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Option
Deals -
 When
a company commits to bringing your TV project to market, they will propose an
option agreement that gives them the exclusive right to sell your show to a
network for a limited period of time. Having a script, book or personal life story-rights gives production
companies more leverage and substance during the development and sales process, and as a result they are typically willing to
pay more up front when optioning these types of properties. Even a treatment
written as a series outline or movie will bring more to the table because it is
usually regarded as being more substantial than a reality-based "idea" that can
be interpreted in very loose forms. The good balancing factor is that more
people from outside the TV industry break into the business from selling a
concept for a show rather than an actual property. More money in scripted, but
more sales in original concepts.
Option deals for scripted
projects are essentially the same as for reality-based projects,
but fees and purchase prices are considerably larger in scripted. Financial participation as
well as participation in the development and production is negotiable to a point
depending on your experience within the industry and what you bring to the table
in terms of the marketing of your show.
As in any industry,
there are a variety of forces and factors that give shape to the legal structure
and content of any deal made. A television Writer or Producer who has an
established track record is likely to receive a more lucrative deal than someone
with little or no experience, and most often will be given more involvement in
the actual production of the show. However, there are industry standards
regardless of who you are.
The following is a conservative outline of what should be in an industry
standard deal from a production company making you an offer:
[Disclaimer: This is in no way given to you as legal advice or
guarantee of what may or may not be offered to you by any company or person you
engage in negotiations with. We strongly advise that you have an entertainment
attorney negotiate any offer made to you, as there are many variables and
strategies for securing the best possible deal.]
Option money:
This is an upfront payment made to you by the company who wants to produce your
show. It is token money, and usually ranges $500 up to appx. $10,000. It is
non-refundable to the company who pays it to you simply to retain the exclusive
right to further develop and sell your show to a Network. Some writers
will agree to a free option simply to benefit from the opportunity
of a top production company shopping their show to networks, and to improve
their resume' as a writer/creator of shows. Most production companies will have
no problem offering a nominal amount of money upfront. At the end of the option period,
the company will sometimes have an option to extend, which entails paying you a
bit more for the extra time they are requesting to retain your project.
If the
production company does not sell your show to a network then the show returns to
you, the creator and owner. You can continue to shop your show to other
companies. Many writers have had shows that have never made it to production,
but have made a significant amount of cash off of repetitive options. If the
company does sell your show to a network, then you will be paid a "Purchase
Price" that will have been pre-negotiated.
Purchase Price (or Set Up Fee): This is a lump payment
to you, the creator of the show and/or owner of the script or property, at the time of the production company
"exercising your option". In other words; you are paid this money when
the show is sold to a network. The amount is significant and varies greatly
depending upon your negotiations with a buyer. At this point the show no longer belongs
to you and is the property of the production company who sold the show, and
eventually the network or distributor who puts it into production.
Participation In
Profits: As the
creator of a show it is customary to retain an interest in profits derived from
the production and distribution of that show. This is paid to you by the
production company through your attorney and is usually a nominal percentage of
the fees paid to the production company by the network or distributor as the
show is produced and televised. Again, the amount of financial participation in
this area varies and can often be negotiated as leverage against any purchase
price you agree to. Additionally, it is standard practice for your attorney to
retain the right to "audit" the accounting of the company paying you
to ensure that the percentage of profits you agreed to is the true percentage
you are paid.
On-Screen Credit:
For reality-based projects, companies and
networks will acknowledge the creator of a show produced, usually with a
"Created by" and "Associate Producer" or "Consulting
Producer" credit. For scripted projects it is more often a "Written by" or
"Story by" credit in addition to a negotiated producer credit. As such, you should be able to negotiate a standard fee
associated with your credit, paid per episode or week of production. These are all negotiable.
- TvWritersVault.com
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