From a financial point of view, the contract is qualified as a financial option and can be evaluated by the application of an analysis of the actual options.    You need to carefully consider your option agreement, understand what rights you will grant and how the agreement will work. Talk to a close friend who understands this stuff, or you can always draw the unique services of a lawyer in The Obd Role. There are some catches and red flags that you need to note before passing on your script to someone. From the producer`s point of view, an option agreement gives him the opportunity to stick exclusively to a scenario for a period of time, without having to spend a lot of money in advance, while he tries to start the project. If the producer cannot make the film, all the rights to the script go to the author, then the producer at least worked hard, but did not go bankrupt. It is understandable that some authors and screenwriters are reluctant to part with the audio-visual adaptation rights to their project. One possibility is to soften the agreement by offering an advisory role to the author. If that makes them happier, it could also be presented as an executive producer position. I would not offer it in advance, but only if the author is about to leave. When negotiating this role, make sure that the author is not able to interfere with your project: you are there for consultations and you should not need your consent for anything that lets you go beyond the option itself. As a general rule, there are two option rights and periods, i.e.
the first option is the amount of X for Y months, with the option to extend additional Y months for the amount of X. These are generally referred to as „second option commissions“ for the „second option period.“ You have until the end of the last option period to „exercise“ the option. In general, this happens when you have all the funding together and everyone is ready to shoot. So how much money can a writer expect from a payment option? The amount of an option can vary considerably. It`s really a negotiation process based on many factors, including the author`s record in the industry and the potential budget of the film. Producers will ask themselves a series of questions such as: is this the author`s first screenplay or has the author already sold several scripts to the studios? What would be a fair payment of options if the film`s budget was $1 million versus $50 million? How realistically can we afford to pay the writer? The term is often used as a verb in Hollywood. For example, „Paramount received the news from Philip K. Dick.“ The option agreement also provides for an „option payment,“ i.e. the amount that must be paid to the author in return for giving the producer the privilege of using the author`s screenplay for development purposes. Here too, this could go, depending on the bargaining power of the different parties, a very small amount (for example. B, a few hundred dollars or even a dollar) to a larger payment (tens of thousands of dollars). If the other party wishes to extend the option period for an additional period, additional payments would be provided for the author.
In most cases, this additional payment is negotiated to be more substantial even when the first payment is low. The above rules generally apply to the option contract for a finished play between playwrights and theatre producers. A key difference is that the playwright may refuse to have his product modified in one way or another without consent and participation. If you are negotiating a supporting role for the author or screenwriter – in addition to the one that gives you the option – you can include it in the option agreement itself, but personally I prefer to define additional roles in a separate agreement. Indeed, two agreements clearly show that these are two distinct roles and negotiations – the option agreements are already quite complex and the inclusion of the author`s supporting role could make things more complicated.