The Writers Option / Purchase agreements is used when a producer would like to get the right from the writer to make a movie based on the writer’s screenplay.
This article will describe the various parts of the writers option/ purchase agreement such as:
- Option Fees
- Option Period
- Purchase Price
- Writer’s Credit.
The Rights – Writers Option / Purchase Agreements
The Agreement will include details about the producer’s movie rights based on a writer’s screenplay, Normally the producer will also negotiate all the rights to the screenplay. If the movie is successful, the producer wants the rights to also make sequel and remakes.
Sometimes writers will reserve certain rights.
The Option Fee – Writers Option / Purchase Agreements
The option fee is used to secure exclusive rights in the literary property for a specified time. The producer pays the writer a small down payment, the option fee, in exchange for the exclusive right to develop the property by attaching actors, finding a director and arranging financing.
At this point, the producer has not actually purchased the rights to the property, but rather, has secured the exclusive right to purchase the negotiated rights for a certain period into the future.
It is a smart way for the producer to secure rights in the property by paying a fraction of the purchase price while developing it and thereby avoiding having to pay the full purchase price until going into principal photography (shooting the film).
The Option Period – Writers Option / Purchase Agreements
The initial option period is usually for one year with an extension for two, or more additional one year options, in case more time if needed to develop the project.
The option extension must be exercised before the proceeding option period expires. If the producer fails to extend the option or actually purchase the rights, the writer retains all the option money and all the rights.
The Purchase Price – Writers Option / Purchase Agreements
When the producer is confident that the project is going into principal photography, the producer will exercises the option to buy the writer’s screenplay. This means that the producer pays the purchase price to the writer to transfer the negotiated rights to the producer.
The purchase price depends on whether the agreement is subject to WGA terms. A project is subject to WGA terms if the writer is a member of the WGA or if the producer is a signatory of the WGA (see www.wga.org).
If the agreement is not subject to WGA terms, the general practice is to pay 1.5%-5% of the budget of the film for all the rights needed to make the movie. Many times the purchase price will have a minimum amount and a maximum amount in order to keep the price within a reasonable range.
Writing Credit – Writers Option / Purchase Agreements
If the agreement is a WGA deal, it’s simple, the WGA will decide the writer’s credit. The WGA agreement states that the writer’s credit will be the same size as the director’s credit on the screen. Furthermore, the writer’s credit will appear immediately before the director’s credit in the main titles and will appear in all paid ads except specific negotiated exclusions.
If the agreement is not subject to WGA terms, the writer’s credit is negotiable. Writers should negotiate a deal that parallels the terms and conditions in the WGA agreement, even if the writer is not a WGA member and the producer is not a signatory of the WGA, to protect the writer’s credit position.
Conclusion – Writers Option / Purchase Agreements
This article is only an overview at the of potential terms and issues triggered when negotiating an writer’s option-purchase agreement. It is essential that all the key terms and issues of the option-purchase deal be negotiated and put in writing. Therefore, it is important to seek advice and guidance from experienced legal counsel before negotiating and signing an option-purchase agreement.
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