Before the Shoot: The Process of Script

Development
I have just spent three months negotiating one writer’s agreement,
where not a word has been written on the script. By the time we
lawyers have finished I sometimes wonder if they will still want to
work together.

(anonymous media lawyer)

Others in the film industry, from writers to

producers to executives, probably feel similar sentiments when they participate in the
process of getting an idea for a film from paper to the film set. It is often a long,
difficult, and strenuous process for all parties involved. Of course, the upsides are
significant. A carefully planned and well-executed film can be financially rewarding
and artistically satisfying.

Script Development Unpacked

All films start with a screenwriter’s initial idea or story concept. Producers, who are in
charge of raising money for a film project, frequently come up with ideas as well.
Ideas for stories can be original or adapted from plays or novels, which make up
approximately half of all Hollywood films. Once a story idea is firmly in place, the
negotiation process between the writer and the producer (or production company or
a studio) begins.
The writer hires an agent who represents him and plays a critical role in ensuring
that the writer’s interests are represented in the negotiation process. The agent also
ensures that the writer is paid appropriately in accordance with what intellectual
property rights may be worth in the future.

The producer can choose two options to move the project forward and begin the
process of attracting funders to finance the project: buy the rights to the story idea or
the material (a novel or play) from which it was adapted from outright or buy an
option of the film rights.

Buying an option of the film rights means that the producer owns the right to develop
the film but only for a certain amount of time. To be clear, the producer does not own
the rights to the film idea itself.

Rather, he is the only person allowed to develop it into a screenplay. He pays the
writer in smaller, agreed-upon installments throughout this period and also agrees to
pay him a significantly higher amount for all film rights once shooting begins. After
the terms are negotiated, the writer can finally start working on the screenplay.

Writers and producers try to establish a solid relationship. If they don’t,  the writer
could essentially lose the rights to the project. During negotiations, the producer
often requests, as a safeguard measure, that the writer either give or option the
rights of the film idea to him in order to guarantee that the writer does not suddenly
choose another producer.

This also enables the producer, if he thinks it is necessary for the development of the
film, to fire the writer and hire someone else.

However, filmmaking is very expensive and the writer will likely not possess the

large amount of capital needed to see his script played out on the big screen.
As result, the writers in effect need to give up most or all of their rights to the film for
it to be financed, developed, marketed, and distributed to cinemas. It is also the only
way they will get paid. To avoid this unfavorable situation, writers sometimes come
up with fully written screenplays on their own, called speculatives or spec. scripts,
and sell them to producers.

This gives the writer more leverage in the negotiation process because the producer
cannot hire another writer.

In general, developing a screenplay that is based on a novel, play or real-life story is

more straightforward than writing from scratch. The obvious advantage is that
everyone involved already knows the overall storyline and has a good understanding
of what the project will look like in the end. If the script is based on a novel, actors
can read the novel itself to better understand the characters and be prepared when
filming begins.

Producers, in turn, will have an easier time attracting the funding to develop the
screenplay and the production of the film. Additionally, adaptations typically are
based on previously successful and well-known works—the Lord of the
Rings trilogy is an excellent example. It is probably safe to say fans of novels or
plays would love to see their favorite works be made into movies. Writers, actors and
producers understand this perfectly.

They, too, would like to see the books, plays, or real-life stories they like made into
films, but they also understand the financial incentives as well: the fans of a written-
work will very likely go see the adapted film version. As a result, the odds are good
that an adaptation will be a financial success.

However, an adaptation is more expensive for a producer because not only does he
have to pay for the right (i.e., the option) to make the film, he also has to pay the
screenwriter to write the script.
Also, as noted above, buying an option places a time limit on the production. If the
producer does not complete the movie before the option expires, he has gained
nothing and has only lost money. In a situation like this, the producer only owns the
option to make the film, not the rights to the adapted work.

In other agreements, the writer ensures that the title of the film is the same as that of
his written work. This increases sales of the book when the film is released.
Sometimes the writer sells all of the rights to the producer for a certain number of
years before owning them again.

Script Development in the Context of the Film

Industry

Screenplay development is one part of the larger industry of filmmaking. Love of the
craft, of course, serves as the primary motivation for people to make movies, but, like
other industries, filmmaking is a market-driven business. Potential profit propels a
film’s development forward. Every person involved in a film project wants it to be
financially successful.

For this to happen, a screenplay must undergo a number of changes. The writer
(and sometimes a couple of others, such as the script editor) works on the script
itself, but by the time film is ready to be shot, the project’s funders, actors, directors,
producers and development executives also have had a say in what the script should
look like.

Funders, for example, oftentimes have a specific vision for a script and set of actors
and directors in mind. Conflicts over whether a film should include more famous,
well-known actors versus less-known actors can also arise.

Cultural trends and audience tastes, such as the current demand for zombie
movies, must also be taken into consideration. These and other factors help
determine which direction the script takes, who pays the writer or writers, and who
finances the production of the film itself.

Developing a good screenplay is a collective effort. A script will only be good enough
to make it to film through the process of constructive feedback and discussion.. The
reality of filmmaking is that there is no other way to see a script come to life on the
big screen.

10 things to think about when you

option your screenplay
Posted on February 2, 2010 by Chip Street

What does it mean to have your screenplay optioned?

A producer wants to option your script. Should you do it? What are the considerations?
Here’s one guy’s opinion.
Part I of II [Click for Part II: Eleven More Things To Think About When Negotiating Your
Screenplay Option]
Now that I’ve been through the option gauntlet a couple of times, I get asked about the
experience and the process. It’s a little humbling, cuz I’m just a lucky guy with one indie sale
and a few indie options, but I know how much I appreciate when I stumble across some good
first-hand info, and figured it would be a good idea to share what I know. So I thought I’d
gather my notes together here, in the hopes that it’ll prove useful to others. This is no
substitute for having an attorney, mind you… more on that later. But I wish I’d had this list.
Of course, I’m no lawyer, but I did pay one (a really good one, too!) to represent me in my
deals. I wanted to learn, so I was involved in the negotiation process, and reviewed each
round of revisions on the offers and eventual contracts, asked lots of questions, and took lots
of notes. I asked the attorney to mark up the contract with all the items of concern or
negotiation he could think of… then I had him go over them with me, and explain things to
me that I didn’t understand. I picked out the points I wanted to ask for, and removed items I
felt were over-reaching or I just didn’t feel like I needed.

I don’t plan on being so involved in future deals. But now that I’ve got a handle on the basic
vocabulary and have some sense of what it is I should be looking for, at least I won’t feel like
an outsider in my own negotiations.

Part I is the basics… what is an option, how to respond, and what to expect. Part II is a list of
negotiation points and terms that I’m very glad I know about now, and you might like to
know about as well.

PART ONE:
1 – What is an option?
Producer Bob stumbled across your script on your site, or at InkTip.com, or in a screenplay
competition, and has approached you with an offer to “option” it. What’s that mean, exactly?
Granting a producer an option means granting them the exclusive right to develop the
script… to try to raise the money to make it, get talent or a director attached, and otherwise
exploit the property with the end goal of making your movie. Any time within the option
period they can “exercise” the option, and buy your script for an agreed price.

Sounds great, right?

Depends.

2 – Should you take the option?

Getting optioned is exciting. But it doesn’t mean your film is going to get made… it means
someone wants to make your film but doesn’t have the resources yet. If they did have the
resources, they’d buy it and make it, right? So what you really want (short of actually selling
the screenplay) is to have it optioned by someone who has a high likelihood of getting it
made. Because while having a script optioned is great (and it is great, don’t get me wrong)
having a script produced is even better. Not just for your ego, but for your career.
Remember too that your scripts are your product, and have value. They’re an investment for
you, and like any investment, they should be working for you. I assume that you don’t just
write them and stick them in a drawer… you show them to people, put them into contests,
post them on screenplay sites (like InkTip.com), right? You want them out there representing
you, if not to get sold, to at least be working as writing samples.

But during the time the script’s under option, you’re likely restricted from any further
exploitation of your own. That’ll probably include submitting it to any more contests, and
certainly means not showing it to any other producers. When your script is under option, it’s
“off the market” and is no longer working for you. Now the option has to be working for you,
by being more valuable, more likely to lead to production, than having the script “on the
market”. So, you want it optioned by someone who’s really got the goods to make things
happen.
3 – It’s okay to say no

If you’re approached by an unknown producer with no resources, no previous credits, no

financing and no connections, and thus a limited likelihood of getting to production, it’s okay
to say no. Your script (assuming it’s a good script, and of course it is, right?) may be more
valuable to them than they are to you. If you option to this producer, your script may no
longer be working for you anywhere, either inside or out of the option. That does you no
good at all.

But you don’t have to say no. There may be good reasons to take said chance with Mister
unknown resourceless producer… more on that later.
4 – Get a lawyer
If you’re considering taking the option, let me say this first:

Get a lawyer… not just any lawyer,  but an entertainment attorney. I promise you, they will
handle things you never dreamed would need to be handled. They will ask for compensations
and protections that you didn’t know existed. And you will be better off for it.

Second, partner with your lawyer. I’ve heard people complain long and hard about how their
lawyers screwed up deals for them, lost them money or projects or investors. Your attorney
works for you… they’re the pro, don’t get me wrong, and avail yourself of their wisdom, but
be sure you’re involved enough to sign off on what they’re asking for. In the end, if you let
your attorney ask for too much and screw the deal, it’s on you.

Where do you find a lawyer? I can only tell you how I found mine. My first option deal was a
no-lawyer friendly deal with a producer I knew from a previous film (I was an art director). I
signed an option contract that looked fair to my unschooled eye (and it pretty much was), and
it ran its course. When the producer wanted to renegotiate an extension, I took that as an
opportunity to look for an entertainment attorney, because I figured it would be easier to find
a good one when I could say “There’s an offer on the table… can you help me?”.

Then, I reached out to other screenwriters I know, asked for references, and was
recommended to a great attorney in Beverly Hills. I was able to contact his offices, reference
this other writer’s name, and say “So and so referred me to you. I’ve got an offer on the table.
Can you help?”

The short answer, I guess, is network for recommendations.

5 – Why do you get paid?

So if they’re not making your movie (yet) why do you get paid?

Your script is Intellectual Property (IP), and he with the best IP wins. No script, no movie.
(Well, that’s not entirely true… plenty of films go into production with no script, but they’ve
usually got big stars or big producers behind them. Iron Man comes to mind as a recent
example…) IP has inherent value, and potential value. The inherent value is that it’s legally
defensible property that you own and control the rights to. The potential value is, of course,
what its resulting film (and all that might go with that… merchandise, novelizations, sequels,
serializations, TV series, etc.) will be worth.
When you option the script to a producer, you’re transferring your rights in the IP to that
producer to use as her own. It’s no longer yours for the period of the option… it’s now an
asset in the producer’s portfolio. Even if the film isn’t made, the rights to that asset — control
over the potential — are of value to the producer. Why? A producer with “a portfolio of ten
good producible scripts she’s got exclusive rights to” is in a stronger position with potential
financiers, studios, production partners, than is a producer with “no rights to any scripts.”
Make sense?

Because you’re giving up an asset with value and taking it off the market, and “loaning” the
value of that asset to someone else, you should be compensated.

6 – How much will you get paid?

Your option contract should include at least two numbers: the option price, and the purchase
price.
The option price is what you get for giving the producer rights to your IP, and taking it off the
market. The option price is traditionally 10% of the purchase price, and is yours to keep no
matter what happens.

The purchase price is just what it sounds like: at some future point defined in the contract,
should the producer raise the funds and resources to make the film, she will  “exercise the
option” and buy the script from you. This should be prior to the start of principal
photography, but could be another negotiated date.

The option price (what you’ve already received) may be applied toward the purchase price…
say the purchase is 50K, and you’ve received 5K as the option price (10%). When they
exercise, they’ll give you the other 45K. Should they never exercise, you keep the 5K as
compensation for being “off the market”. But again, this is all negotiable.

So what is the purchase price?

That’s the trick, isn’t it? If you’re in the Writer’s Guild (WGA), I believe the union minimum
right now for a feature script is in the neighborhood of 76K. Of course, the WGA does
understand that small movies can’t take that hit, and they’ve got low-budget agreements for
those kinds of productions. Ask the WGA for more info – they’re pretty accessible folks,
even for non-members.
I’m not currently WGA, and I’m assuming you’re not either. So what do we ask for?

One rule of thumb says the script should account for about 3% of the budget… so if your
script is a little indie film that’s being shot on weekends for 50K, figure $1500. A 2MM
movie? Shoot for a $60,000 purchase price. Find a balance, and don’t cripple the production
with an unreasonable percentage. Be a partner, and an asset, not a financial liability. Instead,
negotiate those alternative compensations. Wouldn’t you like to have owned a little backend
piece of Paranormal Activity?
7 – What about those “dollar options”?
Again, if you’re in the WGA there are restrictions on how little you can accept… but we’re
not WGA. So we’ve got the freedom to strike any deal we want.

The producer may ask you to option your script to them for very little or no money, and while
many writers may disagree with me, I don’t think that’s necessarily a bad thing. There are
good reasons to take low dollar or free options, especially when you’re early in your career
— so long as you’re confident that the producer has a reasonably good chance of reaching
production, or you’re otherwise going to get some good value and experience from the
option. There’s value in getting the opportunity to work with certain people, for instance, or
in being allowed to participate and gain experience in a production role.

If you choose to take the dollar option, just bear in mind that you should be reimbursed for
that additional concession. In addition to your purchase price, consider negotiating for other
compensations, like backend points, or a higher purchase price, or box office bonuses, a first
right of refusal on all paid rewrites, the sequel, remakes, etc. Or consider retaining some or all
of other rights in exchange for the dollar option, like the novelization, video game, or
merchandising rights.

Or at the very least, if there’s little or no money up front, shorten the option period. Mitigate
the “off the market” time you’re willing to endure for zero dollars.

8 – How long will the option be?

Options run 6-12 months (usually). At the end of the option period, the producer may have an
“extension clause” they can exercise, to get another 3-6 months or more. But if they do, there
should be another payment involved.

At the end of the extension, if they really want to hang on to the script, they can ask you to do
another extension, or renegotiate the option, or whatever… but then it’s up to you.

All of these numbers are negotiable… how many months, how many extensions, how much
additional payment. You’ll want to balance your desire to work with the producer, the time
off the market, the likelihood of production, and make a deal you can live with… because
once you sign, you’re obligated.

9 – Will they change my script?

In a word, “Yes”.

Every script, by every writer established or new, will go through changes. During my first
option, among many other changes, all the characters had their genders reversed, and (I kid
you not) a scene with a giant flying corncob was added. Yup. It all made sense to someone
somewhere, and those changes, if they appease the right people, are probably bringing your
project closer to production. I mean, come on, people don’t add flying corncobs for simply no
reason, do they?

Don’t be married to your script. Filmmaking is a collaborative artform, and your option
makes you a part of a team. If you’re so in love with your story and will suffer heartache (that
money or a produced credit can’t solve when it gets changed), then put it in that drawer and
don’t take it out till you can make it yourself, your way.
Negotiate yourself as the writer of any rewrites, polishes, and punch-ups that might be
necessary. Maintain some creative control.  Especially if you’re doing one of those dollar-
options.

But don’t underestimate the value of having more eyes on your work. There’s a lot to be
learned by seeing what another writer does with your stuff, and maybe (just maybe) you’ll
like the experience. Maybe, just maybe, you’ll end up sharing credit with a writer of note.
And that’s not a bad thing.
If you can, negotiate to protect your credit. Look into the WGA guidelines for which credits
mean what. Understand that if WGA writers are brought on to massage your work, they’ll be
treated like WGA writers, possibly to your detriment. More on that in Part II.

And this is important – negotiate the rights to any changes or alternative versions created by
the producer or on behalf of the producer during the option period. In other words, if the
script reverts back to you, so should the rights to any changes made to the script while the
producer had it. Otherwise, you’ve got your script back, but the producer potentially still has
rights to their version… and now you’re in competition with another version of your script
that you don’t control. That’s not a place you want to be.
*EDIT* I received further clarification on this from a well-positioned Hollywood exec and
consultant. Check out the post “Who Owns The Rights To Your  Screeplay Rewrites“.
10 – So why option?

If you were a producer, wouldn’t you rather spend a little money to guarantee your exclusive
rights to a great script, and spend a year testing the waters with financiers, production
partners and distributors, than buy a script outright for ten times the money only to discover
you can’t gain any traction?

As great as you and the producer might think your script is, the production environment is
fickle. Deals fall apart all the time. Movies go in and out of production like fashion and fads.
The option lets you and the producer partner together with limited liability and obligations
well defined, to try to bring your project to the screen. A carefully written and executed
option contract makes for good and honest business partners… and that’s what you are, in the
end.

So here’s my philosophy. Enjoy the option for what it is: a vote of confidence in your hard
work, and an opportunity to learn and network.

Dream about the option turning into a sale and a produced script… and plan for it in your
option negotiations. But from a practical standpoint, consider the option the endgame. The
option is a great opportunity to learn more about the business, to meet new people, and make
new connections. Take full advantage of it (as much as the producer will allow) and be a
participant. Producers (many of them, anyway) want to work with writers who do more than
just deliver a script and wait for a check… they want a creative partner. Negotiate your right
to rewrite and polish, and attack it with everything you’ve got. Prove yourself a team player
and a saleable writer.
This industry is all about relationships anyway. If the movie isn’t made, you’ve spent a year
on someone’s radar, in this producer’s office, on the phone, meeting her contacts, and
showing yourself to be a professional who delivers and is willing to work and play well with
others. You’re in her rolodex, and maybe she’ll refer you to her pals.

That may just prove to be payment enough, when it leads to your next big deal.

Okay, so you’ve gotten an option offer, you’ve thought about the 10 things, and you
still want to do it. Now it’s time to talk to your attorney, and make some decisions
about the negotiation points. Your attorney is going to toss some notes back to you
for consideration, and chances are these things are going to be included. (There’ll be
lots more than this… from simple typos to wholesale rewrites. But these are the top
contenders for “things I think you should know”.)
Ask your attorney to spend some time with you to explain what they mean in the
context of your deal… but here’s my take, based on my experience.

DISCLAIMER: I shouldn’t have to say this, but: I Am Not A Lawyer, I am not offering
legal advice, and none of the numbers used as examples here should be considered
recommendations or as examples of my personal previous contracts (which are

none of your beeswax   ). They are provided as  hypothetical examples only.
Talk to your own attorney about your particular deal.
PART TWO
Equity
This is a freebie. Either that, or this is really a list of 12 more things to think about.
But I use the term “Equity Position” or “Equity Participant” frequently, and I want to
make sure you know what that means before we really get started.

Equity (as defined by Wikipedia) is “the value of an ownership interest in property,

including shareholders’ equity in a business”.
It means you’ve got an ownership stake in the property, and participate in its upside.
When the property increases in value, your piece of it increases in value. You’re an
investor.

And of course, should it be worth nothing (and many an indie film is worth just that),
so then is your stake.

Your share of ownership in the property is generally defined as a percentage, or

points, which brings us to: