When Opportunity Knocks
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So there you are. Knee deep in an alternate universe, seeing things no one has ever seen before, hearing the voices of characters speaking through you as though by telepathy. Creating, or as normies call it, writing. All of a sudden, your computer chimes with an incoming email. You ask yourself "what could this distraction be," as you come crashing back to earth. You open your eyes, and there, where you normally see newsletters and junk, an email from an unknown person awaits your attention. This unknown person is a producer. He read your script, and he likes it. He asks where it's been shopped or whether it's available, or maybe he introduces himself first, tells a little bit about his background and what he wants to do with his next project, before asking a question. Or perhaps he just hits you with the opening salvo of an option negotiation:
"How much are you expecting to get for this?"
This is the moment you've been waiting for, right? Acknowledgment, recognition and opportunity, all rolled up like subtext into a couple sentences. This could turn into money, or more opportunities. This could be the big one, or at least a fun ride. Then again, it could turn into another dead end. Do you take the offer? What if you accept a low offer and then later find out someone else would have paid you more? What if you say no to a low offer, and then two years later the producer's next movie is a massive success? What if the negotiation stalls out? What if the negotiation goes well but the option goes nowhere? What if the option goes well and the movie gets made but the director bungles it? What if the director does a great job but you get hit by a train on opening night? Why are you thinking through all these what-if scenarios like a writer? Why aren't you seeking advice?
Now I do happen to know a thing or two about this process, and not just because I work at InkTip, where I've seen over a thousand options take place and a hundred plus feature films get made. I've also sat on both sides of the negotiating table; as a writer, the first option offer I got was literally a hand-written deal memo on a bar napkin. A better and more recent example took place just last year, where as a consultant to S&R Films, I found a script on InkTip, pitched it to the producers, and then was given the task of negotiating the option with the writer. Everything went swimmingly, and I later pitched it to Richard Gabai, who signed on to direct the project. So I've gone from negotiating a contract on a napkin in a bar (that deal went nowhere, of course) to being involved in a producing capacity on a feature film (on which cameras are literally rolling as I write this article). But still, when writers ask me for my expert opinion, I really have to say I'm not qualified to give any advice.
There are a couple obvious reasons for that. First, and most importantly, I'm not an attorney. Second, and most obviously, I'm not privy to the details of the offer. And no offense, but I'm not going to read the contract. Ever wonder why attorneys charge so much money? Because contracts are boring! Still, I can share a little insight with you on the negotiation process.
Let's start out with a simple overview. In all likelihood, you're going to be negotiating an option on your script, not an outright sale. An option refers to a contract which gives a producer the option to purchase your script within a certain period of time. Producers tend to offer options rather than outright purchases because they need to raise money and attach talent to a script, and they don't want to pay a full purchase price in case they aren't able to get it set up. So they need to be secure knowing they can put a lot of work into the script without worrying about losing it all to an unethical colleague (and there are a few of those in Hollywood, believe it or not). Think of it this way, Bob options your script and takes it to another producer, Dick. Dick has a lot of money, but he's known for being frugal at the expense of others. In fact, people just call him Dick; his real name isn't Richard, if you get my drift. But Bob was smart enough to option the script before showing it to Dick, so Dick can't call you up behind Bob's back to try and buy it off you. So Bob is secure as he goes about trying to make a deal.
Now let's say you optioned it for six months for fifty bucks against ten thousand. That means that, if your script gets made, you get ten thousand dollars. If Bob wants to exercise his option to purchase the script, he has to send you the remaining money within six months, or when the film goes into production. If he does that, he owns it. After six months, if he hasn't exercised the option, you get to keep the option money and the script is yours again to sell to whomever.
If this all sounds overly simple, that's good. A lot of good writers don't even know what the term "option" refers to because no one was ever blunt enough to explain it to them, and I don't want the rest of the article to be a whole lot of mumbo jumbo to them. In fact, I'm not even going to get into installments or monkey points, I just want to make sure everyone is comfortable with the basic concept of an option price against a purchase price. So back to the topic, say you just got offered an option on your script. Congratulations! The offer probably isn't everything you hoped for, but it almost never is. So you're going to enter into a negotiation. Here are a few things you should be thinking about before you take the next step:
Make sure you can establish chain of title. This refers to documentation proving that you own the script and have the right to sell it, and you should have this ready before you even pitch your script or post it on InkTip. Producers actually have to take out insurance on a film in case someone later claims to own the rights to the script or the underlying story, and in order to qualify for that insurance, they have to prove chain of title. So the very first thing they're going to ask for is the copyright number. And no, sending it to yourself in the mail is not sufficient; some producers won't even accept a WGA registration. Register your script with the Library of Congress. Keep a list of everyone who's ever made an offer on it, and anyone with whom you've ever entered into any sort of shopping agreement or option contract on the script.
Write down what you want and what you're willing to settle for in the negotiation. You should be thinking in terms of money, rewrites, and credit. In a best case scenario, if you're new to this, you might ask for WGA minimum, a first pass/rewrite during the development process, and the first writing credit. In a worst case (but still acceptable) scenario, you'll sign the script away for a dollar and someone else will get paid a lot of money to rewrite it, but at least you'll be named as the writer in the credits. Under no circumstances whatsoever should you ever sign away the writing credit.
Never say yes to an offer until you've talked to an attorney. That's because if you agree to an offer before signing the contract, you might be committing to what's called a verbal contract, and a verbal contract is legally binding, albeit hard to prove. So when someone says "do you agree to these terms," say "this sounds good but let me talk to my attorney and get back to you." Or just tell them to send it to you in an email. Even if you don't hire an attorney, this gives you a little bit of time to breathe and think it through.
But what if they don't offer an option, what if they just ask for permission to take it to their investors, or partners, or the networks, or _____ (insert noun here) instead? This usually leads to a shopping agreement, which is kind of like an option in the same way that chatting on the internet is kind of like going on a date. It's still a significant success, and not using it to market yourself is a waste because it conveys the same message to producers as an option or a hire: you're a good writer and they should be looking at your work. Realize, however, that many producers won't want you to publicize a shopping agreement because they're essentially relying on everyone's ignorance of each other to give them some sort of short term protection. But never agree to let someone shop your script without knowing where it's being shopped; this can really burn you later if you try and take the script someplace where it's already been read.
The whole point of the negotiation process is to arrive at a point where both parties agree to and are happy with some sort of arrangement, and some people really loathe this process. (Some producers hate it so much, in fact, they just make "take it or leave it" offers where the writer either accepts the first offer or never hears from them again.) But if the conversation goes well and you arrive at an agreement, write everything down immediately and email it as a deal memo to the producer. This will help smooth over any misunderstandings while saving a ton of money on contract drafts. Then if everything else goes in order, the producer's lawyer will draft the contract, your lawyer will inspect it, and you'll sign away the rights to your script.
You aren't done yet! Within thirty seconds of signing that contract, before the ink is dry, you should be announcing it to the world. Update your resume, post it on facebook, get it in the InkTip newsletter. One of the most important benefits of entering into any sort of option contract or shopping agreement is the publicity, because producers are more likely to read your next script or hire you to write their next project when they see their colleagues and competitors are validating your work. Check out this recent list of writers who've optioned scripts through InkTip, and if your name is in there, link to it in your resume. Mention it when pitching. Don't ask the producer for permission to mention your success; no producer should ever have a problem with you mentioning that a script you wrote has been optioned. Remember, the producer optioned your script, not your career. Keep marketing yourself!
Here are some rules you should abide by throughout the negotiation process: Never send more than one reply to an email. Never reply to an email when you're upset or distracted; you can always say "something came up, I'll get back to you tomorrow." Always reply to an email or return a call within a business day whether or not something actually comes up. If you're in talks with someone else on the same script, say so when an offer is made, but never divulge the exact terms or details of one producer's offer to another producer (so if someone asks how much so-and-so offered you, reply that you can't share that information, but you can divulge that it's higher). Be ready to walk away if the producer's best offer is below the minimum that you're willing to accept, but walk away with a polite and professional decision like "not at this time, but I hope we can work together later." Always be courteous and polite in all your communications, because the producer you're talking to now might be your best friend later - and he might be your worst enemy, too. Remember that you wrote the script, so it's your success. And success begets success; never sign a contract which states you aren't allowed to publicize your success. Always run a contract by an attorney before you sign it. And once you sign a contract, abide by the terms of that contract. Producers have told me stories about writers who attempted to renege on contracts, and those producers never even knew the writer they were talking about. These stories serve a purpose: they make it harder for unethical people to get ahead. Don't be that unethical person.
And this one almost goes without saying, but never fall for a pay to play scam. I know a writer who met a "manager" through Craigslist who talked him out of his life savings. She said it was to get "first money in" on a feature film so she could entice investors to come on board. Of course, once he sent her his money, she disappeared with it. (Incidentally, the very first thing she told him, when she made her "offer," was not to tell InkTip about it. That's because she knew we'd try to talk him out of it.) She was incredibly convincing and persuasive, but the whole con could still have been easily avoided if he had just remembered that producers are supposed to pay him for his writing, not the other way around.
Are you still with me? Whew! Listen, if you think reading an article on the art of negotiation is hard, try writing it. I want to start responding to specific questions from writers in upcoming articles, and eventually I want to write a book that will be very much in the vein of these articles. So I need some questions. Any topic will do, from screenplay structure to the meaning of life. Email your questions to me at email@example.com with "Question for Jared" in the subject line. Rest assured names will be changed to protect the innocent.
Since I don't have any questions to answer yet, I'm just going to share a few related anecdotes with you. Many years ago, I got one of the most enthusiastic phone calls of my life. A producer read my script and thought it might be the most high-concept, marketable story he'd ever seen. He raved about it, said he loved the tension, the dialogue was awesome, and though the script needed some work, the characters and concept were extremely marketable. Now I was savvy enough to realize that a negotiation was already underway here; he was just buttering me up to bring down my bottom line, and sure enough, when he made his offer, it was low. But on the surface, it looked like a good opportunity; here was someone who loved my script and was able to get it into the hands of some pretty big celebrities. It really looked like a good opportunity. Still, I ran it by an attorney.
My attorney pointed something out in the contract that I didn't recall from the negotiation process; there was a clause in there stating that the rights to the script would revert back to me at the end of the option period, but since the producer would have already invested a considerable amount of money and time in developing the project, the rights to the characters would remain his in perpetuity. In a nutshell, that contract gave the producer the right to re-write the script and make it without paying me for it or even giving me a writing credit. My attorney said he could negotiate with the producer for an hourly fee, but he didn't advise it since the producer was such a shyster to begin with. I'm sure you can guess what I decided to do next.
Writers aren't the only ones who need negotiating skills. A friend of mine once took a gig producing a feature film for an independent production company; he took their script, auditioned and cast a group of actors, hired a crew, built a set, directed and edited a short film, made copies of that short, sent them out with a prospectus to investors from the company's previous films, sold and signed some of those investors, put together the contracts, secured a completion bond and all the necessary insurance, and he did all of this without a contract. It took about eight months, during which time he maxed out all his credit cards, but he kept copies of all his receipts. Then, when he was done, the production company gave my friend a check for two thousand dollars. Of course he'd spent a lot more than two thousand dollars already; he asked how could they only pay him two grand for all that work? They replied, "we never agreed to any fee in writing, so we don't really even owe you anything; you got some experience and a producing credit, and the two grand is just a token of our appreciation." At least it was enough to cover his moving expenses. My friend moved back home, where he lives with his parents and manages a fast food joint.
Here's another story: a director once hired me to write a script about a gang of crystal meth cooks. He needed to work within a budget of $1.2 million, and the WGA Minimum Basic Agreement (MBA) at the time for a script in his budget range was about $32K. Now this director was a Muslim who believed in sharing wealth as a religious principle, so he opened with an offer above the MBA - $50K, to be exact. I'd never been offered more than minimum initially, and he knew that, so he was shocked when I countered with a request for $32K instead. Yes, you read that right, I actually talked him down on my own fee. That's because I knew the company he was working with. I knew they were developing a slate of films, and I knew that the least expensive of all their projects in development would most likely get greenlit while all the others would get stuck in a holding pattern. And I was tired of working on films that didn't get made, I wanted this one to go to camera. Unfortunately, despite all our efforts to cut costs, the film still didn't get made. But the producers loved me, and my consolation prize is knowing I can take a script to them any time.
One last story: a producer I know discovered an amazing script a couple years ago. She'd been looking for a feature-length script to set up as an MOW (movie of the week, or TV movie) at a cable network, and she was surprised to find this one was already production ready. It had all the act breaks in all the right places, and when she did a breakdown, she found it worked perfectly within the network's budget parameters. So she asked the writer about the script's history; he replied that it was an original idea, not based on a true story, and it had never been under option before. He'd had a shopping agreement with a producer once, during which time it had undergone extensive development, which in turn explained how the act breaks and budget were all perfect for the network. But that was just a verbal agreement, and as far as he knew the producer never really took it out. So no one could claim any rights to the script or the underlying story.
Thinking she was clean and clear, this producer took it to the network, and boy did she get burned! It turns out the producer who'd had the shopping agreement had already taken it there, and they'd already passed on it. Which was more than just embarrassing to the producer; she'd taken up a chunk of someone's day to present material to them which they'd already rejected, and she found it hard to get another meeting with them after that incident. Now we can argue about whose fault that was for not really establishing chain of title, but arguments aside, the end result is still the same. That writer's name is in the network's database, and they aren't exactly enthusiastic about reading his scripts anymore. And he isn't even aware of this fact; it's not as if they're going to send him a formal notice of persona non grata.
The point of all these anecdotes is to illustrate the most important principles to remember when negotiating your stake as a writer: hire an attorney; get everything in writing (or at least send email confirmations after discussions, and save those emails); remember that you're negotiating on a step forward in your writing career, not just a dollar amount; and last but not least, know where your scripts are going and where they've been. Keep these things in mind, and you'll be ready when you get an email from a producer. And now you can go back to creating worlds and telling stories without fear or regret.
Email your questions to me at firstname.lastname@example.org with "Question for Jared" in the subject line.
Jared Wynn has conducted thousands of interviews with producers, agents and managers, and has amassed in-depth, critical information on how to successfully market a screenplay.