How to Option a Book for Film Adaptation
7. Remake/Sequel/Series Royalties: While you get the right to produce remakes, sequels, and series based on the Picture (as opposed to author-written sequels), you must pay Scribbler for the privilege. Fortunately, these royalties have pretty standard parameters. For each theatrical remake produced, Scribbler gets 1/3 of the purchase price you paid for the original rights and 1/3 of the net profit participation–let’s assume it was 5%–for the original Picture;i.e., 1.66% of the net profits from such remake; for each theatrical sequel produced, Scribbler gets 1/2 of the purchase price you paid for the original rights and 1/2 of the net profit participation for the original picture; i.e. 2.5% of the net profits from such sequel. For a television motion picture or mini-series produced, Scribbler gets (this figure is negotiable) $25,000 per hour of running time up to a maximum total royalty of $150,000. Series royalties are a bit more complex. For this reason, in this type of deal, Larry and I would normally just agree to leave them to be “negotiated in good faith within customary industry parameters.” The odds of Looking for Luigi becoming a series are not high although it can happen. If Larry insists on spelling things out, you might sigh deeply and provide that: (these figures are also negotiable) for each half-hour episode broadcast — $1,500; for each one-hour episode broadcast — $2,500; for each episode over one-hour in length broadcast — $4,000. In addition, Scribbler should get 20% of each applicable episodic royalty for the first five U.S. reruns of such episode up to a total of 100% of the applicable royalty. The theatrical royalties are paid upon commencement of principal photography of the production. The television royalties are usually paid within 10 days after broadcast of the applicable production/episode.
8. Credits: The author is always entitled to screen and paid ad credit, but this term is one of the easiest because it is almost always the same. If the Picture has the same title as the book, Scribbler gets the credit: “Based on the book by Joe Scribbler” on a single card in the main titles and in all paid ads issued by, or under the control of, the production company in which the screenwriter gets credit. If the Picture has a different title, then the wording of the credit is: “Based on the book Looking for Luigi by Joe Scribbler.” If you want to be thorough, you can also provide that for a remake, sequel, or series, subject to such applicable union or guild requirements that apply to the screenplays for the Picture and those productions, Scribbler will get a credit reading substantially: “Based on Characters Created by Joe Scribbler,” with the other aspects of such credit at the production company’s discretion.
9. No Injunctive Relief: This is a legal clause but is super important so I will include it. No distributor will distribute a motion picture if the author of the underlying source material can get an injunction stopping the film from being exhibited or broadcast or exploited. Therefore you always want to provide that in the event you breach the contract, the author’s sole remedy will be an action at law for money damages, and in no event shall he be entitled to seek injunctive relief or to prevent, restrain, or hinder the exploitation of the Picture or any ancillary rights connected therewith or the advertising or promotion of the same. This provision is standard and should not be a problem.
10. Reversion: Finally, there is the chance that Larry will ask for a reversion. Larry may take the position that if you buy the rights but never exploit them (rare with indie producers but it happens), Scribbler is prevented from ever having a production made based on his book. This means lost status and money for him and far fewer social events! This is not unreasonable if you pay $75,000 for the rights but less fair if you are paying $200,000. I always initially refuse this request if I can and argue that the author is getting a large chunk of change for the rights and that my client’s intention is certainly to exploit them but delays happen and it is hard to negotiate with financiers with the threat of a reversion hanging over your head. But Larry may insist. Larry may request that the rights automatically revert to Joe if you fail to commence principal photography of the Picture within five years from the date that you exercise the option and pay the purchase price. He may offer you a lien for the purchase price and other out-of-pocket expenses to be repaid if and when Scribbler gets his own future film into production. If you must agree, the better way to do this (and Larry may agree) is to provide a) that you get seven years, and b) that the author shall have the right to buy back the rights at the reversion date if he reimburses you for the purchase price and your other actual out-of-pocket development expenses (such as screenplays and all-night parties) expended up to that date. That way at least you don’t automatically lose the rights. You must get all your money back first.
While the book option deal will contain various other boilerplate legal terms such as governing law, jurisdiction, severability, etc. common to all contracts, I think that the above article gives you a pretty good outline of the most important deal points to help you on your way to being the next Scott Rudin. One reminder: Never let an option expire (if you still want to make the film) thinking that you will always be able to go back to the author. You may not be able to! Remember the quote at the top of this article: “In the motion picture business, nothing is more important than rights.”
N.B. This article is not intended as legal advice and is not offered for the purposes of legal advice or counsel. It is solely for the purposes of education and discussion and general information.