Visual Mindscape: Never Do a Free Option Agreement

I could make this the shortest column ever run in Scriptmag.com by simply saying; never, never enter into a free Option Agreement. There is never a valid or compelling reason to do so. I don’t care if it is your first screenplay or not, don’t do it.

free optionHave I made myself clear?

One more time for emphasis; never enter into a free option agreement.

The reasons are copious.

Let’s start with you. If you accept a free option what does it say about you and the value you place on your work? All those hours spent creating and writing a feature-length screenplay have no upfront value? Is that the impression you want to give to the industry?

Being a professional is expressed in your own code of ethics and the way you take care and value yourself and your work.

One reason new writers accept free option deals is because in some way it validates them. But that is not true. Anyone offering you a free option isn’t worthy of you defining your own self worth based on their opinion. Validation under these conditions is an illusion.

Now let’s look at those who offer the free or $1 options and what are their qualifications.

To me, free denotes amateur. He or she isn’t really a producer. Business cards are cheap.

One clue that can give you insight into whether this producer knows what he is doing is the Option/Purchase Agreement.

It doesn’t take a lot of brainpower to write up a simple option agreement, but you usually do need to know what you’re doing to draft a purchase agreement or have a lawyer do it, and I don’t know a lot of lawyers who work for free.

So, an amateur producer will disregard the purchase agreement. Nothing screams incompetent louder than an option deal without a Purchase Agreement. No real producer would allow themselves to be put in the position of not having the exact terms of purchase confirmed before entering into an Option Agreement.

If there is no Purchase Agreement attached to the Option Agreement, then this is not the person you want to be dealing with. Why? Because they haven’t got a clue what they are doing.

More likely this ‘producer’ is actually a wannabe who is attempting to be attached to the script and interject himself between you and the true potential production company that actually does have the money to make your movie.

His is a position worthy perhaps of a finder’s fee if the project goes ahead but certainly not the right to an option on your script or worse, attaching himself to the production.

Amateurs seek out amateurs to exploit. Professionals seek out professionals to evolve.

How does a free option request reflect on your screenplay? A free option shows just how serious a producer is about your screenplay. It carries no risk, and as such, it carries little incentive. The only person in this kind of deal who is at risk is the screenwriter, and I will go into more detail about that later.

I have been in this business for over thirty years (Gawd, I need a drink after coming face-to-face with that). For many of those years, I was an agent and manager and represented writers. Of all the free option stories I have heard of over all these years, I have yet to hear of a free option that led to a sale. Not once!

There are several other consequences that can come into play when dealing with shady producers (and I do consider free option producers as shady).

As you have no idea how many other screenplays the producer has free options on, he could be pitching twenty of them just to see if anything sticks. That does not bode well for your script, and you can be sure that he is not giving it the attention that you expected or that it deserves.

This happens far too often even to professionals on occasion.

I had a script that a producer had expressed keen interest in. He told me that he was off to Cannes for two weeks, but while he was gone, he would have his lawyer draw up an Option/Purchase Agreement for my agent that could be finalized when he got back. Negotiations dragged on as they often do.

Strangely, when he returned the negotiations suddenly fell apart.

I was to find out later that he had been shopping the script to the major buyers at Cannes.  As he didn’t get any bites, he was no longer interested.  He had got a free option of sorts from me, even though I was unaware of it at the time.

Another thing that can often happen if you are dealing with free option producers is that your script gets attached to their reputation. It gets shopped around to numerous distributors and production companies by a producer that no one really wants to work with either because he is inexperienced or because he is an SOB. Either way, once a script has been turned down by a production company it is really difficult to get it back into their pipeline. Your script has lost much of its shine.

Often the producer will attempt to get himself entwined into the very fabric of the screenplay. They make suggestions of changes in the script. They offer a line or two of dialogue, whatever. Now, even after the option has expired, they can have an effect on your script’s chain of title. They can attempt to lay partial claim to the script, and even if their claim is relatively weak, no production company wants to enter into a option/purchase on a script that does not maintain a clean chain of title.

Finally, you must realize that there is a perishable value to your screenplay that is partially protected by a fair option fee. The older the script gets, and the more submissions it has, the less salable it becomes.

The producer is not just optioning your screenplay, they are consuming years of its life expectancy and that alone is worth compensation.

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6 thoughts on “Visual Mindscape: Never Do a Free Option Agreement

  1. Bill BoyleBill Boyle Post author

    Here is the response I wrote to Danny Mannus article in which he refutes pretty much everything I said here. You can read his article at

    http://www.scriptmag.com/features/the-dollar-options-another-viewpoint

    Here is what I said.
    Well as I am the topic of most of this article I would be amiss in not responding, but I am at a loss as to where to begin.

    I would have appreciated a comment from you rather than having just stumbled onto it but this is already water under the bridge.

    Off the top (and I may be wrong about this) it seems to me that you are approaching this from the other side of the fence and not from the role of a writer. That said, I can see on a more business like rather than professional perspective that you would believe in the legitimacy of not paying a writer for the work that he has already put in to his script.

    Let me ask you a question about your first look deals. If one of these companies said to you that they were interested in pursuing the project that you have the option for but that they really don’t want to pay you anything until they get a total green light how excited would that proposition make you? I suspect you would find that slightly annoying.

    I said that in all my years as a writer and more specifically as an agent I have never scene a zero dollar option come to fruition and you take exception to that. Perhaps its because I was an agent at the time and you did say that your zero option approach was not something you would expect to be accepted by a writer who has representation. I suggest that is because no agent worth his salt would ever let you get away with it.

    In the kind of deals that you describe you are simply inserting yourself or your company between the writer and real producer; the one who is putting money down.

    I have no problem with finders fees for that kind of arrangement but if you have that little value for writers just because you think you can get away with it (we all know how desperate writers can be) then that speaks to something much larger than what we are discussing here.

    It speaks to legitimized exploitation and to a very disturbing disregard for the writer and their craft.

    They have already spent months working for free as they wrote their screenplays.

    I would be more than happy to have a debate with you on this subject anywhere and anytime. Perhaps the scriptwriters network or some other organization because I think this is very important issue to be addressed.

    Some how I don’t feel that I have given this all of the attention that it deserves but I’m tired and will call it a night. I might be back for more at a later date.

  2. chipstreet

    Love the insights from a true vet – thanks!

    I’ve had three options. All three were extended by the prodcos involved. One sold, one is still under option. All were at the indie low budget or microbudget level. Some were paid (very little), some were free. I don’t entirely agree with the “never never never” credo on zero dollar (details below), but I will say that everything else holds… people with the real ability to make your project *should* have enough cash to pay an option. And you run the risk of them tainting your project. And your valuable property is off the market for the duration. All risks.

    The thing is, what if your screenplay is an extremely artsy microbudget concept with little hope of theatrical distribution, but great festival potential and will make a great calling card? The budget including M&A is slated for $50,000 and that’s with everyone donating their time and resources out of a love for the story? 3% of budget makes your screenplay worth $1500. The option would be around ten percent of that – $150. [think the Duplass Bro’s The Puffy Chair – alleged budget of 15K]

    In a case like that, if you trust the prodco and talent, you *might* just want to forego your measly $150 to maybe get your arty pic made, right? (maybe even your whole $1500 if it helps pay for permits) So in my mind, it’s not a 100% “No”.

    Opinions vary – Danny Manus of NoBullscript recently said that prodcos he’s read for (all w 1st look deals at major studios) EVER paid for options from unrepresented writers. He claims only 10% of companies would pay a newbie for an option. I found that surprising.

    For me personally I can’t imagine doing another free option unless it’s a project that I’m coproducing or directing, so I can give the project the momentum and lovin’ it needs. I *might* however consider a zero-dollar shopping agreement: Nonexclusive rights to pitch my screenplay to others, but I get the option of saying “no” to any insufficient offer that generates. That still runs all the risks above, though. What are your thoughts on that?

    And yes, as you say, in all cases, ABSOLUTELY the option agreement should explain in great detail all the aspects of the eventual purchase. I actually think about option contracts as “sales” contracts, with an option-first clause.

    I’ve blogged extensively about crafting options that protect the writer – this piece has been reproduced or referenced in multiple places including Bluecat and ScriptTips. http://chipstreet.com/2010/02/02/ten-things-when-you-option-your-script/

    Great stuff, Blll — thanks!

    1. Bill BoyleBill Boyle Post author

      Chip;
      Thanks for the well thought out response. I understand the point you were making regarding a very low budget and the size of the option being to small to bicker over. I would suggest though that in this kind of situation you are really coming into the deal as a partner rather than a for hire. Partnerships allow you to participate more fully in the proactive activities to make the picture a go.

      As for Danny Manus’s comments regarding free options I would still disagree. Mr. Manus is approaching the free option topic from the other side of the table and not from the writer’s perspective. Companies that seek numerous free option projects and then attempt to place them with a studio or other production companies are in affect positioning themselves between you and the true engager and I would be shocked if they are not expecting some kind of compensation for themselves if the studio or prod co shows interest in the property. Why should they be compensated doing exactly what you and your agent are doing, yet put forth the argument that the need a free option from you.

      In these cases they may be worthy of a finders fee of some kind, paid by the production company but they don’t earn the right to stand between your script and the engager.

      Thank you again for your comments. It allowed me to expand a little more on the topic.

      The Best in all of your screenwriting adventures

      Bill

      1. chipstreet

        I think we’re in agreement… that’s exactly what I’m looking for at this point. A no-dollar option means I must be involved enough to help the project somehow.

        Shopping agreements aren’t something I’ve got any real experience with … but with regard to your point of putting someone between me and the end-client, feels a lot like a no-dollar option.

        Thanks for the reply! Time to go dig around your blog for more insight…

        Cheers

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