Was this screenplay option a scam?

A reader posted a comment on the article “10 Things To Think About When You Option Your Screenplay” and it’s such a common question, and my answer ended up being so long, that I thought I’d just turn it into a post of its own.

THE QUESTION:

I have been given a six-month, non-exclusive option by an older, award winning producer, for two of my scripts. While it sounds good on the surface, I wonder if I’m being conned. The query was sent to his production company, but he wanted to read the script as a “consultant” and if he liked it, he’d option it.

He was paid to read it. He liked the first script and sent a one-page non-exclusive option contract. While talking about it, I mentioned another script and he advised me to sent it, same deal, for a “consultant” fee… I sent the second script and he raved about it. He thought it was great, “deserved to be made…” “The best script he’s read in a long time…” and was non-exclusive optioned, too.

I felt uncomfortable in paying him, but his reputation is good and the awards legit – However, after reading this site, I’m wondering: a one-page option? There is nothing about who’s he’s contacting and frankly, he’s not saying. The best I have gotten is “a couple of directors are reading it.”

I know I am unproduced, but does this behavior past the smell test? Is my time being wasted on this producer? Is it normal for a lack of communication to occur while trying to get funding? I don’t want to be a pest and badger the guy, but is this situation normal?
Any comments would be helpful.

MY ANSWER:

Well, first, congratulations on what appears to be positive feedback on your work. Always take that as the bright point that it is, before dissecting its motivations and validity… enjoy the moment.

(pauses for appropriate if momentary elation)

THE CYNIC IN ME says this: He’s taking advantage of newbie screenwriters by charging them to consider their material, which legitimate producers/agents do NOT do.

You queried him for prodco consideration, not for analysis. He responded that he would read it, and that if he liked it, he’d option it.

Then he charged you money to do so.  And, from the sound of it, gave you no “analysis” (notes or otherwise)… just feel good platitudes.

That’s not analysis. That’s a reading fee.

He tried to make you feel better about it by calling it a “consultation” rather than a reading fee, then sort of tried to justify his interest by offering this “non-exclusive option” (read: shopping agreement) which makes you feel like you did the right thing, but doesn’t really obligate him to do anything. He’s probably not doing anything, but is on to charging the next hapless newbie.

CONFIRMING MY SUSPICIONS:

To assure that my comments are relevant and accurate, I checked in with another screenwriter.

The Unknown Screenwriter is a working screenwriter and producer who’s been in the industry for many years. His amazing blog, The Unknown Screenwriter, is highly respected and a tremendous screenwriter’s resource that I highly recommend.

“Believe it or not,” he says, “This is happening MORE and MORE in Hollywood since the economy [tanked] because many of these producers can no longer PLAY. I’ve heard of some producers charging $5K to read a script.”

ME: So you mean producers who can’t make films in this economy are padding income by charging to read for consideration?

“Plenty of them. Lots of producers have been displaced in this economy and are now trying DESPERATELY to make ends meet. Many of these producers have lost their deals with the studios…

That, however, doesn’t mean someone should pay one of them to read a script. That’s just WRONG and it will always be wrong.

During the last 2 years, several reputable producers have even ended up putting ads on craigslist. They bait and switch i.e., they are looking for screenplays to produce. Then you pitch them. They love the pitch and then BAM! They HIT you with a $500 to $5000 fee to read and ‘consult.’

There’s also that INTIMATION that they can GET YOUR SCRIPT PRODUCED which makes some newbies eager to cough up the $$$$$.

It’s NASTY out there.”

ME: Thanks  so much for your insight… much appreciated!

WHAT YOU GOT and WHAT YOU LEARNED:

I’d like the cynic in me to be wrong, but I don’t think he is. So I’d at least like for us to find some legit value in this for you.

That said, I’d break your experience into two parts:

1) You paid someone who you feel seems informed and legitimate for their opinion on your work. Depending on what you paid, that might be okay in a certain context. People do pay screenplay analysts for their opinions on their work… generally you’ll get back a page to several pages of notes on what works and what doesn’t, with regard to formatting, story structure, character development, and perhaps saleability in the context of the current spec market. Those services range from $59 to $750 or more, and may or may not include an actual phone conversation to boot. (I charge $129)

HOWEVER: The context in which that’s okay is when you’re paying that reader for that feedback service as a consultant. NOT when you’re paying a producer or agent to consider working with you. Legitimate agents, managers, or producers DO NOT charge to read your work. The legit players either choose to read your work because your pitch/logline/synopsis captures their attention, or they have readers who filter submissions for them and you’ve captured that reader’s attention, who then passed it along to the producer/agent/etc for consideration. They read it at no cost to you, because they’re considering investing IN YOU. Not getting your money.

IF YOU GOT good valuable actionable feedback on your script from this person at a reasonable price, perhaps you got value from it. Take that for what it is.

2) You’ve got a “non-exclusive option”. I don’t even know what that means… it’s an oxymoron. The purpose of an “option” is that the producer has the “exclusive” right to exploit the property for a limited time: look for funding, attach talent, etc. All with an eye to producing the film. Your eventual purchase price is defined in the contract, and you’re obligated to respect it should they raise the funding they need and exercise their option.

A “non-exclusive option” may be another name for a “shopping agreement”. Those usually are non-exclusive, with short simple contracts, and likely do NOT define what the eventual purchase price will be. It gives the producer the right to “represent” your script to other potentially interested partners, but does not preclude yourself or others from doing the same. You’ll not be paid for the agreement, because since it’s nonexclusive, you haven’t legally transferred any rights of value. It’s simply a party saying to you “I like your script enough to get your permission to show it to some people. If I get any interest in it, then we’ll work out the details of an option or purchase, and you’re free to say no without obligation.”

SO IN THE END: I don’t know what you paid for him to read your script. So long as you got good, informed notes back, I guess there’s no real harm. But in the future, don’t pay people to read your work if it’s for the purpose of considering taking on your script in some capacity.

And six months feels a little on the long side for a shopping agreement, but since it’s non-exclusive, no real harm there, so long as you’re still free to strike deals with other people during the period and not owe this guy anything. In the future, call these what they are: “shopping agreements”.

Also, in the future, your contract should include an obligation of disclosure from the producer. You should know who he’s approached during the option/shopping period, so that you can understand where your property has already been pitched (and passed on) and where it hasn’t. The contract can include a “non-compete” period, something along the lines of “for three months after the option/agreement ends, should the author close a deal with a party the producer has previously pitched on behalf of the project, the producer gets a finder’s fee.” Have a real lawyer craft the language properly.

Lastly, regarding your question “Is it normal for a lack of communication to occur while trying to get funding?” The answer is yes. Or usually. Or sometimes. In my experience anyway, I’ve gone as long as two years under option with very little feedback or update from the producer. I don’t push much, because they’re busy, they’ve got other projects too, and I’m busy with other things. But you could. Again, your contract can stipulate that you’re to be kept informed, say quarterly, of the project’s progress. Have your lawyer craft the language.

I’ll also say that the more “skin in the game” the producer has, the more likely they are to actually be working hard to make something happen with your film, and have meaningful progress reports to share with you. They’ve got skin in the game when they’ve PAID for rights (option or otherwise) on the property. That’s their motivation. In your case, the only one with any skin in the game — and thus motivation to get things done — is you. [sad face goes here]

I hope this helps. Good luck. And keep us posted on your success!