sales-options Option question - BuyBack

[rocketcar]

I'm negotiating an option on a feature screenplay.

I'm including a buyback clause that states if I get an outright purchase offer elsewhere during the option period, I can buy out the current option holder for $X (this was their idea btw).

I've not been able to find any guidelines regarding any rule-of-thumb on what this amount might be... there doesn't seem to be a reference in any WGA standards.

A percent of the option's purchase price? A percent of the new offer? A random amount (as little as possible )?

Any ideas? Much appreciated...

 

[directorik]

I don't know that there ARE standards regarding a buy back during the option period. Since it was the producers idea, you should ask them what a fair amount might be.

I know it's in our nature to keep money talk on the hush-hush, but you're negotiating a money deal. Don't be shy.

Another thing to consider: how likely is it you'll get a serious offer during the option period? Seriously. We all want to think that we'll have half a dozen offers on the table, but your buy back price needs to take into account the reality of your script getting another offer.

Also what kind of money are you talking? High 5 figures? Low six?

Unless your script is pretty hot on the market right now, no small prodCo is going to want to up their price to meet a buy back option. And YOU don't want to lower your scripts potential value.

My suggestion: keep the option period short - no more than 6 months with a 3 month extension. And don't offer a buy back option.

 

[rocketcar]

It's my first 'play -- I have no history on this I'm afraid. I'm not in WGA, so unless I want the points for admission, I don't necessarily need to abide by their min/max (10% option min for instance - though I'd like to use it as a guideline). I've had extremely positive response from industry professionals (actors, producers, writers), but as yet have not really tried to put it out there for sale - it's in two comps right now is all, but I have high hopes as the (flawed) first draft made round II there last year. I know a bird in the hand is worth a lot. And they're a small prod company with decades of below the line experience but no feature productions as this organization.

I had one suggestion as to make it a percent of the new purch price, with min/maxes of the orig purch option.
For instance:
Option for $1, purchase for 50K.
BuyBack from the first 'optioners' for a percentage of the NEW sale, with a min of 10% of the sale price offered the first 'optioners', but not more than 25% of the sale price offered the first 'optioners'.

(I'm optioning for $1 in exchange for producer's billing and participation as well.)

Thanks for your advice... I'm weighing everything now...

Cheers

 

[wwwtf_adam]

Just a couple of notes. I've been living well off options for 15 years. (27 options during that period...not counting the film I made from my own script, You Are Alone.)

1. Take all the money up front.

2. Producers credits are worthless.

3. Participation/Percentage of the back end is worth even less. (But a lotto ticket, your chances are just as good of ever seeing $$$)

4. If they like your work, make them pay something for it. Even if it's $1,000. It they can't put up $1K, they'll never be able to raise the money to make the film.

5. As for buyback...forget about it. If some big producer wants it that badly, let them deal with it.

6. Also...sale price, make it a percentage of the film's budget with a ceiling and floor...deal high: 5% of the final budget (make sure the word final is there...what the film actually cost...not the original budget before costs begin to skyrocket)...with a floor of $50K and a ceiling of $500K...this way if they suddenly turn around and sell your idea to a big wig who makes the film for $80,000,000...you actually make something.

7. Get an agent!

Just my thoughts...

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