Steve on Screenwriting: Should you Option your Screenplay?
Question: Should you option your screenplay?
Answer: Since most screenplays get optioned rather than sold outright, writers need to know how options work. In general, options are a bad deal for writers. Writers are basically renting their material out for a fixed period of time, usually from six months to two years. Option prices vary from no money up to a high of $25,000. And during the option period, writers cannot show or market their material to anyone else.
To illustrate how options work, we’ll use this example: An option price of $5,000 on the front end against $50,000 on the back end for a period of one year. That means the writer is paid $5,000 up front at the time the option begins. After one year, several possible situations arise. What happens most often is that the optioner passes on the script having failed to generate interest from a studio. The writer keeps the $5,000 paid to him and all rights revert back to the writer who is now free to shop his script around again. The second possibility is the optioner asks to renew the option for another year in which case the writer is paid another $5,000. After that second year is up, the optioner can pass again on the script or exercise the option, which is the best outcome of all. It means the option reverts to a sale and the writer will be paid the back end money agreed to originally. In our example, the writer was paid $5,000 initially, followed by another $5,000 to renew, then will receive another $40,000 for a total of $50,000.
The reason why options are generally a bad deal is because writers are usually offered nothing or a couple of hundred dollars for a one or two year period. After that time is up, the optioner usually passes and the writer has nothing to show for it.
My advice: Never accept a free option. If a company is seriously interested in your script, they should pay you $5,000 to $10,000 as a show of good faith for the option.