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Old 02-19-2009, 03:41 PM   #11
Geoff Alexander
Join Date: May 2005
Posts: 3,588
Default Re: Options make the trades?

Originally Posted by mikeb View Post
Yeah. Kind of the reason I started the thread... was just curious how all that worked.

But in Jeff's case, I doubt it hit the trades when they actually bought it... because he said it happened a week before the movie started production. The stuff we read about is years away, I'm sure.
In Hollywood "buy" doesn't always mean "Buy." In fact, it rarely means that. Often, you will see deals announced in the trades as "script sales", etc., but in fact they are only options, even though they are at the studio or mini-major level. It's incredibly rare that anyone would buy a script outright, i.e., for the full and final purchase price. Pretty much everyone options material, from the Independent Producer to the Studios, it's just a question of how much they pay, and they hold off on paying off on the total purchase price until they are (as Jeff noted) literally days away from going in to production. Why would they do it any other way when that would mean tying up money unnecessarily?
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Old 02-19-2009, 03:46 PM   #12
Join Date: May 2005
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Default Re: Options make the trades?

I "sold" a spec last year that was in the trades. The deal is structured like this:

An option payment + two rewrite steps is the money I'm guaranteed no matter what happens.

We agreed on the price for additional rewrites, if they want them.

If they make the movie, they have to buy the script from me.

After credit is determined, there is a credit bonus - the size of which will depend on whether I get shared or sole credit, and how much they've paid me already.

To use fake numbers to illustrate it:

Let's say they give me 25k to option the script, and 100k for two rewrites, guaranteed.

They hire me for two more rewrites for 50k.

They're planning to make the script, so they buy it from me for 200k.

My deal was all "against" 500k.

So far they've paid me 375k. (Option + rewrites + purchase.) If I get sole screenplay credit, I get the difference - 125k. If I get shared screenplay credit, I get half that - 62.5k. If I only get a story credit, I get no bonus.

In the trades, the deal should be announced as "125 against 500." I'm getting 125 guaranteed, and the most I can make is 500.

There are all kinds of other weird permutations that can happen along the way - for example, there's nothing stopping me from doing so many additional rewrites that I blow past the bonus, in which case I'd get no bonus.

Or, I worked on one movie where I was the first writer, then left, then came back. Since they'd hired someone else in between, we had to negotiate a new contract for my writing when I came back. One of the conditions is that any new money I made couldn't be counted against my bonus. So, there, even though I ended up making more than my "ceiling," I was still eligible for a bonus.

Hope that helps.
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Old 02-19-2009, 05:32 PM   #13
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Join Date: Feb 2009
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Default Re: Options make the trades?

It helps a lot.

I think I was confused because I've always been told the advantages of selling a spec is you're giving up the guaranteed dollars, but stand to make a bunch more if the script ever gets sold.

Then all I hear is that you almost never sell it anyway -- you just get an option. But it makes a lot more sense if you figure you can get a contract like Jeff said, where the option is still kind of small... but there's the guaranteed rewrites, then the production bonuses, etc.

I know we said rare, but how rare are outright sales nowadays? What does it take? Bidding war, maybe?
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Old 02-19-2009, 06:47 PM   #14
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Default Re: Options make the trades?

I understand the step structure, because I've read about it a lot, but you spelled it out very clearly Jeff, thanks

Two questions though: of course a studio has to buy a script if they decide to make the film, but a lot of scripts get purchased and never produced, if I'm not mistaken. So there's no production bonus, but there's still the full blown sale of the property, after the options if there were options, and sometimes just outright.

Re. the trades, I'm still not clear as to when the sale gets reported, if it's at option time or at actual purchase time, but I guess we can assume that, as you say Mike, unless it's a bidding war or a pre-empt, it usually means the property has been optioned --with all the figures listed since those are spelled out in the option deal to begin wtih.

Sometimes it's fun to look up a few recent flicks on DDP and find out when they were first reported... it seems for most it's 3-4 years back, although some like Enchanted took I think 7 or 9 years to make it to the screen.

Then you see something like those two guys that sold ZOOKEEPER (spec) for 2 mil against 3 mil (!!!!!!!!!!) , and then TWO months later it's listed again as a rewrite with a brand new writer. Now I wonder in those kinds of extreme cases, how much did the two first guys end up walking away with?
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Old 02-20-2009, 04:29 PM   #15
Join Date: May 2005
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Default Re: Options make the trades?

Originally Posted by boski View Post
What I find especially surprising about this arrangement is that those guaranteed upfront amounts published in the trades are almost always in excess of six figures and sometimes well in excess of $100k-- which is actually equal to or greater than the Guild min. purchase price for scripts.

I certainly understand why a studio would hold off on paying back-end/against money until the film actually goes into production.

But why do studios pay guaranteed upfront money that's often well in excess of Guild min. purchase prices just to get an option and a couple of rewrites? Rather than saving money, this sounds to me like studios are losing money in a deal like that...
Why does anyone ever pay a writer more than guild minimum? Writers are in demand, they have track records, they have established quotes they're willing to work for. (Yes, several factors have put quotes under pressure lately. But ignoring that for now...)

Even if you sell a script outright, you'll be paid for rewrites on top of that price. So the studio can option a script for 25k or buy it for 500k - they're still going to be adding the writer's quote for rewrites on top of either figure.

And even if an option expires, it's not like the money they paid for the rewrites is lost. If another studio buys it, the first thing they have to do is get the rights to those rewrites that the first studio owns. Even if nothing from those rewrites gets used, no one wants to take a chance on a lawsuit.
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Old 02-26-2009, 05:04 PM   #16
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Default Re: Options make the trades?

On my last spec, we did one option period (no extensions) of three years, instead of a more typical 18 months/18 months. I believe we structured it that way so I got more guaranteed money up front. Of course, the tradeoff is that if it falls apart, I don't get it back right away... but as I've said, even if it falls apart, the next studio would need to make a deal with the current studio to acquire the rewrites anyway. In reality, it doesn't change much.

The option money is roughly 20% of the purchase price.
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