Q. I have a producer interested in my script. I want to direct. I've directed a few short films.
The film could be made for $10-20M as it's a commercial style high budget film. The producer agrees.
But he is a not a big fish either. He's got one film greenlit, but no producer credits.
He has sent me an Option Purchase Agreement for $1. Purchase price is $50k + 5% of producer's share of proceeds and another $50k for the directing. Would you say that's reasonable for an unknown author + first time directing?
He doesn't want to sign a directing agreement yet; he says that a simple paragraph in the option is enough.
The thing he has mentioned though, is that he would bring an experienced co-director on board - what I'm worried about is that once he does that, he'll just kick me out.
There are a number of things wrong with this situation. One, nobody is going to fund a debut feature for $10M except in exceptional circumstances. E.g., you are an award-winning director of commercials with hundreds of well-known spots under your belt; or, your father is Francis Coppola; or, Tom Cruise is in love with you and is willing to appear in the picture. A $10M film requires bankable stars. The agents of these bankable stars will resist putting them in a movie with an unproven director. Distributors will also resist making financial commitments on a movie directed by an unproven director.
Normally a feature debut is more like a million-dollar budget, though it can vary from much less to a bit more.
Hence, the "experienced co-director." There are very few "co-directors" in the world, and they are usually brothers. The producer intends to tell everyone that the "experienced co-director" will do the real directing. At some point they'll make a deal with you to buy you out so they don't have to give you a directing credit, because an "experienced co-director" isn't going to want to share credit with you after he's done all the actual directing.
A producer who has one picture "greenlit" but no credits ... that's not very convincing. How do you know the film is actually greenlit? How do you know if the producer is the prime mover in the picture, or is just one of many producers?
A $1 option is not very good, obviously. It means the producer does not have any money to spare, and/or does not have that much faith in your project. He's willing to throw it out there and see if anyone's interested, but he's not willing to invest money in it. However, I wouldn't rule out a $1 option. A feature debut is always a difficult proposition for the producer. Assuming you really believe the producer has the clout and enthusiasm to get the picture made, a $1 option could conceivably be worth agreeing to. However, option renewals should not be free. If he hasn't advanced the project after 12 months, he should either have to pay some money (even $500) or return it to you.
$50K is a reasonable purchase price for a script by a non-union writer, and $50K is a decent salary for a first time director, but neither are par for a $10M movie. There should normally be some sort of escalator. For the script you should get 2%-4% of budget on the first day of principal photography, split with the other credited writers. (Plus the 5% of Producer's Net, assuming there is any.)
The producer is correct that you don't need a full directing contract, just a Right of First Refusal to direct in the option agreement. However, the ROFR can't be subject to this or that (e.g. "subject to approval by the investors"). It has to be an absolute ROFR, or it won't mean anything. (I am not a lawyer. This is not legal advice.)
You also want a ROFR to do at least the first paid rewrite, at union rates. Or whatever rate you're willing to rewrite for. The producer will ask you to rewrite endlessly for free, on the grounds that hey, it's a feature debut. You might decide that's worth doing, IF the producer is for real and your directing is for real, and you have faith in the producer's notes. But when a producer pays for a rewrite, he's really going to focus on giving you the best notes possible, whereas when he doesn't, he might try out half-baked ideas on you, because it doesn't cost him anything.
(I don't advocate rewriting for free when you're only the screenwriter, unless you're just starting out. Some feature screenwriters live off rewrites of their own optioned work.)
The key question: have you shown this script around to other people If you've shown it around and no one else is interested, you might take this deal. If you haven't shown it around, you might shop it a bit more and see what the interest level is elsewhere.
It's tough when you get enthusiasm from someone but no money. Sometimes you have to take these crappy deals if they're the best on offer. But don't be in a hurry to lock up your project for a buck unless you really believe this guy is gung-ho on putting you in the director's chair -- which he's already told you he's not.
Also, consider putting this project aside for a third feature, and go write something that can be made for a million bucks. A million dollar budget script with a great hook and great execution, from a director with some short films people dig, is a very plausible proposition for producers and distribs.