direction, in which case someone purchasing the script would indeed seek a quitclaim from the producer to satisfy the chain of title... and the producer could potentially hold that up.

There is another solution to hiring a lawyer and fighting this producer, though; go back to an earlier version of the script that predates his involvement. Depending on the amount of work you did for this producer, this could mean a dramatically different script... but assuming the changes are negligible and/or the agent likes the premise and potential of the script, you could give him the earlier draft with no obligation to the producer. Unless the "free option" contract you signed has language that specifically prohibits it or assigns intellectual property rights, the producer can't lay claim any right or consideration for your work product prior to his involvement (as long as you don't use that material developed with him).

It's not an ideal solution, I know... but it is a way to cut out the producer and satisfy the agent (and any potential buyers) that the property has a clear chain of title and no pre-existing obligations to anyone else. :)

Juno Styles
11-02-2010, 03:59 PM
Juno -- did you check out the shopping agreement? It's the best relationship.

My attorney has drafted multiple NON-EXCLUSIVE agreements for me for different parties that wanted to option my script, so now I'm not married to anybody and still own my property.

yes, thanks for the advice, i just found it today and will be reading over it to see if it's more or less the same as the revised option i had a legal person draft up for me based on their option and the things i don't want to sign off on. so far, it looks pretty much the same. i think i will give this to my legal person to see which is better. i like that it's very clear and straight to the point. i think i'd like a clause in there that states they have no right to shop the material after the agreed upon time limit.

i'm wondering whats stopping the producer from saying at the end of each term period "Yea, I know it expires next week, but i'm in the middle of talks with such and such studio that's interested, we've been playing phone tag for a week and they're really busy, so you're going to have to extend it" just to buy more time.

vstm10
11-02-2010, 04:40 PM
Actually, my attorney didn't draft a shopping agreement but a non-exclusive financial agreement.

This party looks for financing and IF they find it, they are attached as executive producer. If they don't, they have no claim whatsoever. I am still the owner of the property in both cases.

vstm10
11-02-2010, 04:41 PM
i'm wondering whats stopping the producer from saying at the end of each term period "Yea, I know it expires next week, but i'm in the middle of talks with such and such studio that's interested, we've been playing phone tag for a week and they're really busy, so you're going to have to extend it" just to buy more time.

they have to prove it.

SoCalScribe
11-02-2010, 05:12 PM
i'm wondering whats stopping the producer from saying at the end of each term period "Yea, I know it expires next week, but i'm in the middle of talks with such and such studio that's interested, we've been playing phone tag for a week and they're really busy, so you're going to have to extend it" just to buy more time.

Nothing stops them from saying that... but if they're coming to you to ask for an extension, you're the one with the power to say yes or no. You have to use your best judgment and decide whether it's a legitimate assertion, or if you think they're stringing you along.

Deals take a long time and sometimes it really is the truth that they're "real close" to making a deal for months and months... but there are also plenty of times where they're just trying to get something for nothing. Make no mistake, though... in the absence of a guaranteed extension in the option agreement, they have to get you to sign an amendment to extend their option or broaden their powers beyond the extent of the original agreement. If you don't believe them, don't agree to extend the option.

:)

polfilmblog
11-05-2010, 09:23 PM
"This basically says I have to pay for all the out of pocket expenses they incur....is that typical??? my gut says it's a sucker move.

also by the way....this is a FREE OPTION. there is no money being offered to me upfront."

Ask them if they need one of your kidneys too.

(I know what I'd tell them, but children may be listening).

nuvuefilms
11-05-2010, 10:02 PM
The out-of-pocket expenses are the tell that it's a sham. They've actually figured out a way to make money of you. Run fast.

Here's what they're really saying "Give me your script for free so I can rack up bogus expenses and bill you for it when the option expires... oh yeah, but if you sell it later down the road, we want more money."

catcon
11-06-2010, 07:20 AM
The out-of-pocket expenses are the tell that it's a sham. They've actually figured out a way to make money of you. Run fast.

Here's what they're really saying "Give me your script for free so I can rack up bogus expenses and bill you for it when the option expires... oh yeah, but if you sell it later down the road, we want more money."

Doesn't stop them from trying. Here's a quote I received from an entertainment attorney re: submission:

"My arrangement is relatively simple: 10% (reducible to 5% if you have an agent or manager), and $35 per submission, plus costs."

Obviously, I didn't give him the job. But they have a slick website, are long-time veterans in the industry, and are listed all over the place including, I see, in DDPro's db of lawyers.

Juno Styles
11-07-2010, 12:11 AM
so i met with this group today and they were surprised that i highlighted everything i had a concern about but were particularly in disagreement with this clause i stated at the start of this post:

If at the end of the option listed in this agreement, the “Owner” chooses not to exercise the option to extend or renew the agreement, the “Producer” can levy any documented outstanding “out of pocket” expenses that has been incurred on behalf of the Producer in his duty to secure financing or distribution. “Out of Pocket expenses” is defined as actual dollars spent on shipping, business related meals and entertainment, travel, phone, fax, and legal expenses. Documentation of these expenses will be available to the “Owner” upon request and will only become due upon any future financial exploitation of the above-mentioned “Property”. Although the “Producer” will not encumber the rights in any way, the “Owner” is responsible to settle any “Out of pocket expenses” using first monies in, the “Producer” will then release any and all financial claims based on these expenses.

from their perspective they feel as though if the option expires without them being able to sell it then that is fine and i dont owe them anything, BUT if i sell it later down the line that i owe them...... however they kept saying "whoever you sell it to will pay the expenses not you but it will be up to you to let them know our expenses will need to be paid from the previous attempt to try and sell it"....we went back and forth about this for a half hour and neither of us would budge because they feel as though they've lost money and if i'm selling it then they should be reimbursed.

i know this group legitimately does have contacts to studios for a fact. doesnt change the way i feel about the clause. basically i would have baggage attached to my project (their expenses) no matter who buys the script and if they dont pay it then I have to pay it. i know this group personally and they are just starting out so i dont think their intentions are to scam me BUT i have enough common sense to know when something's not in my benefit. i've also had a lawyer glance at the contract (for free) and he basically said everything i highlighted in the contract was right on point.

bottom line is, i'm not signing off on any of the things i dont like, hate to be a tight a$$ about it, but i am willing to walk away from the deal. if there's any suggestions you have that can help me convince them that this is NOT the norm then that would be helpful. they are really convinced this is normal practice to be reimbursed if the project gets picked up with another studio or even if i find independent investors on my own to make the film.

**edit** - also can anybody explain what most management or producers do as far as their expenses when they've honestly spent money for travel, entertainment, etc in regards to trying to sell the script and at the end of the option they are unsuccessful? do they just consider it a business loss and move on?

Geoff Alexander
11-08-2010, 10:11 AM
so i met with this group today and they were surprised that i highlighted everything i had a concern about but were particularly in disagreement with this clause i stated at the start of this post:



from their perspective they feel as though if the option expires without them being able to sell it then that is fine and i dont owe them anything, BUT if i sell it later down the line that i owe them...... however they kept saying "whoever you sell it to will pay the expenses not you but it will be up to you to let them know our expenses will need to be paid from the previous attempt to try and sell it"....we went back and forth about this for a half hour and neither of us would budge because they feel as though they've lost money and if i'm selling it then they should be reimbursed.

i know this group legitimately does have contacts to studios for a fact. doesnt change the way i feel about the clause. basically i would have baggage attached to my project (their expenses) no matter who buys the script and if they dont pay it then I have to pay it. i know this group personally and they are just starting out so i dont think their intentions are to scam me BUT i have enough common sense to know when something's not in my benefit. i've also had a lawyer glance at the contract (for free) and he basically said everything i highlighted in the contract was right on point.

bottom line is, i'm not signing off on any of the things i dont like, hate to be a tight a$$ about it, but i am willing to walk away from the deal. if there's any suggestions you have that can help me convince them that this is NOT the norm then that would be helpful. they are really convinced this is normal practice to be reimbursed if the project gets picked up with another studio or even if i find independent investors on my own to make the film.

**edit** - also can anybody explain what most management or producers do as far as their expenses when they've honestly spent money for travel, entertainment, etc in regards to trying to sell the script and at the end of the option they are unsuccessful? do they just consider it a business loss and move on?

On the management side, it's not like there are a lot of hard costs involved in shopping a script. So, if it doesn't sell and you go your separate ways, fine. Same thing on the producing side, unless you get to the point that you are budgeting and scheduling, scouting locations, basically, prepping. Obviously that wouldn't apply here. These people sound like absolute amateurs. Who is it?

Juno Styles
11-08-2010, 05:32 PM
On the management side, it's not like there are a lot of hard costs involved in shopping a script. So, if it doesn't sell and you go your separate ways, fine. Same thing on the producing side, unless you get to the point that you are budgeting and scheduling, scouting locations, basically, prepping. Obviously that wouldn't apply here. These people sound like absolute amateurs. Who is it?

yea so that's what i was thinking. doesnt every business take some form of a loss due to the cost of doing business? like, if i shoot a movie with no name actors, then James Cameron wants to use one of the actors because he liked their performance in my movie...i'm not going to have the damn actor give me a percentage of whatever Cameron pays him and say "well if it wasnt for my movie he woulda never known who you are!"

this small group is new, they actually work for a reputable studio and are trying to branch off to do their own thing using the contacts they've made over the years which sound pretty solid. they're just convinced this is how all producers work for some reason. not sure who they've been talking to that has them so convinced this is industry standard to charge the client if he sells the project somewhere else.

SoCalScribe
11-09-2010, 01:31 PM
so i met with this group today and they were surprised that i highlighted everything i had a concern about but were particularly in disagreement with this clause i stated at the start of this post:

If at the end of the option listed in this agreement, the “Owner” chooses not to exercise the option to extend or renew the agreement, the “Producer” can levy any documented outstanding “out of pocket” expenses that has been incurred on behalf of the Producer in his duty to secure financing or distribution. “Out of Pocket expenses” is defined as actual dollars spent on shipping, business related meals and entertainment, travel, phone, fax, and legal expenses. Documentation of these expenses will be available to the “Owner” upon request and will only become due upon any future financial exploitation of the above-mentioned “Property”. Although the “Producer” will not encumber the rights in any way, the “Owner” is responsible to settle any “Out of pocket expenses” using first monies in, the “Producer” will then release any and all financial claims based on these expenses.

from their perspective they feel as though if the option expires without them being able to sell it then that is fine and i dont owe them anything, BUT if i sell it later down the line that i owe them...... however they kept saying "whoever you sell it to will pay the expenses not you but it will be up to you to let them know our expenses will need to be paid from the previous attempt to try and sell it"....we went back and forth about this for a half hour and neither of us would budge because they feel as though they've lost money and if i'm selling it then they should be reimbursed.

i know this group legitimately does have contacts to studios for a fact. doesnt change the way i feel about the clause. basically i would have baggage attached to my project (their expenses) no matter who buys the script and if they dont pay it then I have to pay it. i know this group personally and they are just starting out so i dont think their intentions are to scam me BUT i have enough common sense to know when something's not in my benefit. i've also had a lawyer glance at the contract (for free) and he basically said everything i highlighted in the contract was right on point.

bottom line is, i'm not signing off on any of the things i dont like, hate to be a tight a$$ about it, but i am willing to walk away from the deal. if there's any suggestions you have that can help me convince them that this is NOT the norm then that would be helpful. they are really convinced this is normal practice to be reimbursed if the project gets picked up with another studio or even if i find independent investors on my own to make the film.

**edit** - also can anybody explain what most management or producers do as far as their expenses when they've honestly spent money for travel, entertainment, etc in regards to trying to sell the script and at the end of the option they are unsuccessful? do they just consider it a business loss and move on?

This is a completely bogus clause in an option/purchase agreement. I wouldn't sign any option that had this kind of financial obligation attached to it. From the perspective of the person optioning the material, there should never be any clause that requires any future obligations on the part of the owner, either in terms of the rights or the finances. Once the option is over, the purchaser should have zero right, title and/or interest to the property. Everything reverts back to the owner, and the owner should not be further obligated to the purchaser in any way.

Business expenses are a commonly reimbursable item when it comes to acquiring the project... when one company buys the property from another, for example. Or when a writer wants their project back in turnaround. In those situations, recouping business expenses is customary. It is not customary to financially obligate the owner for business expenses when the material is under option. Only their expenses for a property they own (i.e. exercise the option and purchase it from the writer), when selling it to another entity or individual.

All the time and expenses incurred trying to get a project made are (or at least should be) incurred by the purchaser and are assumed as the cost of doing business.

This clause is their way of basically saying, "Even if we don't do anything on this project and can't get it made, we can still bill you (or any company you sell it to) for our time." The only time I would ever agree to that situation is if they bought the property, rather than optioned it. If they option it, the option needs to stipulate that you get the property back in the same way it was given; without encumbrance or obligation. If they want to be able to charge for their time, they can buy the property from you and treat it as a company asset. They don't get to have their cake and eat it too, by not paying for a purchase price, and also insisting on charging for expenses as if they owned it.

Geoff Alexander
11-09-2010, 03:01 PM
yea so that's what i was thinking. doesnt every business take some form of a loss due to the cost of doing business? like, if i shoot a movie with no name actors, then James Cameron wants to use one of the actors because he liked their performance in my movie...i'm not going to have the damn actor give me a percentage of whatever Cameron pays him and say "well if it wasnt for my movie he woulda never known who you are!"

this small group is new, they actually work for a reputable studio and are trying to branch off to do their own thing using the contacts they've made over the years which sound pretty solid. they're just convinced this is how all producers work for some reason. not sure who they've been talking to that has them so convinced this is industry standard to charge the client if he sells the project somewhere else.

I don't understand how they could be affiliated with a studio and believe this to be common or acceptable practice in this sort of agreement. Who is it?

Ronaldinho
11-09-2010, 03:29 PM
I don't understand how they could be affiliated with a studio and believe this to be common or acceptable practice in this sort of agreement. Who is it?

It's possible that they're just trying to do what most people do on reversions - certain money counts against the rewrites for the purpose of reacquisition.

But the way the clause is written, it's way too broad - as near as I can tell.

The O.P. needs a lawyer. Stat.

SoCalScribe
11-09-2010, 03:43 PM
It's possible that they're just trying to do what most people do on reversions - certain money counts against the rewrites for the purpose of reacquisition.

But the way the clause is written, it's way too broad - as near as I can tell.

The O.P. needs a lawyer. Stat.

But reversion and turnaround clauses only apply to properties that are owned. These guys seem to want the protections offered by these reversion and turnaround clauses without actually paying for or fully acquiring the rights... just optioning them for a period of time. In essence, they want the writer to financially attach them to the project going forward and in perpetuity, for what is in all likelihood a finite length of time that the material is under option to them.

I don't know anyone associated with the studios who would even pretend that this is a standard business practice.

Hamboogul
11-09-2010, 03:45 PM
It's possible that they're just trying to do what most people do on reversions - certain money counts against the rewrites for the purpose of reacquisition.

But the way the clause is written, it's way too broad - as near as I can tell.

The O.P. needs a lawyer. Stat.

I normally agree with you on everything except this.

For a FREE OPTION, this agreement has no upsides for the OP. And a lawyer will be a complete waste of time and money.

What's the point of signing this in the first place. Money? NO. The notion that this company will work harder for you with this signed option? NO.

Either tell them that you won't sign anything or move on.

Juno Styles
11-09-2010, 04:33 PM
they said they're making revisions to it and want to have me take another look at it. i told them that's fine. i'm going to give them another week or so and then will give them a final ultimatum.


For a FREE OPTION, this agreement has no upsides for the OP.

in their mind their "contacts" are the upside. i told them without a product your contacts are worthless. the subject got changed after i said this.

they really seem to be concerned with the possibility of me somehow cutting them out of the deal if/when someone is interested. they are going directly to some studio execs supposedly and mentioned a lot of times these people want to bring in their own producers and will try and cut them out and figure out a way to deal with just me exclusively if they're interested....i can't figure out how/why that's my problem.

SoCalScribe
11-09-2010, 04:52 PM
they said they're making revisions to it and want to have me take another look at it. i told them that's fine. i'm going to give them another week or so and then will give them a final ultimatum.



in their mind their "contacts" are the upside. i told them without a product your contacts are worthless. the subject got changed after i said this.

they really seem to be concerned with the possibility of me somehow cutting them out of the deal if/when someone is interested. they are going directly to some studio execs supposedly and mentioned a lot of times these people want to bring in their own producers and will try and cut them out and figure out a way to deal with just me exclusively if they're interested....i can't figure out how/why that's my problem.

Unless they're introducing you to their contacts personally and giving you the ability to meet with these people independently of them, I don't see how indefinite interest in your project is an appropriate request for them making a few phone calls. At worst, they get passes from their contacts in which case they didn't really do anything. At best, they get a commitment and can then purchase the script from you. An Option-Purchase Agreement should be very clear; if they want the project (for whatever reason) they can buy it. If they don't, the option will lapse and you get your rights back.

The argument that they're going to be cut out of the deal doesn't hold water. If you're offered a deal when they have an option on the rights, they can't get cut out. If you're offered a deal when they no longer have an option on the rights, they aren't involved anyway, and have no claim of involvement. If they're concerned about being cut out by the studio, they either need better relationships, or need to offer you an option agreement that covers a length of time that makes them feel comfortable.

Under no circumstances should you obligate your project to them financially... after the option period... simply because they're worried that they're going to get cut out of the deal. If they're that worried, they should buy the project and thus permanently establish themselves as part of the chain of title. But if they're not offering purchase money, they shouldn't get the rights associated with a rights acquisition, no matter who they know.

Seriously, I've been in this business on the company side of things for almost a decade. What they're asking for is ludicrous. I've never seen anyone ask for financial ties after the option has expired... especially on the mere basis of the fact that they're going to send it to their contacts. That's their job as producers.

Geoff Alexander
11-09-2010, 05:01 PM
they said they're making revisions to it and want to have me take another look at it. i told them that's fine. i'm going to give them another week or so and then will give them a final ultimatum.



in their mind their "contacts" are the upside. i told them without a product your contacts are worthless. the subject got changed after i said this.

they really seem to be concerned with the possibility of me somehow cutting them out of the deal if/when someone is interested. they are going directly to some studio execs supposedly and mentioned a lot of times these people want to bring in their own producers and will try and cut them out and figure out a way to deal with just me exclusively if they're interested....i can't figure out how/why that's my problem.

What are the basic terms of the option? It shouldn't be so complicated, with all this weird baggage.

Juno Styles
11-09-2010, 05:04 PM
Unless they're introducing you to their contacts personally and giving you the ability to meet with these people independently of them, I don't see how indefinite interest in your project is an appropriate request for them making a few phone calls. At worst, they get passes from their contacts in which case they didn't really do anything. At best, they get a commitment and can then purchase the script from you. An Option-Purchase Agreement should be very clear; if they want the project (for whatever reason) they can buy it. If they don't, the option will lapse and you get your rights back.

The argument that they're going to be cut out of the deal doesn't hold water. If you're offered a deal when they have an option on the rights, they can't get cut out. If you're offered a deal when they no longer have an option on the rights, they aren't involved anyway, and have no claim of involvement. If they're concerned about being cut out by the studio, they either need better relationships, or need to offer you an option agreement that covers a length of time that makes them feel comfortable.

Under no circumstances should you obligate your project to them financially... after the option period... simply because they're worried that they're going to get cut out of the deal. If they're that worried, they should buy the project and thus permanently establish themselves as part of the chain of title. But if they're not offering purchase money, they shouldn't get the rights associated with a rights acquisition, no matter who they know.

Seriously, I've been in this business on the company side of things for almost a decade. What they're asking for is ludicrous. I've never seen anyone ask for financial ties after the option has expired... especially on the mere basis of the fact that they're going to send it to their contacts. That's their job as producers.

makes perfect sense. this is just my first offer and even i feel that way just based on common sense and running a business on my own so it's reassuring to hear it from someone like yourself (and others in this thread) to keep things in perspective based on your experiences with these types of situations.

SoCalScribe
11-09-2010, 05:14 PM
makes perfect sense. this is just my first offer and even i feel that way just based on common sense and running a business on my own so it's reassuring to hear it from someone like yourself (and others in this thread) to keep things in perspective based on your experiences with these types of situations.

For the record, there ARE situations where a studio will try to cut out the middle-man (like these guys), but that usually happens with rights "hoarders" (companies that just option and option and option, hoping to turn it around to the studios and make a quick buck). This usually happens when the studio realizes that you've been offered a three-month or six-month option... because then they can just wait it out for a couple months and not bring on baggage producers who are more interested in an elevated purchase price than making a movie. Of course, all this falls under "not your problem."

They clearly have a questionable relationship with the studios if they're so paranoid about being cut out of the process... but again, "not your problem." Tell them that they can either make you an increased offer for a longer option period, or are always welcome to purchase the material outright. But when the option period is over, their right, title and interest to the project is severed. It's all or nothing. They're either paying you equitably for the rights, or not involved in the project. They don't get it both ways, and they don't get to sit back and collect long after their efforts are over. :D

Juno Styles
11-09-2010, 05:15 PM
What are the basic terms of the option? It shouldn't be so complicated, with all this weird baggage.

basically here's what they want that I have an issue with. everything else is pretty standard, but these are red flags and what i won't sign off on:


15% of whatever they negotiate for writer
writer to reimburse them for expenses after option expires in the event that I sell it to someone else (although the actual contract says they can incur it upon me at anytime)
if they attach talent to project, if i ever decide to use that talent while dealing with someone else for the same project then they get paid or credit for doing the initial legwork - by "attach" they are referring to letters of intent. i explained to them i could wipe my ass with a letter of intent because until the actor makes a real commitment to the project - which you're not going to get without paying them - then they're not officially attached. essentially for all i know they could get 50 letters of intent and that'd be 50 actors in hollywood i can't use
they want 6 months on the option - i'm only giving them 3 months since it's free and they said they already know people looking for projects and there's no money involved
there were a few other minor things i wanted added (like having all parties sign non-disclosure forms and they provide me with list of people they sent my script to at end of option), but they had no problem with changing it to my terms.

Juno Styles
11-09-2010, 05:19 PM
For the record, there ARE situations where a studio will try to cut out the middle-man (like these guys), but that usually happens with rights "hoarders" (companies that just option and option and option, hoping to turn it around to the studios and make a quick buck). This usually happens when the studio realizes that you've been offered a three-month or six-month option... because then they can just wait it out for a couple months and not bring on baggage producers who are more interested in an elevated purchase price than making a movie. Of course, all this falls under "not your problem."

They clearly have a questionable relationship with the studios if they're so paranoid about being cut out of the process... but again, "not your problem." Tell them that they can either make you an increased offer for a longer option period, or are always welcome to purchase the material outright. But when the option period is over, their right, title and interest to the project is severed. It's all or nothing. They're either paying you equitably for the rights, or not involved in the project. They don't get it both ways, and they don't get to sit back and collect long after their efforts are over. :D

yep i agree. that will be what i say next time we meet. i actually have a feeling they will give in to what i want because they were so excited about the script and plus they know some people (supposedly) that are ready to make financial moves. if they don't, then i guess we'll never know. i've read too many horror stories on this board from people getting caught up in bad option agreements and i'm the type of person that learns from other people's mistakes.

SoCalScribe
11-09-2010, 05:40 PM
basically here's what they want that I have an issue with. everything else is pretty standard, but these are red flags and what i won't sign off on:


15% of whatever they negotiate for writer Reasonable, for a representation contract. No problems here.
writer to reimburse them for expenses after option expires in the event that I sell it to someone else (although the actual contract says they can incur it upon me at anytime) Absolutely not. Expenses they incur are their own responsibility, unless they're giving you the authority to approve those expenses in advance. Standard industry practice is to NOT charge the writer for copies, postage, phone charges, etc. They can be applied (as development expenses) against the production... but that is an issue for them and the producers/production company/studio. Under no circumstances should the writer bear those costs in any way, shape, or form.
if they attach talent to project, if i ever decide to use that talent while dealing with someone else for the same project then they get paid or credit for doing the initial legwork No way. They don't get to play Six Degrees of Separation. Unless they're directly responsible for attaching talent, they don't get credit or compensation. What if the studio has a relationship with the same actor? They're insisting they should get credit and paid because they thought of him/her first. Also, to repeat what was said above... this is an issue between producers/companies/studios... in no way should the writer's option agreement carry these obligations.
they want 6 months on the option - i'm only giving them 3 months since it's free and they said they already know people looking for projects and there's no money involvedSix months vs. three months isn't a big deal, especially when compared to the other points. I'd give them six months and their 15% negotiated against those two outrageous points they've included. Or offer a free three months for the initial option period, and $100 for a three (or six) month extension. Something like that, which shows good faith on your part to work with them on the timing, if they'll work with you by taking offensively constrictive language out of the contract. ;)
there were a few other minor things i wanted added (like having all parties sign non-disclosure forms and they provide me with list of people they sent my script to at end of option), but they had no problem with changing it to my terms.

Made my comments in-line, above.

Juno Styles
11-09-2010, 07:40 PM
Reasonable, for a representation contract. No problems here..

wouldn't representation be considered the same as management in this case? in which case the standard should be 10% not 15%. even if they're acting as an agent, which still is 10%, they're still attaching themselves as producer and getting a credit and money from that. this seems like a lot for just making some calls and sending a script out. if somebody likes it then they'll make an offer, we negotiate, shouldn't be rocket science after that correct?

SoCalScribe
11-09-2010, 07:58 PM
wouldn't representation be considered the same as management in this case? in which case the standard should be 10% not 15%. even if they're acting as an agent, which still is 10%, they're still attaching themselves as producer and getting a credit and money from that. this seems like a lot for just making some calls and sending a script out. if somebody likes it then they'll make an offer, we negotiate, shouldn't be rocket science after that correct?

Management fees are not regulated... I've seen 10% and 15%. I've actually seen some as high as 20% and 25% although that's extremely rare.

However, be very careful... there is a difference between representing the writer, and producing the project. These days a lot of managers fancy themselves producers, but in many cases it's a conflict of interests when you have a producer on the project who is also a writer's representative... because those roles often clash and it's extremely difficult to act in the best interests of both the project and the writer in all situations (like during writing fee negotiations).

Is this a representation arrangement (where they represent you and try to find a home for your work) or a producing arrangement (where they option the work - not you as a writer - and try to get it produced)? Ethically, they shouldn't get to double dip and charge you a both representation fee and other fees on the same project if it's produced.

I'd be more than happy to talk specifics if you want to send me a copy of the contract. PM me if you're interested.

Juno Styles
11-09-2010, 08:15 PM
Management fees are not regulated... I've seen 10% and 15%. I've actually seen some as high as 20% and 25% although that's extremely rare.

However, be very careful... there is a difference between representing the writer, and producing the project. These days a lot of managers fancy themselves producers, but in many cases it's a conflict of interests when you have a producer on the project who is also a writer's representative... because those roles often clash and it's extremely difficult to act in the best interests of both the project and the writer in all situations (like during writing fee negotiations).

Is this a representation arrangement (where they represent you and try to find a home for your work) or a producing arrangement (where they option the work - not you as a writer - and try to get it produced)? Ethically, they shouldn't get to double dip and charge you a both representation fee and other fees on the same project if it's produced.

I'd be more than happy to talk specifics if you want to send me a copy of the contract. PM me if you're interested.

they are considering themselves to be a management company as well as produce. basically it sounds like they are trying to set themselves up like a CAA or William Morris-Endeavor group by managing actors, writers, musicians, etc. They are starting out with writers right now. so yes they are double dipping by charging me 15% for whatever they negotiate plus taking producer credits so hell i dont know what kind of arrangement this is, lol.

i'll PM you or send you a copy of the contract. what types of conflicts of interests can happen when you have a producer on the project who is also a writer's representative?

Ronaldinho
11-10-2010, 10:26 AM
I normally agree with you on everything except this.

For a FREE OPTION, this agreement has no upsides for the OP. And a lawyer will be a complete waste of time and money.

What's the point of signing this in the first place. Money? NO. The notion that this company will work harder for you with this signed option? NO.

Either tell them that you won't sign anything or move on.

Fair point.

I was operating under the assumption that he wanted to sign an option with them.

Ronaldinho
11-10-2010, 10:32 AM
basically here's what they want that I have an issue with. everything else is pretty standard, but these are red flags and what i won't sign off on:

[LIST=1]
15% of whatever they negotiate for writer


Huh? What?

No. These guys have to decide if they're producers or managers. If they're managers, they can get 15% (which they repay out of producers fees on a go project). But there are no "options" involved, nothing like that.

This would be reasonable IF IT WERE A REPRESENTATION CONTRACT but it's not. It's an option deal. If your fee is not negotiated in the option deal, that doesn't mean it's up to them to negotiate it - it means that when they set up it up at a studio with them attached as producers, you still have to negotiate your deal for the project to happen.

These guys are not your managers. They're treading so far over the manager-agent line that I would just run away from them right now.

if they attach talent to project, if i ever decide to use that talent while dealing with someone else for the same project then they get paid or credit for doing the initial legwork - by "attach" they are referring to letters of intent. i explained to them i could wipe my ass with a letter of intent because until the actor makes a real commitment to the project - which you're not going to get without paying them - then they're not officially attached. essentially for all i know they could get 50 letters of intent and that'd be 50 actors in hollywood i can't use

I agree with you here, but honestly the 15% thing is a killer for me anyway. These guys need to figure out who they are.

Geoff Alexander
11-10-2010, 12:23 PM
they are considering themselves to be a management company as well as produce. basically it sounds like they are trying to set themselves up like a CAA or William Morris-Endeavor group by managing actors, writers, musicians, etc. They are starting out with writers right now. so yes they are double dipping by charging me 15% for whatever they negotiate plus taking producer credits so hell i dont know what kind of arrangement this is, lol.

i'll PM you or send you a copy of the contract. what types of conflicts of interests can happen when you have a producer on the project who is also a writer's representative?

Am I reading all this correctly?

You are dealing with a company that is trying to launch themselves as a management company. This brand new management/production company with (I assume) a very limited track record wants to OPTION your material. They want to do this for free. Then they want to shop it as PRODUCERS. If they sell it, they will take a producing fee (which I assume they have not disclosed to you) which could be a major roadblock in getting a deal done. At the same time, they want to commission the sale, which is a highly unusual practice frowned upon by pretty much anyone in the management business. They want a commission which is higher than that charged by pretty much any reputable company. If they fail to sell the script, then they want to charge money against the project which will make it harder for anyone else out in the world who likes the material to do anything about it. And, by the way, it doesn't sound as if they have any real intent of working with you on the management side, i.e., doing the hard work of developing and marketing your material over the long term.

And for this you get...what? A royal screwing. Seriously. I can't understand why you would put yourself in this position. These guys sound so FOS, that it is a classic case of a bad "manager" or "Producer" potentially doing much more harm than a good one. I would love to know who these jokers are, feel free to PM, I won't reveal it.

Hasil Adkins
11-10-2010, 01:17 PM
what types of conflicts of interests can happen when you have a producer on the project who is also a writer's representative?

Broadly, if the studio wants to replace the writer, it would put the producer in the position of having to fire his own client or kill the project.

Ronaldinho
11-10-2010, 01:53 PM
i'll PM you or send you a copy of the contract. what types of conflicts of interests can happen when you have a producer on the project who is also a writer's representative?

Here's the big one:

There are a couple of numbers they're trying to negotiate when they sell a project: your writer's fee, and their producer's fee.

While these fees will be paid at different times, they're often paid out of the same pot. The studio would LOVE to backload the deal (keep writers fees low, make it up in producers fees) because that way they only pay out when they're making the movie, they pay less during development.

So they say, "instead of paying you $200k for the script and $200k as a producer's fee, we'll pay you $120k for the script and $250 as a producer's fee." The studio saves $30k if the project goes. The producer MAKES an extra $38k ($50k - 15% of your decreased wages).

Somebody who was representing you and only you would never make that deal. Somebody who was representing you AND being a producer on the project would.

SoCalScribe
11-10-2010, 02:16 PM
they are considering themselves to be a management company as well as produce. basically it sounds like they are trying to set themselves up like a CAA or William Morris-Endeavor group by managing actors, writers, musicians, etc. They are starting out with writers right now. so yes they are double dipping by charging me 15% for whatever they negotiate plus taking producer credits so hell i dont know what kind of arrangement this is, lol.

i'll PM you or send you a copy of the contract. what types of conflicts of interests can happen when you have a producer on the project who is also a writer's representative?

The best way to characterize the conflict of interest is to put it in terms of a situation where the writer's representative and the producer are diametrically opposed:


EXAMPLE #1 - Let's say that they give you notes to rewrite, and after that rewrite, you have an optional polish. Let's say the other producers, the company, etc. hate the rewrite... you just missed the mark and it isn't what they wanted. As a producer, his job is to not pay you for the optional polish, save that money, and hire a new writer they like better. As a writer's representative, his job is to fight tooth and nail to get you that optional polish, so he gets his percentage, by convincing them that you can turn around a draft they'll be happy with in the next pass. Thus, his job as a producer trying to make the movie as cheaply as possible is in direct conflict with his job as a writer's rep trying to get you the most money possible.

EXAMPLE #2 - This is by far the most common instance... during negotiation of the writer's contract. As a producer, his job is to get the most amount of writing for the least amount of money. As a writer's rep, his job is to get the least amount of writing for the most about of money. As a producer, he should be negotiating for optional steps, deferred compensation, etc. As a writer's rep, he should be negotiating for more up-front compensation, guaranteed steps, etc. Want the company to pay to fly you to the set and the premiere? As a writer's rep, he should try to get that for you. As a producer, he should be trying not to obligate the production for that expense. How about when they file a Notice of Tentative Writing Credits with the WGA if it's a guild picture? As a writer's rep, he should be fighting for you to get sole credit. As a producer, he should be fighting for the writing credits that least obligate the production to pay out bonuses and contingent compensation. Again, the writer's rep and the producer are in direct opposition. Problematic if it's the same person fighting for both sides.


So this person (if he serves as both a writer's rep and a producer), now has to make a choice. With each and every decision he makes, is he going to act in the best interests of the production... or the best interests of his client, the writer? And when he's a producer (which means he's collecting a fee if the project gets made), do you think he's going to pick you (the writer) so he can get 10-15% of a writing fee? Or is he going to pick the production and maximize his chances for credit, a big producing fee and backend, etc. by shortchanging you, if necessary? Unless you're making a ton of money for these steps and allowing him to collect tens of thousands of dollars as a fee... he'll most likely take his chances on the big pay day of the production, rather than the $750 that's his 15% share of a $5,000 optional polish that he's going to have to spend days or even weeks negotiating to get you paid for.

This is why I always recommend that people be careful when signing with managers who also fancy themselves producers. If they're planning on producing the project they're representing you on, I'd want to have a very serious conversation with them about where their priorities are going to be if there's ever a conflict of interests between what's best for you - the writer - or what's best for production. :rolleyes:

Juno Styles
11-10-2010, 02:21 PM
Am I reading all this correctly?

You are dealing with a company that is trying to launch themselves as a management company. This brand new management/production company with (I assume) a very limited track record wants to OPTION your material. They want to do this for free. Then they want to shop it as PRODUCERS. If they sell it, they will take a producing fee (which I assume they have not disclosed to you) which could be a major roadblock in getting a deal done. At the same time, they want to commission the sale, which is a highly unusual practice frowned upon by pretty much anyone in the management business. They want a commission which is higher than that charged by pretty much any reputable company. If they fail to sell the script, then they want to charge money against the project which will make it harder for anyone else out in the world who likes the material to do anything about it. And, by the way, it doesn't sound as if they have any real intent of working with you on the management side, i.e., doing the hard work of developing and marketing your material over the long term.

And for this you get...what? A royal screwing. Seriously. I can't understand why you would put yourself in this position. These guys sound so FOS, that it is a classic case of a bad "manager" or "Producer" potentially doing much more harm than a good one. I would love to know who these jokers are, feel free to PM, I won't reveal it.

lol, yes that is it basically. however i haven't put myself in any kind of situation being as i haven't signed anything. they've given me their contract which works out for them in every way possible, i rejected it and now they're trying to make revisions so it's quite possible they'll go along with what i proposed since they're interested, in which case i have no issue with and would have a lawyer draw up a formal contract at that point. i actually have a relative that works at a law firm who's willing to pull a "one-time-strings" favor for me to draw up the paperwork. at this point i don't feel comfortable giving out who they are especially since i've voiced my opinion about this situation all over a public forum and in another thread. if they don't see it my way and i give them a formal "no" then i'll reveal who they are, but to be honest they aren't known or listed anywhere as they are really fresh, like a few months since they started the company type of fresh. just a small group of guys at a studio with some connections (or at least open lines of communications with other studios/people looking to purchase scripts) trying to step out on their own.

Broadly, if the studio wants to replace the writer, it would put the producer in the position of having to fire his own client or kill the project.

good point.

Here's the big one:

There are a couple of numbers they're trying to negotiate when they sell a project: your writer's fee, and their producer's fee.

While these fees will be paid at different times, they're often paid out of the same pot. The studio would LOVE to backload the deal (keep writers fees low, make it up in producers fees) because that way they only pay out when they're making the movie, they pay less during development.

So they say, "instead of paying you $200k for the script and $200k as a producer's fee, we'll pay you $120k for the script and $250 as a producer's fee." The studio saves $30k if the project goes. The producer MAKES an extra $38k ($50k - 15% of your decreased wages).

Somebody who was representing you and only you would never make that deal. Somebody who was representing you AND being a producer on the project would.

holy sh#t.....now that's a slick move on the studio's part right there.

Juno Styles
11-10-2010, 02:27 PM
The best way to characterize the conflict of interest is to put it in terms of a situation where the writer's representative and the producer are diametrically opposed:


EXAMPLE #1 - Let's say that they give you notes to rewrite, and after that rewrite, you have an optional polish. Let's say the other producers, the company, etc. hate the rewrite... you just missed the mark and it isn't what they wanted. As a producer, his job is to not pay you for the optional polish, save that money, and hire a new writer they like better. As a writer's representative, his job is to fight tooth and nail to get you that optional polish, so he gets his percentage, by convincing them that you can turn around a draft they'll be happy with in the next pass. Thus, his job as a producer trying to make the movie as cheaply as possible is in direct conflict with his job as a writer's rep trying to get you the most money possible.

EXAMPLE #2 - This is by far the most common instance... during negotiation of the writer's contract. As a producer, his job is to get the most amount of writing for the least amount of money. As a writer's rep, his job is to get the least amount of writing for the most about of money. As a producer, he should be negotiating for optional steps, deferred compensation, etc. As a writer's rep, he should be negotiating for more up-front compensation, guaranteed steps, etc. Want the company to pay to fly you to the set and the premiere? As a writer's rep, he should try to get that for you. As a producer, he should be trying not to obligate the production for that expense. How about when they file a Notice of Tentative Writing Credits with the WGA if it's a guild picture? As a writer's rep, he should be fighting for you to get sole credit. As a producer, he should be fighting for the writing credits that least obligate the production to pay out bonuses and contingent compensation. Again, the writer's rep and the producer are in direct opposition. Problematic if it's the same person fighting for both sides.


So this person (if he serves as both a writer's rep and a producer), now has to make a choice. With each and every decision he makes, is he going to act in the best interests of the production... or the best interests of his client, the writer? And when he's a producer (which means he's collecting a fee if the project gets made), do you think he's going to pick you (the writer) so he can get 10-15% of a writing fee? Or is he going to pick the production and maximize his chances for credit, a big producing fee and backend, etc. by shortchanging you, if necessary? Unless you're making a ton of money for these steps and allowing him to collect tens of thousands of dollars as a fee... he'll most likely take his chances on the big pay day of the production, rather than the $750 that's his 15% share of a $5,000 optional polish that he's going to have to spend days or even weeks negotiating to get you paid for.

This is why I always recommend that people be careful when signing with managers who also fancy themselves producers. If they're planning on producing the project they're representing you on, I'd want to have a very serious conversation with them about where their priorities are going to be if there's ever a conflict of interests between what's best for you - the writer - or what's best for production. :rolleyes:

excellent response. crystal clear.