On the rare chance that a producer has purchased your script outright, you won’t need to read any further.
The reality for most screenwriters is that a producer will option your script. This is analogous to renting a house. You pay a sum of money for the exclusive right to exploit the property for a period of time, usually six to twelve months. If the option lapses, it can be renewed, usually for a higher price.
It’s always exciting when a producer shows interest in your script and it’s tempting to agree to the first offer without examining if it is right for you. The film world is a collaborative one, so there is no need to bow to all the producer’s demands especially if it’s your first sale. Make your requests reasonable. A seven figure upfront deal with back end profit participation isn’t reasonable.
Here are some elements to examine in your agreement with a potential buyer:
- What is their credibility? Do they have imdb credits and references?
- Can they reasonably raise finance?
- How long is the option? The shorter the better. It’s the producer’s job to secure talent and financing during this period.
- Price of option? Typically it’s set at 10% of the purchase price, although dollar options still exist. Once a script is sold, the option price is offset against the sale (applicable) price. Some producers pay more to allow them more time to secure finance and a sale.
- Try to obtain the WGA minimum to allow you to join if the production company is a WGA signatory. Is the price fixed or a proportion of the production budget? If the latter, aim for 2-3% of the budget with a price floor and ceiling in place.
- Are there any back end points or profit participation scheme?
- Are there any reserved rights such as book or stage play? This is often referred to as separated rights.
- What is the credit process? Will you share with another writer? If so, who’s name comes first? Will your name appear in all publicity materials?
- Screenwriters are typically offered the first chance to write the sequel. If not, you can typically request 50% of the new writer’s contract amount.
- You should be given the first opportunity to write the remakes.
- Negotiate prices for additional polishes and rewrites.
- Request representation and warranties to prove you own the rights to the script.
- Request audit and arbitration rights?
- Now the fun stuff. Request invitations to wrap parties, premieres, set visitation and a DVD.