Process #2: Option Options

Trying not to fall at the first hurdle

After the idea, in an ideal world, comes the option.  The great idea you have expressed so eloquently in a few pages has moved the person in the big swivelly chair at the production company so much that they will now pledge to making your idea.  Then they will rain money down upon you and a very short time later you are sitting in your favourite comfy chair or at a flash movie premiere, witnessing your script come to life on a screen, right before your very eyes.

And then you wake up.

After the idea, if you are very lucky, comes an option agreement.  This is where someone in a big swivelly chair gives you a tiny amount of money in order to secure the right to give them time to find the big amount of money to turn your idea into something approaching the idea you had in the first place.

On the face of it the option agreement is a fairly straight-forward thing.  In return for tiny-X amount of money, a production company is given Y amount of time, in which to push your project forward. In my experience Y is usually 1 or 2 years, with an automatic right or renewal for another payment of tiny-X.  Ideally it is a show of faith in your great work, and everyone marches forward together, on the Long March of Development.

In the world of options, there are many enigmatic variations on the same document, so everything that follows is based upon deals I have done, deals I have witnessed, or stories told me by writers of my acquaintance.  I’m sure there are other war stories to be told, which is why the comments section exists.

The best thing about an option agreement is that it is a validation of what we do as writers.  Someone has liked my idea enough to back it with actual money.  There are few greater compliments in the world of screenwriting than this. Huzzah!

Then things start to get cloudy.  Option agreements can range from a simple shopping agreement, to full option and purchase agreements. They are also usually written by lawyers, which is never a good sign.  Luckily there are people out there who can help you navigate this crafty little document. A Writer’s Guild is, in my experience, full of awesome people who are not only there to guide you through that forest where you can’t see the wood for the paperwork, but they also spend much of their time in mind-numbingly boring meetings so the rest of us don’t have to.

The Guild people will usually start by telling you seemingly obvious things like “don’t sign it if they have spelt your name wrong” before taking you on that deep dive, helping you understand the treacherous waters you are wandering into.  Listen to them, for they are wise.  They know where the hooks lie.

One particular little hook that many writers hate in option deals is where the option fee is recouped by the company from the rights buyout fee owed to the writer on the first day of principal photography.  Thus, if the option fee is tiny-X and the buyout fee is Z, then the actual value of Z is (Z minus tiny-X).  In effect, should you go into production, you have loaned yourself the option fee, rather than it being a buy-in from the company.  Companies will argue that the majority of projects never go into production, so they are taking the risk.  Writers will argue that it just feels kind of petty.

But the scariest hook of all, when it comes to option agreements, is that if you’re not careful, this simple document, a seemingly straightforward deal, can cost you your idea, forever. 

This is probably best explained by way of a story.

Many years ago, on one of my stints as the company guy in the big swivelly Head of Development chair, a young writer brought in an idea we all quite liked and wanted to option.  In the process of drawing up the option agreement the writer shared the knowledge that the idea had been optioned before, to another company, but that option had now lapsed. 

This was where the problems started.

The usual thing with option agreements is that should the deal with company A lapse, but the option is later picked up by company B, that should company B actually get the thing into production, then on the first day of shooting company B will reimburse company A whatever company A spent on developing the project – sometimes plus 10% because we live in a capitalist world. Usually this is not a big deal, as often this is only the option fee with maybe a couple of draft scripts thrown in (plus the aforementioned 10%).  Not a lot, compared to a full production budget.

But in this case the previous company wanted an insane amount of money on the first day of PP.  Six-figures.  This is what they claimed they had spent on the project, even though it was obviously complete bullshit.  And because they were not only bullshitters but slimeballs as well, they refused to budge on that number.

Now there are lawyers involved.  Which means that very quickly the project gets shifted into the Way Too Hard basket.  Having to tell that young writer that not only would we not be optioning their idea, but that the chances of any other company picking up the idea was virtually zero, was as close to heart-wrenching as you get in the shallow money trench that is making television.

Option agreements. This is the part of the process where a simple expression of love can become the place, as a bloke with a gravelly voice and unruly hair once sang, the first cut can very well be the deepest.  Take your time.  Refuse to be rushed into signing.  Talk to the people who know about this stuff.  Read everything twice, then read it again. 

Because once you sign, you can’t go back.