WHAT IS A FILM OPTION AGREEMENT? (In the Entertainment industry.)

Option Agreement / Photo Credit: Medium

WHAT IS A FILM OPTION AGREEMENT? (In the Entertainment industry.)  

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What is a Film Option Agreement?

An Option Agreement is a contract that allows a producer or a studio to obtain the film rights to a writer's screenplay for a period of time with the goal of making it into a film. To the point, an option is a contractual agreement between a potential film producer (such as a movie studio, a production company, or an individual) and the author of source material, such as a book, play, or screenplay, for an exclusive, but temporary, right to purchase the screenplay, given the film producer lives up to the terms of the contract.

Option Agreement

An option agreement is a contractual agreement in which a producer buys the right to purchase a screenplay from a writer or other owner. Unlike the Rights Purchase Agreement, which is a flat-out purchase of a property, an option agreement is not actually the purchase of the right to use the screenplay. Instead, the producer purchases the “exclusive right to purchase” the screenplay at a later date, for instance, when the producer secures financing. Option agreements are usually used to put a property “on hold”, allotting the producer more time to conduct more research and to explore other avenues relating to the making of the film. Options are generally less expensive than Rights Purchase Agreements, as writers are often happy to get a few thousand dollars for their work.

Options are used often in Hollywood and it is far cheaper to option a screenplay than buy it from the onset. An option agreement is especially useful when a producer is unsure of whether their financing will come through. This is basically a way of hedging your bets in case financing does not come through as anticipated. In such an event, if you purchase the rights to the property outright, you might be forced to purchase a screenplay which cannot be made into a profitable motion picture. With an option agreement, on the other hand, even if you fail to secure financing, you can simply let the option expire and “cut your losses”.

Exclusivity

Film options are exclusive, usually for an initial period of 12–18 months. After the expiration date, the producer no longer has an exclusive right to buy the screenplay, and the writer can option it to a different producer. Most option agreements specify the prices of additional extensions (most commonly one extension, also for 12–18 months), should the producer be unable to put the movie together in the originally specified term, and choose to extend. The fee for the first option period is normally applicable to the option exercise price, while the fee for the extension (if exercised) typically is not applicable, though that is not always the case.

Options in Hollywood

Options are not expensive by the standards of Hollywood movies. For True Romance, Quentin Tarantino received US$50,000 to option his script. Many writers are happy to receive a few thousand dollars. Option contracts typically do specify the eventual cost of the screenplay, if the producer does end up exercising the option.

Since optioning a screenplay is far cheaper than buying it, options are very popular in Hollywood for speculative projects.

References & Credits: Google, Wikipedia, Wikihow, WikiBooks, Pinterest, IMDB, Linked In, Indie Wire, Film Making Stuff, Hiive, History Channel, Film Daily, New York Film Academy, The Balance, Careers Hub, The Numbers, Film Maker, Film Site, TV Guide Magazine, Blurb, Media Match, Quora, Creative Skill Set, Chron, Investopedia, Variety, No Film School, WGA, BBC, Daily Variety, The Film Agency, Best Sample Resume, How Stuff Works, Studio Binder, Career Trend, Producer's Code of Credits, Truity, Production Hub, Producers Guild of America, Film Connection, Variety, Wolf Crow, Get In Media, Production Beast, Sony Pictures, Warner Bros, UCAS, Frankenbite, Realty 101, Careers Hub, Screen Play Scripts, Elements of Cinema, Script Doctor, ASCAP, Film Independent, Any Possibility, CTLsites, NYFA, Future Learn, VOM Productions, Mad Studios, Rewire, DP School, Film Reference, DGA, IATSE, ASC, MPAA, HFPA, MPSE, CDG, AFI, Box Office Mojo, Rotten Tomatoes, Indie Film Hustle, The Numbers, Netflix, Vimeo, Instagram, Pinterest, Metacritic, Hulu, Reddit, NATO, Mental Floss, Slate, Locations Hub, Film Industry Statistics, Guinness World Records, The Audiopedia, Imagination for People, Literary Devices, Start Up Film Maker, On Post Modernism, The Guerrilla Rep Media, Indie Film Distribution

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Option Agreement / Photo Credit: Medium