Free Option?Complications Ensue
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Sunday, April 17, 2011

Q. A producer wants to option my script and send it to Téléfilm next week for script development financing. He’s offering a symbolic $1 fee for the option, and says that it is common for our industry (Québec and non WGC member). The production company is well known and has a good reputation, I’m not concerned with ill intent, I’d just like a confirmation that indeed it is common, especially for an up and comer without screen credits and not a member of any writing guild. I understand that as a member of a guild, it’s a hard thing to accept, but from my perspective, is it something I should expect?
Normally I'm against free options. An option fee is not only money in your pocket. It is also an indicator of how solid the producer is, and how serious he is about your project. A producer who can't scare up even a thousand bucks to option your script is either not very serious or not very solid.

Normally I would say that if a producer is balking at paying money, you can offer him a shopping agreement: he can take it around, and he's attached, but you won't actually negotiate your deal until it's set up somewhere. This naturally puts you in a much better negotiating position; but hey, if he wants to lock down your material, he's got to put out.

However, here in Canada, and especially in Québecistan, producers rarely have any cash lying around. All but the strongest have to take projects to funding agencies even to get you an option fee. So it's not unreasonable for a producer to ask for an essentially free option. The shopping agreement doesn't work in features, because the funding agencies require that the producer have an option.

So while an experienced writer might expect to get paid something for an option, a writer with few or not credits might have to sign a free option.

However, since it's free, you should expect a very, very good agreement. I would ask for the following, whether you're in the States or Canada:

  • Once there's funding, you get an option fee equivalent to the WGC minimum (which is 10% of the script fee).
  • All minimums should be equivalent to WGC minimums: script fee, production fee, royalties, etc. .
  • Credit to be determined, in the event of dispute, by a mutually approved arbitrator, using the criteria of the WGA MBA or WGC IPA.

(Actually, if all possible, get a deal that says that once there's funding, the option deal becomes an actual WGC deal. (Technically you sign a short-term non-Guild "option to option" deal that grants the producer the right to execute a long-term, as-yet-unsigned WGA or WGC agreeement.) You really, really want to have the Guild behind you.)
  • Right of first refusal to write the first rewrite at no less than WGA or WGC scale. If you don't have this, they can pay you the option payment, and then give the rewrites to a slew of fancy writers. Otherwise, the producer could spend $80,000 on rewrites, fail to make the movie, and you wind up with a couple of thousand bucks because he chose a fancier writer than you.
  • It's a good idea to ask for a clause that says if the option expires, you get the rights to all your rewrites back, subject to a payment on the first day of principal photography of any amounts you were paid to write them. Otherwise after the option expires, the producer still owns your rewrites, and that amounts to having veto power of any future deal you might do with a third party. There's no good reason for a producer to refuse this, since if he doesn't have the option anymore, the rewrites are useless to him.

Once you have signed an option agreement, you lose all your leverage. So make sure it's a really robust agreement. If they're not paying you, they really have no right to nickel-and-dime you on on the option agreement. And if they're being sticky about the terms of the free option, then you really shouldn't feel bad about walking away.



Speaking of Writers Guild of America (WGA) a/k/a "Gilded Writers of America," there's some alternative history of WGA-East of early 1970s posted on "Writers Guild Office Boy" blog beginning at following link, which might interest readers:

By Blogger b.f., at 7:55 PM  

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