I've included this post in the Screenwriter's Lounge, because it behoves every writer to know about this aspect of selling their work.
“RB” is always telling us that as Screenwriters we should not only hone our craft, but be knowledgeable about the industry and the business side of that industry, because if you are planning on selling your screenplay or TV Spec then at some point we are going to have to deal with the legal stuff.
This teaching session, delivered by Thomas Crowell was excellent. It was a very thorough look through Options, Shopping Agreements and Attachments. As with all things legal, it was pretty complicated, but fortunately for me the downloadable handout is great value in and of itself.
Thomas covered Option Purchase Agreements and the relationship between the Underlying Rights Owner (in our context, we the screenwriters) and Producers. The session which lasted for 2 hours focused on this relationship, but also a lot about what the Producer must do to obtain any rights of our work.
The difference in legal terms between Options and Shopping Agreements, as well as Purchase Agreements. PAs are not just for the rights of the Intellectual Property but may include merchandising rights and also rights to create spin=offs, including sequels.
I won’t go into great detail here, but for a quick outline here are some salient aspects of this teaching session.
• Option Purchase Agreements – and time-based Exclusive Rights.
• Option Price is not the same as Purchase Price.
• Reserved Rights – for the IP owner if not granted to the Producer such as publishing rights, merchandise, legit theatre, video games.
• Services – IP holder can be the screenwriter, consultant or a Producer.
• Reversion of Rights – if the Producer cannot get the project made in the set time period of the agreement.
• Assignment – covered the right to assign the contract and the copyright to a studio (or production company)
• Boilerplate clauses – there’s a lot to go through, but I won’t weigh this post down with too much detail.
• Exhibits and who holds the rights to materials that the Producer creates to promote the project.
• Compensation for the Writer/IP Holder.
We looked at how a Shopping Agreement differs from an option. The time limitations for such an agreement, if compensation is due. There may also be a ‘term tail’ which means that if the Producer can’t get the project made, the IP owner may have to wait a number of years before they could say, approach the same Studio with the project.
There was even a section on ‘Overreaching Producers’, which was most interesting.
I would recommend this teaching session to my fellow screenwriters. We need to be aware of this side of the business, so that when it comes to selling a project, we will know what to look and ask for and fine tune our expectations.
https://www.stage32.com/webinars/Protect-Yourself-Understanding-and-Breaking-Down-Shopping-Option-and-Attachment-Legal-Agreements
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Thanks, Geoff Hall! I was looking for a webinar about this!
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As one of the few entertainment lawyers active on Stage 32, I would definitely agree Geoff Hall. Filmmakers who might have a specific question about option/purchase agreements, shopping agreements, and other important legal aspects of independent film are invited to connect.
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Dan MaxXx and that’s the right way round. No money, no script, no rewrites.
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This was informative and very helpful. Thanks, Geoff!
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Dane Johnson the problem with watching these sessions on-demand, is that if you have questions, there’s no way of asking them.
I had a question about ‘attorney costs’, as Thomas said that not everyone can afford an attorney and mentioned he was paid by the hour or a ‘project fee’. It seems that the screenwriter is at a disadvantage, if they can’t afford attorney rates they will end up signing a contract that could erode their rights and compensation levels.I’m not sure how the preoject fee option works. Is that a percentage of the payment the owner of the IP gets on signing the contract, or?
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Frank Monteleone my pleasure, Frank. It’s well worth watching. I had to watch it in two sessions. After the first hour my head felt like a glue pot!
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Geoff Hall. Glue pot. Haha
"I’m not sure how the project fee option works. Is that a percentage of the payment the owner of the IP gets on signing the contract, or?" You could also let Sam Sokolow know about that for a future webinar (https://www.stage32.com/profile/877526/about).
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Maurice Vaughan thanks Maurice. Have you come across ‘attorney costs’ as project fees, before?
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You're welcome, Geoff Hall. No, I haven't heard of "attorney costs" being referred to as project fees. I have, however, heard of attorneys being paid by the hour.
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Geoff Hall, a percentage fee for attorney fees would be based on income received by the screenwriter or other talent related to whatever work the attorney does on the project. It could also be a percentage of the gross of a released film. The fee is sometimes paid along with a retainer, which might be less than with a typical hourly fee. It depends on the agreement between the lawyer and the client. A percentage fee can be a good way to work for projects with a high potential for success, and I represent a number of projects on a percentage basis.
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Dane Johnson thanks Dane. That is really helpful. What of TV shows? The likes of Netflix we are told, don’t pay residuals. Does that mean TV or OTT shows are less financially viable for the attorney and therefore less attractive?
Geoff Hall or Dane Johnson - I have asked a performing arts agent about optioning a book. She asked me to suggest a fee - let's say for a year. Any thoughts on what I should suggest I pay for optioning book rights so I can create and try and sell a screenplay. I am a screenwriter.
Christine Keleny I would’ve thought that it was the agent’s remit or at least in their interests, to suggest a fee, rather than put that on you! If they are truly experienced in this line of work, they should be at least able to open the dialogue.
So, I take it you will be doing the adaptation of the book? BTW - I hope Dane is reading this.
Dane Johnson what are your thoughts on Christine’s question, Dane? Am I barking up the wrong tree?