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Buying Or Selling a Screenplay

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Buying Or Selling a Screenplay Intellectual Property& Technology Law Journal Edited by the Technology and Proprietary Rights Group of Weil, Gotshal & Manges LLP VOLUME 30 • NUMBER 11 • NOVEMBER 2018 Let’s Make a Deal: Buying or Selling a Screenplay 30 By Michael DeBlis August ll movies, television series pilots, and features Selling Your Original Idea Abegin with an idea. Only once that bare bone is More often than not in today’s market, movie ideas 2018 fleshed out with plot, theme, and character does that come from works with an established audience, such idea show potential as a movie. as comic books and old television shows. It is increas- A writer once told a beginning screenwriter that ingly rare for an original screenplay, known in the 8 the vast majority of screenwriters only finish one business as a “spec,” to make it to production. Studios screenplay, and out of the vast numbers of those writ- are interested in things that people want to see. If they ten, only a very few manage to combine good luck, already know and love the story, they are more likely hard work, and talent to complete a film and show it to decide to put money into the project. to the viewing public. A screenwriter with a spec script will, through an agent, manager, attorney, or their own determination, convince a producer or studio to put the screenplay A writer once told a beginning into production. This has its own byzantine pro- screenwriter that the vast majority of cess, but in the end the writer will pitch the idea screenwriters only finish one screenplay, to someone with the power to say yes to beginning and out of the vast numbers of those production. written, only a very few manage to combine good luck, hard work, and talent Adapting, Another Story to complete a film and show it to the If a writer wants to write a screenplay based on a viewing public. favorite old book or forgotten story from the news, the writer will have to obtain the rights to that story. The path from idea to produced work is long and If a producer agrees to move forward with produc- difficult and involves many steps along the way. tion, the producer obtains the rights to the story and the work produced from it. Michael DeBlis is a partner in DeBlis Law, where he specializes If a filmmaker wants to make the movie, the film- in tax compliance and entertainment law. He may be reached at maker also will have to obtain the rights to the script [email protected]. and the underlying work. Sometimes an independent producer, filmmaker, The filmmaker or producer will have to assign or actor will like a screenplay and want to go for- the rights to the production company or studio ward with making the movie. Yet for various rea- whether there is an option agreement in effect or sons, they may not be ready to start. They may need the transaction is a sale. The new producers will in to obtain financing or may have scheduling con- turn hire the filmmaker or producer to work on the flicts. In this case, they will ask the screenwriter to project. consider an option deal. Clean Title and Clearances You Have Options Often scripts go through many hands in An option deal is similar to the concept of mak- Hollywood without ever becoming movies, even ing a lease agreement on a luxury car. The producer if there is significant interest from top talent. For offers the writer a fee at a fraction of what the script example, a planned live-action version of the is worth in exchange for temporary exclusive right Japanese animated film AKIRA has been attached to purchase the script. The agreement obligates the to dozens of stars and several writers and directors. seller to sell to the purchaser at a price specified in the agreement. However, the producer would be under no obligation to purchase the script. Often scripts go through many hands in Hollywood without ever becoming movies, even if there is significant An option deal is similar to the concept interest from top talent. of making a lease agreement on a luxury car. If a studio finally decides to produce it, the stu- dio’s legal staff will have to conduct a thorough The option deal gives the producer time to find review of the chain of title to make sure the studio financing or finish what they are working on. The has all rights under its control. If production pro- option can last for a reasonable period, usually a ceeds without a title search, the studio may reserve year. The parties may agree to renew the option. If the right to cancel production if it finds a defect. not, when the option period ends, the rights will A clean title is among the conditions precedent revert to the writer. to forming the option agreement. These terms The producer will obtain the rights to the screen- usually must be met before the purchaser agrees. play as well as the rights to the underlying work An attorney will check to see if the conditions and the right to start work on a sequel or serialized are met. novel based on the screenplay, as it is likely that the The script clearance report will satisfy the screenwriter has already obtained the rights to base a buyer/optioner that there are no encumbrances on visual work from the owner of the underlying work. the script, things that could result in a lawsuit or A producer can also option a book or other story ending production all together. In addition, if the that they would like to use as the basis for a film. script is non-fiction and it is portrays the subject The producer will have to determine whether the or subjects in an unfavorable light or makes state- author has the rights to make a film from their work ments that may not be true, the subject or subjects or whether the publisher has purchased the rights could sue. from the author. All else remains the same in an option deal whether the agreement is with a pub- Unforeseen Circumstances—Force lisher or author. Majeure Force majeure is a concept in law regarding some Attachment circumstance that a reasonable person involved A filmmaker (writer/director) may want to pitch in the industry would not expect to happen that their script to a production company with them- would prevent them from fulfilling the contract. selves attached to direct. A producer may do the The option agreement should speak to what may same. happen to the agreement in those circumstances. 2 Intellectual Property & Technology Law Journal Volume 30 • Number 11 • November 2018 Warranties and Remedies Thus, writers will not likely fight to reserve many, Issues regarding title, performance, and other or any rights. warranties are found unsurprisingly under the war- Should the writer reserve some significant right, ranties section of the agreement. The remedies sec- the purchaser/producer will want the agreement to tion will specify what happens if there are clearance, include a holdback provision. This clause stipulates title, or other performance issues. that the writer will not exploit the reserved rights for some period so that there would not be a similar, Option Activities competing story in production for a TV show or An option agreement can specify what the parties movie. should do to move the project towards production. Including this language is additional consideration for the writer above the option fee. However, such There are a staggering number of ways language is not enough to supplant the most impor- to make money from a movie. tant consideration, that fee. Credit The producer may ask the writer to write Whether the writer or director gets a particular some ancillary product as part of the deal. The kind of credit has been a subject of contention, most rights to that product should be reserved by the famously regarding the Academy Award winner 12 producer. Years a Slave. An option or purchase agreement may be a good place to stipulate what credit the writer General Issues in Option Agreements receives and under what circumstances. Other matters in the option agreement are rela- This also becomes important when there are co- tively self-explanatory, like option fees, how long writers or when a producer brings in other writ- the option is in effect, and whether there can be an ers to work on the project. The agreement will extension. nail down whether the writer’s name is displayed on screen by itself (a “single card”) or jointly with Setup Bonus co-writers. If the producer makes a deal to begin develop- If the script is based on an underlying work, the ment of the project during the option, the writer author of that work will want credit. This may be should be compensated. An option agreement stipulated in an option agreement. speaks to this issue by including a provision for a “Setup bonus.” Additional Compensation As there are a staggering number of ways to Negotiating a Purchase Price in make money from a movie, any option or purchase Parallel with the Option contract should stipulate which party has rights A writer can also negotiate a purchase price for to the various forms of distribution and ancillary the script while talking about the option price. It products from sequels and remakes to novelizations can be included in the option agreement. However, and streaming VOD release. if a script gains significant buzz during the option period, it may be worth more than it was during Reserved Rights and Holdbacks initial negotiations.
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