Question on Optioning

C

coroner

Hello all, glad to find the board. I've got a script that an Indie company is extremely excited about and wants to option. In this case (surprise) they're seeking deferred payment, not only from myself as the writer, but also the cast, etc. After meeting and discussing things with them, I do feel extremely comfortable that they'll do the script justice and after seeing some of their other work, I feel that they're very competent in a lot of aspects of not only producing the script, but also marketing and distribution. The nitty-gritty question is that I'm uncertain of what to ask for back-end profits and points, as the payment is deferred. Is there any standard for something like this?

Any help to a newbie would be greatly appreciated, and I thank you in advance.
bob
 
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There really isn't a standard. You will want to get as many
points as you can - they will want to give you as few as they
can.

That's good business.

Deferred payment means you SHOULD get your full asking
price the moment the final movie is sold. For example, you
option the script for 6 months for $2,500 against $25,000.
They pay you the $2,500 now and when the movie sells
they pay you the remaining $22,500.

Since they aren't actually offering you an option then the
purchase price is $25,000. You give them the script for a
deferred payment of $25,000. At the first sale of the movie
they pay you the full purchase price of $25,000.

Back-end points are not part of the deferred deal. Those points
will be negotiated separately.

On the other hand, if this ISN'T a deferred deal but you are
giving them you script for free and they will offer back-end
points only, then you; 1) know you will never see any money
at all, and 2) you should ask for an equal share to the producers.
You are, in actuality, a producer. You are giving them a script
for free - taking a financial risk - and should be well compensated
for the risk.
 
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And be sure and have a film attorney make sure the contract is bullet proof. Otherwise they'll do the Hollywood accounting thing, invent expenses, pay themselves salaries, anything to negate paying you. They must provide you with a full accounting at various intervals too. If they breach the agreement then you should be entitled to attorney fees too, otherwise it could conceivably cost your $100,000 to win $10,000 that they skipped out on paying you.
 
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