Optioned Screenplay

ejr

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I am a professional actor, branching into writing as a second career. I just received an option offer for my first screenplay -- which turned out to be a much lower rate of compensations than I expected. This will be a non-WGA feature and I am not represented by a literary agent. I am just wondering what the norms are in terms of the whole package (i.e. the initial payment giving the producer the right to raise money on my script, my percentage of the budget when it goes into production, and any other residuals or royalties when the film is sold to various markets.)

I am not expecting it to be as profitable as acting (where union contracts apply and I am represented by one of the big agencies in NYC). But what they are offering was so far below even my lowest expectations (especially when you consider how much work I put into the script) I would like to have some sort of baseline for comparison.

Thank you.
 

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Options are often token amounts, especially on spec scripts, and double especially with a non-WGA project.

A literary agent wouldn't be much help, unless the screenplay is attached to a novel series.

In the case of a novel series, or at least in the case of mine, the option was a little under ten percent of the agreed upon purchase price, renewable after a set number of months. Full purchase price isn't paid out until the movie is in pre-production, or 3 months from the start of filming, or whatever terms your attorney (please tell me you did this via attorney) negotiates for you.

You aren't getting any of "the budget" in terms of what's raised after the film goes into production. You get the purchase price and whatever net points might go along with it. Though net points are pretty much non-existent since most movies don't show net profits on paper. No net profits, no profit share for those with net points.

Having said that, congrats on the sale. I mean that literally and non-sarcastically. A first sale is still a first sale, and that's a huge first step a lot of people never get to take. Keep making sales, and once you qualify, join the WGA.
 

Bergerac

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I am a professional actor, branching into writing as a second career. I just received an option offer for my first screenplay -- which turned out to be a much lower rate of compensations than I expected. This will be a non-WGA feature and I am not represented by a literary agent.

Non-WGA options are usually token amounts, like $1 for one year (though you want to try and get it renewable at 4-6 months). Then renewable for a bigger amount, such as $1000 for often another year.

You don't need an agent for a non-WGA option, but an entertainment attorney would be a good idea.

I am just wondering what the norms are in terms of the whole package (i.e. the initial payment giving the producer the right to raise money on my script

$1 for 12 months.

, my percentage of the budget when it goes into production,

Whatever your contract says. Non-WGA non-produced screenwriters often get 1-1.5 percent of the budget. Produced screenwriters often can finagle 2-3 percent of the budget.

and any other residuals or royalties when the film is sold to various markets.)

Absolutely nothing. Seriously. You sold it -- it no longer belongs to you and all profits go elsewhere.

You will probably be offered net points but those are also referred to as "monkey points" because they don't exist.

In my life, I've been contractually granted literally thousands of net points and never got a penny despite a number of films making a huge profit. Everybody knows this so it doesn't come as a surprise.

Most purchase prices are paid out in thirds. One third when the option becomes a firm purchase; one third at the start of principal photography, and one third either when filming concludes or the film is released or Saturn is in retrograde or whatever. Always go for the most amount of money up front because chances are you won't see it at the end.

Sound like you get nothing? Right. BUT if your script actually gets made, the next time out you can get more bargaining power -- a shorter option period, a bigger up front fee, money for rewrites, maybe a producer credit or, as an actor, maybe a role for yourself.

I am not expecting it to be as profitable as acting (where union contracts apply and I am represented by one of the big agencies in NYC). But what they are offering was so far below even my lowest expectations (especially when you consider how much work I put into the script) I would like to have some sort of baseline for comparison.

Your lowest expectations were too high. Lower them. 9 out of 10 options go nowhere. But congratulations are in order -- use this time to write another script.
 

Bergerac

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You aren't getting any of "the budget" in terms of what's raised after the film goes into production. You get the purchase price and whatever net points might go along with it.
.

Not true. For non-WGA films, except under flat fee purchase agreements or fixed price ceiling cutoffs, screenplay purchase prices are absolutely and completely determined by the budget.

The script is a line item in every budget, usually 5 percent though the original writer gets far less than that.

Perhaps you are talking about the option/sale of existing source material? Like novels?
 

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I don't have any information or advice to offer. Just a huge congratulations on your success in your endeavors to branch out. Continued success to you and best wishes.
 

ejr

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Yes, I do have an attorney who specializes in copyright and patent law. As an actor, I've freelanced with most of the big agencies in NYC (Innovative Artists, ICM, Buchwald, Abrams, Paradigm). But their literary departments seem to be centered in L.A. and nobody I know has any clout with them. In this post I am asking questions that I would have asked a literary agent, if I had one. (I could ask my lawyer, but he charges by the hour. Agents -- at least for actors -- get only 10% -- and only if your contract is for more than the minimum rates negotiated by the applicable union).

So, what I am hearing is anything from 1 to 10 per cent of the budget is within the norm -- though that still sounds like a LOT of leeway to me. (And, yes, I am looking at the language of their proposed option agreement which says that my fees come out of their budget on the date that shooting commences -- i.e. after preproduction costs).

Looks like a very meager deal, but getting a writing credit is not without value to me. Just having an option offer on the table has opened doors for me all ready. A bigger company dropped everything to read my script. They're considering whether to offer me a better deal for it and have asked to read more of my work. If I can get two scripts produced, even in the current low to micro budget climate, it might take some of the sting out of selling my hard labor so cheap. Acting is a lot more profitable and fun, but I'm getting old and the state of my health limits what I am able to do these days.

Thanks for all the advice.

P.S. The producer offered me an associate producer credit as partial compensation for their small budget. Is that worth anything? Years ago, there was a joke going around that "An associate producer is anyone who associates with a producer". I am skeptical when I see an actor or writer with a producer credit. To me it suggests that the film was self-produced and that his talent may not have gotten him there. But that's just my subjective impression.
 
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Bergerac

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Whoever told you that a screenwriter gets more than five percent of the budget is either lying or is seriously misinformed.

I repeat: 1 percent to 1.5 percent of the budget is customary in non-WGA deals. 1.5 percent to 3 percent can be negotiated, usually based on your “juice” or produced credits.

Most non-WGA options are agreed upon with a deal memo – a one page document that outlines the basic agreement and percentages (and guarantees the material is your original property and not optioned elsewhere). These suffice until it’s time for purchase money to exchange hands, then it’s time for a long contract and an entertainment attorney to look it over – an entertainment attorney, not any other kind.

You don’t need an agent at this juncture. Screenplay literary agents have nothing in common with novel literary agents, though they once were more similar. Agents these days suggest produced writers for assignments and handle literary properties brought to them by managers.

Yes, once someone shows an interest in your script, you have “heat” and people will want to see more. Absolutely rattle every cage you have access to.

Your best bet is to land a manager – in L.A.

Hard labor – screenwriting? Try writing a novel. Scripts are fun and fast and maybe 26,000 words.

An associate producer credit is a good thing to have.

There are a lot of jokes about producers, but as a producer I often make a lot more than I make writing screenplays, and I’m WGA. So insult a worthy occupation all you want, but you know what Alfred Hitchcock said about actors, right? They’re cattle. :poke:


Yes, I do have an attorney who specializes in copyright and patent law. As an actor, I've freelanced with most of the big agencies in NYC (Innovative Artists, ICM, Buchwald, Abrams, Paradigm). But their literary departments seem to be centered in L.A. and nobody I know has any clout with them. In this post I am asking questions that I would have asked a literary agent, if I had one. (I could ask my lawyer, but he charges by the hour. Agents -- at least for actors -- get only 10% -- and only if your contract is for more than the minimum rates negotiated by the applicable union).

So, what I am hearing is anything from 1 to 10 per cent of the budget is within the norm -- though that still sounds like a LOT of leeway to me. (And, yes, I am looking at the language of their proposed option agreement which says that my fees come out of their budget on the date that shooting commences -- i.e. after preproduction costs).

Looks like a very meager deal, but getting a writing credit is not without value to me. Just having an option offer on the table has opened doors for me all ready. A bigger company dropped everything to read my script. They're considering whether to offer me a better deal for it and have asked to read more of my work. If I can get two scripts produced, even in the current low to micro budget climate, it might take some of the sting out of selling my hard labor so cheap. Acting is a lot more profitable and fun, but I'm getting old and the state of my health limits what I am able to do these days.

Thanks for all the advice.

P.S. The producer offered me an associate producer credit as partial compensation for their small budget. Is that worth anything? Years ago, there was a joke going around that "An associate producer is anyone who associates with a producer". I am skeptical when I see an actor or writer with a producer credit. To me it suggests that the film was self-produced and that his talent may not have gotten him there. But that's just my subjective impression.
 

ejr

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Two more questions:

Why is an associate producer credit "a good thing to have"?

Is there anything else I should be looking for, or wary of, in the option agreement?

Thanks.
 

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We've all heard the jokes. How much is an Associate Producer credit worth? Exactly $19.99.

How about the running joke from State and Main?

WHITE
What's an associate producer credit?

SMITH
It's what you give to your secretary instead of a raise.

You can simply buy a credit on many independent films.

The Producer's Guild complained for years about people who are barely involved in a film at all receiving producer credits. (Credit Proliferation.) Remember when Shakespeare in Love won Best Picture Oscar and half the audience got up to receive it? They've since regulated this but "Associate Producer" credits are still given as favors.

Is an Associate Producer credit worth anything? On the whole, it only shows your involvement with a project in some way. It's subjective to people's experience and attitudes towards the credit. It can be meaningful or it can be useless.

As a screenwriter, if an Associate Producer credit is on offer as payment, is it meaningful? That depends.

  • How will it benefit you?
  • Will it open doors for future projects?
  • If you accept an Associate Producer credit (in lieu of or in addition to partial payment) for your writing, what message does that give to those interested in your future projects?
  • Will they expect to be able to just give you a credit along with a few bucks or will they value your writing enough to pay for it?

What's an Associate Producer credit worth? Only you can answer that. My personal response is that it's worth nothing. I'm a writer, not a producer. I don't play the politics and favors games. As a whole, writers (in all fields) who continually accept less than fair compensation for their work just to be published or get a job, have kept the pay scale for every other writer below normal. On average, a writer's pay hasn't changed very much since the 1960's.

Are there valid reasons to accept an Associate Producer credit? Sure. Are there times when it would be selfish, stupid or show lack of principles, character and integrity? Yes. It all comes down to what your true motive is for taking it.
 

ejr

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Thanks, Cowboy. Those were my sentiments, exactly. But I am new to this side of the industry and would rather ask than make assumptions.
 

Fictional Cowboy

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In all honesty, ejr, from the few posts you've made, it's obvious that you're intelligent and well-spoken. It's also clear that your ego isn't overblown. If it were, with your current level of success, you wouldn't be on this forum asking advice with such humility.

I'm sure this has already occurred to you, but have you spoken with any professional screenwriters that you might know from acting? Unless you're wanting to keep your writing quiet for now, that's obviously going to be your best source for firsthand information.
 
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