First right of refusal

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  • First right of refusal

    Just received an offer this morning from a producer. I already forwarded it to my entertainment attorney and expect to hear back from her next week. In the meantime, I'm wondering if anyone here has received an offer stating that the producer receives the "first right of refusal" for a year. The offer doesn't state that it's for an option, which leads me to think that it's really more of a shopping agreement where the producer can refuse anyone else that comes to me with an offer to purchase the screenplay. If that is the case, that's obviously a deal killer for me. Why would I grant a producer the first right of refusal if they are not even offering me anything up front? So, has anyone ever had an agreement where the term "first right of refusal" is included? Again, makes no sense to me.

  • #2
    Re: First right of refusal

    Why would I grant a producer the first right of refusal if they are not even offering me anything up front?
    Because he is putting his muscle behind getting it made?

    The point being that you can't, then have him set it up, and then when the deal happens, turn around and cut him out, making the same deal with somebody else as the producer.

    It stops you from selling the project out from under him. That may well be the standard language used in shopping agreements (although those are often more informal, so I don't know for sure).

    eg, let's say he has contacts at three studios. He's busting his ass, trying to get it set up, and then somebody leaks it to a friend with a deal at a fourth studio. Fourth studio wants it, makes an offer, without him as a producer. He ends up with nothing for his hard work. The right of first refusal means you can't take it to that other studio without him, unless he doesn't want to do it. You're not stopped from taking it there, but you can't muscle him out.

    If the right only exists for a short period of time, I don't see it as a huge problem necessarily but I don't know this type of deal that well so see what your lawyer says. (Your lawyer is an entertainment attorney, right? Somebody who understands how this business works? If not ... get one.)

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    • #3
      Re: First right of refusal

      Well, is this is an exclusive or non-exclusive agreement?
      http://www.pjmcilvaine.com/

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      • #4
        Re: First right of refusal

        Yeah, 'offer' is pretty broadly used here.

        It used to connote sale offer. It sounds like that's not the case here.

        Even an option agreement would likely specify an exclusive arrangement versus whatever "right of first refusal" is supposed to cover.


        The only time I've ever heard "right of first refusal"is in the case of a term deal film company who, say, lives on the Fox lot. Then they have to give Fox the first crack at movies they want to make, and are free to submit to other studios after Fox passes.

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        • #5
          Re: First right of refusal

          My lawyer agreed with me. We're telling the producer they can offer me a formal option (not free) or a six month shopping agreement (of course, non-exclusive). Exclusive or non-exclusive -- there's nothing in between.

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          • #6
            Re: First right of refusal

            Originally posted by Pasquali56 View Post
            My lawyer agreed with me. We're telling the producer they can offer me a formal option (not free) or a six month shopping agreement (of course, non-exclusive). Exclusive or non-exclusive -- there's nothing in between.
            Good. I never thought of RoFR or First Look as an offer coming out of nowhere for no consideration. As Pardack said, this was usually an agreement between a producer and the studio that housed them on the lot or between parties with history. And typically because the script or project is still in the works -- there's nothing to read yet. A producer I'd done a couple of films with asked for Right of First Refusal on a script I was working on independently. She wanted the chance to read it and proceed or pass before other producers did. In no way was it a free one-year option, just a limited concession to someone who'd given me some work.

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