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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.
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