How to figure out how much to charge for option/sell?

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  • How to figure out how much to charge for option/sell?

    Hi, long time no post!

    I've been contacted this week by a number of directors, actors and film persons (seemingly out of nowhere). I checked them out and they're all legit.

    A director wants to buy one of my feature scripts or even option and asked me how much. I have NO idea what to say. I've never had anything produced.
    This person has produced numerous shorts (very well done), won awards, etc.
    So I asked her what her budget was (for the production).
    Haven't gotten a reply on that yet. This just happened.

    Do you think 5% of the production budget is about right? I think I remember reading this number somewhere. For an indie film, is this reasonable or too much?

  • #2
    Re: How to figure out how much to charge for option/sell?

    The indie world is across all spectrums. 5% may be great. Unless they plan on shooting on a $20K budget. 2% may sound horrible. But if they can get $3M in funding, it's not terrible. You're probably better off negotiating hard numbers, but on a sliding scale based on budget (i.e. $30K for up to a $1M budget, $70K if $3M or over, etc). AND you definitely want an entertainment attorney looking it over.

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    • #3
      Re: How to figure out how much to charge for option/sell?

      Thank you for the suggestions, Dango! I definitely will do that (find a ent. lawyer)

      Comment


      • #4
        Re: How to figure out how much to charge for option/sell?

        Usually it's 2.5% of the budget, but that's for a purchase price (IE, they option the script for some smaller amount, and when it actually begins shooting, you finally get that 2.5% payment). Go into this knowing that in the indie world, where a director has only shorts under her belt, the amount they're looking to pay for that option is somewhere between $0 and $1. Not to say you can't get more, but I guarantee that's Plan A for them, and you're gonna have to convince them otherwise. They're gonna dangle that 2.5% as the true benefit of their offer, but you don't see a cent of that until cameras roll.
        https://twitter.com/DavidCoggeshall
        http://www.imdb.com/name/nm1548597/

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        • #5
          Re: How to figure out how much to charge for option/sell?

          Originally posted by ProfessorChomp View Post
          but you don't see a cent of that until cameras roll.
          Yeah, I forgot to mention that. Unless you can get some up front money. (Something with at least 3 zeroes behind it. It's possible, but hard to do if you don't have any previous projects to point to.)

          Comment


          • #6
            Re: How to figure out how much to charge for option/sell?

            Originally posted by ProfessorChomp View Post
            Usually it's 2.5% of the budget, but that's for a purchase price (IE, they option the script for some smaller amount, and when it actually begins shooting, you finally get that 2.5% payment). Go into this knowing that in the indie world, where a director has only shorts under her belt, the amount they're looking to pay for that option is somewhere between $0 and $1. Not to say you can't get more, but I guarantee that's Plan A for them, and you're gonna have to convince them otherwise. They're gonna dangle that 2.5% as the true benefit of their offer, but you don't see a cent of that until cameras roll.
            Ugh... I will most definitely try to convince her for more.
            $1!? There's just no way I'd give my script away for practically nothing.

            Unless there's a really good reason to... (Who here has done this and feels good about it? Is it purely to get your first production credit?)
            Last edited by Terri; 12-31-2017, 01:20 AM.

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            • #7
              Re: How to figure out how much to charge for option/sell?

              Hi Terri,

              First of all congrats on getting so much interest in your script and on getting an offer.

              Do you have a manager? I'm assuming you don't but a manager can help a lot in these situations (advice + negotiating). Might be time to try to look for one.

              I'm guessing the director wants to do a free option. I've done both free options and paid options and it really comes down to: 1. How passionate the person is about the project 2. What kind of funding contacts/connections he/she has. 3. The according odds of this person actually getting some people on board and getting funding. 4. If he/she wants you to do some rewrites. 5. How long they want it for. Don't automatically rule out a free option because if the director has really good funding connections (And yes - you are totally allowed to ask what their connections are and what they plan to do with your script once they've optioned it) and is passionate about it, those two things can go a long way toward getting the movie fully funded and your script sold, which would mean $$$ for you.

              These things are kind of like the famous marshmallow test, where they have 5-year-olds sit in front of a marshmallow for five minutes, and if they can manage to do that without eating it, then they get to eat 2 marshmallows instead of 1.

              Don't make the mistake of eating the first marshmallow

              By the way I used to be totally against free options but not anymore because one of my free options has now become an IMDB credit.

              Comment


              • #8
                Re: How to figure out how much to charge for option/sell?

                Originally posted by Terri View Post
                Ugh... I will most definitely try to convince her for more.
                $1!? There's just no way I'd give my script away for practically nothing.

                Unless there's a really good reason to... (Who here has done this and feels good about it? Is it purely to get your first production credit?)
                You wouldn't be selling it for a $1. That's not what an option is.

                This is the option I signed for my short a few years ago.

                -----------------------------------------

                SCREENPLAY OPTION AGREEMENT

                This letter sets forth the Agreement {"Agreement-) between XXXX XXXXX (the
                -Screenwriter" ) and XXXX Pictures (the "Producer") with respect to the short
                film screenplay currently entitled "XXXXXXX."

                1. Exclusive Options:

                Producer shall acquire the following exclusive option to purchase "XXXXXXX" for
                production into a motion picture film. Producer agrees to pay $1.00 per year
                for 2 years for the exclusive option to purchase all rights to "XXXXXXX."

                If principal photography is not completed within 2 years from the date of
                screenplay purchase, full rights to "XXXXXXX" revert to Screenwriter.

                Option shall begin from the date Producer receives a fully executed copy of
                this agreement.

                2. Purchase Price

                2.Producer agrees to pay 5% (FIVE PERCENT) of the final production budget
                (excluding completion bond, overhead, financing costs, and interest charges)
                of the Picture. Upon payment of purchase price, Producer shall acquire all
                rights to the Property (as described below).

                3. Rights Granted

                Screenwriter hereby grants to Producer the exclusive options as set forth
                above to purchase outright, exclusively and in perpetuity, all right, title,
                and interest of any kind or nature whatsoever, whether now or hereafter known
                or existing in all languages, throughout the universe in and to the property
                (the "Rights-). The Rights shall include, without limitation, all motion
                picture, television and allied rights in and to the Property including,
                without limitation, music, live action, animation, remake, sequel, prequel,
                series, Digital television and video cassette and/or video laser disc
                recording, sound track, media rights, merchandising, and commercial tie-up
                rights in and to the Property and any and all rights there from or ancillary
                thereto and the exclusive right to exploit any and/or all such rights as
                Producer may choose in its sole discretion in any and/or all media now or
                hereafter known or devised in perpetuity, throughout the universe.

                4. Representations and Warranties:

                Screenwriter warrants and represents that all ideas, creations, material, and
                intellectual properties furnished by Screenwriter herein are and will be
                Screenwriter's own and original creation. Screenwriter warrants and
                represents that Screenwriter's have the sole and exclusive right and
                authority to enter into and fully perform this agreement and to
                grant exclusively to Producer the Rights granted herein.

                5. Indemnities:

                Screenwriter shall defend, indemnify and save harmless Producer, it's
                successors, licensees and assigns, and any officers, directors, employees/
                agents and/or representatives of any of the foregoing,
                from and against any and all claims and expenses (including without
                limitation reasonable legal fees and expenses) incurred by any of them
                by reason of the breach or alleged breach of any warranty undertaking,
                representation and/or agreement made by or entered into herein by
                Screenwriter hereunder.

                6. Producers Control:

                Screenwriter acknowledges the right of Producer to make any changes to the
                Property in the preparation and exploitation of any productions based on the
                property, and in this connection Screenwriter acknowledges and agrees that
                Screenwriter will not have any right of approval or consultation with respect
                to any such changes or with respect to any element of any production produced
                hereunder.

                7. No lnjunctive Relief

                Screenwriter's sole and exclusive remedy for any breach of this Agreement
                shall be limited to an action for damages at law and under no circumstances
                shall Screenwriter be entitled to equitable relief or to restrain or enjoin
                the distribution of any motion picture hereunder or other exploitation of any
                of the Rights granted to Producer hereunder

                9. Articles:

                Notices to Screenwriter shall be sent to the address below.
                XXXXXXXXXXX XXXXXXX XXXXXXX XXXX XX XXXXXXXXXXX XXXXXX.

                l0. Credit:

                The title credit that will appear in the film shall read -Screenplay by XXXX
                XXXXX AND Any Additional writer(s)," and it is further agreed upon that a
                separate credit in the film shall read "Original story by XXXX XXXXX."

                This letter Agreement shall constitute a complete and mutually binding
                Agreement that cannot be modified except by writing signed by all parties.

                By singing below you indicate your acceptance of this Agreement and are bound
                by its terms.

                (With signature lines and addresses below.)
                "I just couldn't live in a world without me."

                Comment


                • #9
                  Re: How to figure out how much to charge for option/sell?

                  Originally posted by grumpywriter View Post
                  Hi Terri,

                  First of all congrats on getting so much interest in your script and on getting an offer.

                  Do you have a manager? I'm assuming you don't but a manager can help a lot in these situations (advice + negotiating). Might be time to try to look for one.

                  I'm guessing the director wants to do a free option. I've done both free options and paid options and it really comes down to: 1. How passionate the person is about the project 2. What kind of funding contacts/connections he/she has. 3. The according odds of this person actually getting some people on board and getting funding. 4. If he/she wants you to do some rewrites. 5. How long they want it for. Don't automatically rule out a free option because if the director has really good funding connections (And yes - you are totally allowed to ask what their connections are and what they plan to do with your script once they've optioned it) and is passionate about it, those two things can go a long way toward getting the movie fully funded and your script sold, which would mean $$$ for you.

                  These things are kind of like the famous marshmallow test, where they have 5-year-olds sit in front of a marshmallow for five minutes, and if they can manage to do that without eating it, then they get to eat 2 marshmallows instead of 1.

                  Don't make the mistake of eating the first marshmallow

                  By the way I used to be totally against free options but not anymore because one of my free options has now become an IMDB credit.
                  Thank you for this! I will not rule it out. I have no credits to my name to date, so that would be nice to have, to finally get the ball rolling.

                  And I do see on this person's IMDB page, this person has some pretty good contacts, so I'm pretty excited.


                  @StoryWriter --- I dunno why, but I read "option" and my brain converted it to "sale".... 2 different things. Thanks for pointing that out.

                  Comment


                  • #10
                    Re: How to figure out how much to charge for option/sell?

                    Best of luck with your option/sale.

                    For a bit of realism, let's consider the other side for a moment:

                    In checking out some recent InkTip leads that came up in their preferred newsletter listings, I found a few of the listing producer's on-line profiles, blogs and other writings. They expose how things work, as I say, from their p.o.v.:

                    first-steps-producing-content-creation-mikhael-bassilli

                    (Note that the InkTip item did not refer me to the above or to any other information - I came upon it only by doing my due diligence as I contemplated whether to respond to any of his leads.)

                    Summarizing, his main advice to aspiring producers (and it would apply to established companies, since the priorities for growth and momentum are the same) is not some deep dark secret: It's merely to accrue as much good I.P. (screenplays and any other intellectual property and rights to exploite) as one can.

                    Some of you may say, cynically, "to build their production companies on the backs of desperate writers". Others may acknowledge that "it's just business, so writers should not take offense".

                    Well, there are always bad ones in the litter, but I'm more on the side of the latter.

                    Still, remember how I referred to "due diligence". It's our responsibility to protect our own interests.

                    Eager young Mr. Bassilli's production company, Play Think Entertainment, is quite new but in pitchfests he's stated they're looking at material up to $50M. Wow! Yet, from the blog article we may presume they fall into the category of "poor" new producers that this article is attempting to counsel through the process of building their company: That either they don't have much money for options, or that in most cases it shouldn't be necessary to shell out very much, given the eagerness of new writers to grab a toehold.

                    An aside: Given that this article is directed at newbie producers, yet he didn't let slip that most heinous term, "baby writers" (I wouldn't have been able to finish the article), this sort of tells me that he's a good guy. As he emphasizes: "Be professional".

                    Anyway, why did I post this here? To warn you or to impact his reputation? Absolutely not! I admire his approach. As a result of my due diligence, I am now prepared to make the right kind of deal with him, if an opportunity were to arise. I did send in a single response to his (so far) three or four listings that I've seen on InkTip.

                    But the guy's clearly an energetic, well-educated millennial tackling this archaic business in a modern, organized and intelligent fashion, as best he can given his newish position, and in a way that the participants in the system (including us writers) permit him to. Like any labor-management negotiations, you ask for the sky but take what you can get.

                    Quite possibly, he could be the "champion", that some of us seek, to fill in the gaps in our own capabilities.

                    Remember, for us, as for "the other side", one has to start somewhere. It doesn't cost that much money to become a player in this game.

                    Merely connections. (The big money comes from the little bit of money that can come from each of those many, many individual connections!)

                    Oh, and lots of I.P.

                    Personally, after I sell a few scripts the traditional way, I hope to use my proceeds as seed money for my own production company - mostly for producing my own stuff, of course - and will endeavor to grow my company in exactly the way Mr. Bassilli advocates. Or, heck, maybe partner with his, or others like his.

                    This is a business.

                    So to bring this full circle, a zero- or one-dollar option may be perfect for us. Or perfectly awful.

                    It depends on the circumstances, as well as on the other 9 pages in the agreement that accompany it.

                    And yeah, before any pen hits the paper, get an attorney.

                    And no, my position on any negotiations is that I personally won't ever consider an option below four figures. (But what's in those other nine pages?)

                    Again, good luck to all!

                    Comment


                    • #11
                      Re: How to figure out how much to charge for option/sell?

                      Cliff's Notes for the above post: “Best of luck with your option/sale.”

                      (Re-read StoryWriter, grumpywriter, and ProfessorChomp posts and apply)
                      Last edited by Clint Hill; 01-02-2018, 02:52 AM.
                      “Nothing is what rocks dream about” ― Aristotle

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