Standard Deal Points &
Expectations When Selling A TV Show
When a company commits to bringing your TV project
to market, they will propose an option agreement
for negotiation that gives them the exclusive right to sell your
show to a network for a limited period of time. More
people from outside the TV industry break into the
business from selling a concept for a show rather
than an actual longform property (script, book,
etc.), so its important for us to share what one may
expect when selling a concept in order to strategize
and prioritize your negotiations.
Option deals for scripted projects are essentially
the same as for reality-based concepts, 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 provided 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 or Free Option
: 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
launch their career 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 requires additional
payment 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.
: This not always
included in a deal, but may be negotiated. It is a
fee paid to you, the creator of the show at the time
of the production company "exercising your option".
In other words; you are paid this money as a bonus
when the show is sold to a network. The amount
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.
: This is the main
source of revenue derived from a series. Typically a
production company will offer the creator/producer a
percentage of the locked per episode budget.
Whatever the Networks sets as the budget per
episode, you would receive a set percentage of that.
Anywhere between 2 and 5% is standard, and up for
negotiation. Budgets vary greatly depending on the
content of the series and the network producing the
show. Major Networks and Prime Time shows pay more.
However, when you're looking at long-term financial
gain, you hope for a successful series that runs
multiple episodes for multiple seasons on any
network or cable network at any budget.
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.
: 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.