Dear Larry: Should I Give a Producer a Free Screenplay Option?

Dear Larry,

After searching for a long time, I finally found a producer who wants to option my script. The problem is that he doesn’t want to pay me for the option. When I asked why he’s not paying me he said that the effort he was going to put into trying to sell the script was sufficient compensation. I don’t want to blow this chance to get my script optioned, but on the other hand, I don’t want to be cheated. What do you think? Should I give this guy a free option?

– Trying Not to Get Screwed

Dear Trying,

The question about whether to give a producer a free option is one that comes up fairly regularly. The answer is — as you may be able to guess is, “It depends.”   In principal, I’m against free options. But let’s go through the pros and cons of granting a producer a free option and you can decide for yourself.

My main reservation against free options is that most of the time the producer is really just acting as an unlicensed agent, trying to sell your script to a studio or production company that actually has money. If an agent sells your script, she only takes ten percent of the purchase price. But by calling himself a “producer” instead of an “agent,” the producer can take 50, 60, or even 90 percent of the purchase price, and leave you with the crumbs. The producer is also not subject to the licensing requirements and oversight that agents have to abide by.

Second, by giving a free option, you have not given the producer much incentive to sell your script. If he doesn’t sell it, he’s not out any money, so it’s no skin of his nose. I mean, who do you think is going to work harder to sell your script, someone who paid you $2500 for an option, or the guy who got it for free? Also, by paying for the option, the producer has sent you a message that he really believes in your script and thinks it could be made into a movie. The producer with a free option is essentially acquiring lottery tickets. There is nothing stopping that producer from getting free options from dozens of screenwriters and then bringing them all into a pitch meeting. If one of them sells, that’s great for him. But he is not giving your screenplay the attention you think it deserves.

But if you are thinking of granting a producer a free option, here are some steps I think you should take to make sure that you won’t be treated too badly.

1. Don’t give free options until you have exhausted all other possibilities. If you’ve just finished your screenplay, you first want to take steps to obtain an agent, or else get it sold yourself. You should only give free options on scripts that you’ve given up on selling and if there was no free option, it would just sit in a drawer.

2. Keep the time frame very short, 90 or 120 days. If the producer complains that it’s too short a time to get it set up, then offer to give him a right to extend the option, but only if he pays you the next time. You don’t want him out there trying to sell your script forever.

3. Try to make the option non-exclusive. If this producer wants to take your script out, fine. But since he’s not paying you for the privilege, he should let you continue to try to sell it to others. That way, he only gets paid if he makes a sale, but not if you can get it sold on your own.

I still think that giving free options are a bad idea. In fact, I have yet to hear anyone ever tell me that giving a free option resulted in a sale (I’m not saying that it hasn’t happened, only that I’ve never heard about it.). I think that giving a free option shows that the writer doesn’t really value his script. But if you’re going to do it, at least follow the steps listed above.

Have a screenwriting/legal question for Larry? Feel free to e-mail him at Larry@ZernerLaw.com. He's happy to take your questions and it might even appear as the next "Dear Larry." 

Photo: HBO