Most aspiring screenwriters dream of selling their script. However, many times — especially in the earlier days of a screenwriting career — a writer is more likely to have their script optioned by a producer or production company. But what exactly is a screenplay option and how does it differ from screenplay sale?
A screenplay option is an agreement between you and another party in which you grant them sole rights to your script during the period dictated in the agreement; this usually ranges from six months to a year (although some option agreements can be for as long as eighteen months or the time can be extended). By granting them sole rights during the allotted period, no other producer or production company are allowed to do anything with your script. The optioning party, however, can do many things with your script: they can attach talent to it (a director and/or actors); they can ask for you to rewrite it or bring on other writers to rewrite it; and finally, they can shop it to different studios with the hope of setting up the project.
But do you get paid if your script is optioned?
Sometimes, but not usually at the start of the agreement.
Free options have become very common in recent years, especially with independent producers or production companies. When I first broke into the film business, a popular comedy troupe had a six month free option on my spec script PIERRE PIERRE. My cowriter and I performed a pro bono rewrite for the troupe and they had six months to try to set it up at a studio. When their option expired, they had failed to set it up, and we were able to package the script with a larger production company and an A-list actor and director (this subsequently lead to a studio purchasing the script). Generally speaking, if you have a strong enough package (A-list producers, director and actor), there won’t be an option agreement because — as in the case with PIERRE PIERRE — it can lead quickly to a sale.
In some cases, after the option period has expired, a producer or production company might want to extend the option. Depending on how invested they are in the project, this is usually the ideal time for your reps to negotiate some form of financial compensation. I have a couple screenwriting friends who had their scripts initially optioned for free, but then when it came time to extend the option, the producers were willing to pay them. Most likely, this won’t be a huge payday, but it’ll be enough to offer some good will and prove that the optioning party is indeed invested in the project.
Option rates vary depending on the size of the production company and/or the prowess of your lawyer and whatever leverage they might have to work with. Typically the rates range from a few thousand dollars to 10% of the purchase price (if there ever is a sale). In some cases, especially if you have a good lawyer, a purchase price will be negotiated when drafting the option agreement, including rewrite steps, your compensation for each step, etc. If you’re getting paid upfront, oftentimes this money will be against any subsequent purchase price. Generally speaking, it’s best to get money upfront if you can. Not only will it prove the optioning party’s investment in the project, but unfortunately most options don’t lead to sales (that’s just a statistical fact in a highly-competitive marketplace). The best options should be for a short time period and offer some money upfront. Otherwise, a producer might sit on your script for a long time without any incentive to set it up. However, as pointed out above, sometimes a free option can lead to a writer getting paid if the producers stay invested in the project.
So you now know what a screenplay option is, but what’s a “script sale” exactly?
A script sale or script purchase is more straight-forward: someone’s buying your script. Typically it’s a major studio or larger financier, but occasionally a producer or production company will choose to purchase a script rather than option it. A couple years back, I was fortunate enough to have a production company buy one of my scripts, in which case I was fully compensation per a purchase agreement (a.k.a. a writer’s agreement). This was a company with some pretty deep pockets, however, and not a typical scenario by any means. In most cases, producers will take the free option route, in the hope that a studio or larger financier will eventually pay everyone involved in the project. When this latter scenario occurs, the lawyers get to work and negotiate deals for all parties: the writer, producer, director, actor, etc.
In addition to the agreed compensation for the purchase of your script, most lawyers will also negotiate guaranteed and optional rewrite steps, various bonuses at various stages of production, on-screen credit, net profits, and a slew of other tidbits that will probably never materialize but the lawyers enjoyed fighting for. The important thing is someone is actually buying your script and they’re paying you money for it. Speaking from experience, it doesn’t get much better that that. You created something via your imagination and hard work, and now people who are richer than you are buying it.
Of course, once they buy it, that’s the thing: they own it. Forever (or until it goes into turnaround, but that’s a whole other article). Short of the couple rewrite steps your lawyer hopefully got for you, your role in your script’s future is tenuous at best. Unlike an option in which you still technically own your script, once you sign a purchase agreement, it’s no longer yours. Even if you’ve got guaranteed rewrite steps, you’ll be a paid employee rewriting their script. Whoever owns your script can do whatever they want with it and bring on whoever they want to rewrite it. This is when you should emotionally detach from your script. Cinema is a collaborative art-form and, above all, a business. You want your script to sell and get made into a movie, right? Well, then you’ll have to move on and enjoy being in a potentially higher tax bracket. As my first manager always said, “This is a good problem.”
Whether your script is optioned or purchased, it should be a triumphant moment when this first happens for a writer. Not only has your work been validated, you’ll be one step closer to becoming a professional screenwriter.