Option (films)
Encyclopedia
In the film industry
, an option is a contract
ual agreement between a potential film producer, such as a movie studio
, a production company
or an individual, and a writer
or third party who holds ownership of a screenplay
. The agreement details the exclusive rights, including the specified time period and financial obligations, the producer has to advance the essential elements, such as financing and/or talent, towards the creation of a film based on the screenplay
.
Similarly, producers can also option book
s, articles
, video games, song
s or any other conceivable works of intellectual property
. A separate deal would be made with a screenwriter
to write the screenplay
, which is not an option.
Financially, the contract qualifies as a real option
and is thus very similar to other types of options
.
The term is often used as a verb in Hollywood. For example, "Paramount
optioned the short story by Philip K. Dick
."
This is usually a slow process in which a "package" of sorts is created. During this time, the producer must:
This process can be a prolonged period of ups and downs known as development hell
. If all this tentative planning falls into place, meaning actual agreements are signed and financing is secured, then the producer can start the pre-production phase. A portion of the financing is usually used to exercise
the option.
, 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.
The option will provide for the provisions triggered by the purchase of the play when the producer has put his investors and money together. Occasionally, a play will be commissioned by a producing organization, and in that case the writer will not be working "on spec
", and the notion of an option will not arise.
Film industry
The film industry consists of the technological and commercial institutions of filmmaking: i.e. film production companies, film studios, cinematography, film production, screenwriting, pre-production, post production, film festivals, distribution; and actors, film directors and other film crew...
, an option is a contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
ual agreement between a potential film producer, such as a movie studio
Movie studio
A movie studio is a term used to describe a major entertainment company or production company that has its own privately owned studio facility or facilities that are used to film movies...
, a production company
Production company
A production company provides the physical basis for works in the realms of the performing arts, new media art, film, television, radio, and video.- Tasks and functions :...
or an individual, and a writer
Writer
A writer is a person who produces literature, such as novels, short stories, plays, screenplays, poetry, or other literary art. Skilled writers are able to use language to portray ideas and images....
or third party who holds ownership of a screenplay
Screenplay
A screenplay or script is a written work that is made especially for a film or television program. Screenplays can be original works or adaptations from existing pieces of writing. In them, the movement, actions, expression, and dialogues of the characters are also narrated...
. The agreement details the exclusive rights, including the specified time period and financial obligations, the producer has to advance the essential elements, such as financing and/or talent, towards the creation of a film based on the screenplay
Screenplay
A screenplay or script is a written work that is made especially for a film or television program. Screenplays can be original works or adaptations from existing pieces of writing. In them, the movement, actions, expression, and dialogues of the characters are also narrated...
.
Similarly, producers can also option book
Book
A book is a set or collection of written, printed, illustrated, or blank sheets, made of hot lava, paper, parchment, or other materials, usually fastened together to hinge at one side. A single sheet within a book is called a leaf or leaflet, and each side of a leaf is called a page...
s, articles
Article (publishing)
An article is a written work published in a print or electronic medium. It may be for the purpose of propagating the news, research results, academic analysis or debate.-News articles:...
, video games, song
Song
In music, a song is a composition for voice or voices, performed by singing.A song may be accompanied by musical instruments, or it may be unaccompanied, as in the case of a cappella songs...
s or any other conceivable works of intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
. A separate deal would be made with a screenwriter
Screenwriter
Screenwriters or scriptwriters or scenario writers are people who write/create the short or feature-length screenplays from which mass media such as films, television programs, Comics or video games are based.-Profession:...
to write the screenplay
Screenplay
A screenplay or script is a written work that is made especially for a film or television program. Screenplays can be original works or adaptations from existing pieces of writing. In them, the movement, actions, expression, and dialogues of the characters are also narrated...
, which is not an option.
Financially, the contract qualifies as a real option
Real option
Real options valuation, also often termed Real options analysis, applies option valuation techniques to capital budgeting decisions. A real option itself, is the right — but not the obligation — to undertake some business decision; typically the option to make, abandon, expand, or contract a...
and is thus very similar to other types of options
Option (finance)
In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...
.
The term is often used as a verb in Hollywood. For example, "Paramount
Paramount Pictures
Paramount Pictures Corporation is an American film production and distribution company, located at 5555 Melrose Avenue in Hollywood. Founded in 1912 and currently owned by media conglomerate Viacom, it is America's oldest existing film studio; it is also the last major film studio still...
optioned the short story by Philip K. Dick
Philip K. Dick
Philip Kindred Dick was an American novelist, short story writer and essayist whose published work is almost entirely in the science fiction genre. Dick explored sociological, political and metaphysical themes in novels dominated by monopolistic corporations, authoritarian governments and altered...
."
Film options
To be more specific, when a screenplay is optioned, the producer has not actually purchased the right to use the screenplay; he has simply purchased the "exclusive right" to purchase the screenplay at some point in the future, if he is successful in setting up a deal to actually film a movie based on the screenplay.This is usually a slow process in which a "package" of sorts is created. During this time, the producer must:
- Get the screenplay written (if the option was on a book or other work, and not a screenplay)
- Obtain informal agreements with the director, the principal actorActorAn actor is a person who acts in a dramatic production and who works in film, television, theatre, or radio in that capacity...
s, and the financierFinancierFinancier is a term for a person who handles typically large sums of money, usually involving money lending, financing projects, large-scale investing, or large-scale money management. The term is French, and derives from finance or payment...
s - Take it to a studioMovie studioA movie studio is a term used to describe a major entertainment company or production company that has its own privately owned studio facility or facilities that are used to film movies...
or other potential financier and potentially help with distribution (pre-saleFilm financeFilm finance is an aspect of film production that occurs during the development stage prior to pre-production, and is concerned with determining the potential value of a proposed film...
s) - Finalize the screenplay to the agreement of all stakeholders — the exclusivity of the option allows this step without risk of a rival attempt to produce the same property
This process can be a prolonged period of ups and downs known as development hell
Development hell
In the jargon of the media-industry, "development hell" is a period during which a film or other project is trapped in development...
. If all this tentative planning falls into place, meaning actual agreements are signed and financing is secured, then the producer can start the pre-production phase. A portion of the financing is usually used to exercise
Exercise (options)
The owner of an option contract may exercise it, indicating that the financial transaction specified by the contract is to be enacted immediately between the two parties, and the contract itself is terminated...
the option.
Exclusivity
Film options are exclusive, usually for an initial period of 12-18 months. After the expiry 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 RomanceTrue Romance
True Romance is a 1993 American romance crime film written by Quentin Tarantino and directed by Tony Scott. The film stars Christian Slater and Patricia Arquette with an ensemble cast consisting of Christopher Walken, Dennis Hopper, Gary Oldman, Chris Penn, Tom Sizemore, Samuel L. Jackson, Kevin...
, Quentin Tarantino
Quentin Tarantino
Quentin Jerome Tarantino is an American film director, screenwriter, producer, cinematographer and actor. In the early 1990s, he began his career as an independent filmmaker with films employing nonlinear storylines and the aestheticization of violence...
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.
Theatrical options
The above rules generally also apply to the option contract for a completed play between playwrights and theatrical producers. However, one significant difference is that the playwright may refuse to allow their product to be changed in any way without his or her consent and involvement.The option will provide for the provisions triggered by the purchase of the play when the producer has put his investors and money together. Occasionally, a play will be commissioned by a producing organization, and in that case the writer will not be working "on spec
Spec script
A spec script, also known as a speculative screenplay, is a non-commissioned unsolicited screenplay. It is usually written by a screenwriter who hopes to have the script optioned and eventually purchased by a producer, production company, or studio....
", and the notion of an option will not arise.