Options make the trades?



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  • Options make the trades?


    Do options make it into the trades? Variety, HWR, DDP?

    I'm seeing a lot of six, sometimes seven figure deals... (Jonah Hill?) but I'm not naive... I know scripts are almost always come with an "option" price in the contract first, and most people won't make money on specs until cameras begin filming. Even if they have a 600,000 against 1.1 million in contract, is the script sometimes "optioned" first? And then the reader receives payment?

    I guess I'm not as familiar with the business system as I'd like to be. But I'm four scripts deep now and have been focusing on the craft more than the business end, and when I go out with the script that those in my circle seem to love, I want to be prepared.

  • #2
    Re: Options make the trades?

    I've had one script optioned. I was paid some money up-front (not a lot, but fair) against a certain amount if the script was produced.

    Every time the option was renewed (3 times) I was paid again and all the while I was working with the producer on rewrites. The terms were in the original contract negotiated by my entertainment attorney. She asked for the world, and I settled for a lot less, happy to have the opportunity to work with a respected producer on my first script, especially since she was on one coast and I'm on the other. I felt pretty lucky.

    It never did get produced, but I own the rewritten version and I think I learned more about the business end of things than the writing end

    That's my experience so far. Others probably have a vastly different story.

    BTW - my option never made the trades, but this was several years ago.
    Last edited by Johnnycomelately; 02-18-2009, 06:03 AM.


    • #3
      Re: Options make the trades?

      So I'm assuming that with the trades that say, "600,000 against 1.1 million..." there's no option there? That the 1.1 million is the production money, but they still get 600,000 up front (or after their required rewrites).

      But with an option contract, let's say, the deal would say something like, "10,000 for a 12 month option, with 200,000 if the film goes into production."

      Or are there other steps in an "option" contract? Such as... "10,000 for 12 month option... 50,000 if a studio buys the pitch, 150,000 more if it goes into production?"

      Or is it something like "10,000 for the option, 120,000 if the studio buys the project, and another 100,000 if it goes into production?"

      Are my numbers funny? I'm just curious in option contracts... what's the main goal, here? To get the studio to buy it? Or do they need the studio to buy it AND go to production before they get a big chunk of the change?

      Perhaps someone with more business experience can clear up some of my confusion?


      • #4
        Re: Options make the trades?

        If your attorney is good there should always be steps in your contract.
        For instance.

        25k 12mos option
        WGA rate for polish by predetermined date
        WGA rate for page re-write by predetermined date
        250k upon principal photography

        there is usually a option renewal price also put into the contract in case production doesn't start by contracts end.


        • #5
          Re: Options make the trades?

          Oftentimes, stories that appear in the trades are essentially press releases sent out by a production company, manager, studio, etc. to which a trade reporter attaches his byline.

          The prices and terms mentioned in these "articles" may be accurate or they may have only a passing connection with what actually happened, especially with dollars actually received upfront by the writer.

          Huge sales have been announced while the writer sees little or no money for many months.

          These press release/articles seldom seem to differentiate between options and sales.


          • #6
            Re: Options make the trades?

            Thanks for the input, guys.

            I know it's not a simple concept and that two options are almost never the same, but I was just curious.

            I raise these questions because I've written four scripts right now without really trying to learn big details of the business side. I figure if I engrossed myself in that it would backfire -- I'd either read too many posts on here talking about "script requests" from agents, managers, prodcos, etc, and get caught up in sending my stuff out before it's ready.

            I've had people tell me this last one that I'm definitely ready, so I'm trying to learn as much as I can, but it's tough.

            My last question: It's almost always producers who option scripts, correct? Studios almost never touch anything without a complete package unless there's a major star/director attached first, right?

            So if I want to get a script optioned, I go to the Prodcos I think would be interested and work my way from the top dogs to the medium-size dogs and down, right?

            But the only way to get most of the top and medium dogs to read it, you need a referral or an agent or a manger, right?

            And to get an agent with some pull who can get your stuff out there to the top dogs, you need a big-time referral, right?

            Am I following the chain well enough?

            What would you guys suggest to me, who's got two scripts he's really confident with and has never written a query letter before? Who do I send stuff to?


            • #7
              Re: Options make the trades?

              Originally posted by boski
              Yes and No--I think options typically come from producers, more so than studios. I've heard studios tend to just buy scripts outright.
              Not in my experience. To use one of my scripts as an example:

              John Tucker Must Die was optioned by MGM, and with the option, they also hired me to do two guaranteed rewrite steps. I did those, did a couple of optional steps as well. The option was renewed along the way, but both option payments were much less than what I made for the rewrites.

              The option finally expired.

              Fox optioned it and hired me for more rewrite steps. Movie went forward, got greenlit. They bought it from me one week before it started shooting - once they were sure it was getting made.

              All in all, before anyone bought the script, I think I did seven or eight paid rewrites on it, and got four option payments.


              • #8
                Re: Options make the trades?

                Very interesting, Jeff and boski.

                Thanks a lot for the advice. It more or less confirmed what my mindset was about all this -- that it's really hard, and the path is long.


                • #9
                  Re: Options make the trades?

                  Interesting. So in your type of case Jeff, typically when would the announcement of the sale hit the trades? When Fox actually buys it? In other words, most of the spec sales we read about today probably first started out as options, correct?

                  That part was always a little unclear to me since DDP doesn't specify.


                  • #10
                    Re: Options make the trades?

                    Originally posted by Rantanplan View Post
                    Interesting. So in your type of case Jeff, typically when would the announcement of the sale hit the trades? When Fox actually buys it? In other words, most of the spec sales we read about today probably first started out as options, correct?

                    That part was always a little unclear to me since DDP doesn't specify.

                    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.


                    • #11
                      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?


                      • #12
                        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.


                        • #13
                          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?


                          • #14
                            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?


                            • #15
                              Re: Options make the trades?

                              Originally posted by boski
                              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.