What are screenplay options and how can screenwriters better understand the ins and outs of them when Hollywood insiders come calling?

Screenplay options are the middle ground of your screenwriting journey. You've taken the necessary steps to hone your craft, and now your writing has proven to be desirable in the eyes of film and television industry insiders.

You may or may not have representation, but regardless, you have producers or development executives interested in your screenplay.

But you haven't sold anything yet. Nothing has been produced. And you're likely not at the level of being offered major studio writing assignments. However, industry insiders are requesting to option your screenplay.

Here we offer a simple breakdown of screenplay options and what they entail for screenwriters.

What are Screenplay Options?

A screenplay option is contracted permission that gives interested parties exclusive development and shopping rights to your screenplay.

It's the step before the actual acquisition of your script.

Producers and development executives utilize option agreements to attain the sole rights to represent the screenplay, package it, and attempt to secure distribution sales and the necessary budget to get the screenplay produced. They attain those rights by having the screenwriter(s) sign a contract that stipulates that the screenplay will not be shopped or packaged independently outside of the signatory party — a producer, development executives, production company, or studio.

Screenplay options usually offer the writer a fee to take their screenplay off of the market — but that fee (if any) varies.

How Much Money Is Offered to the Screenwriter?

Back in the screenwriting boom of the 1990s and early 2000s, screenwriting options were offered by major studios, producers, and production companies on a regular basis — usually for good money.

While some higher-tier (major studios) screenplay options offered screenwriters or authors of novels upwards of $25,000, most fell within the three-tier amounts of $2500, $5000, or $10000.

Keep in mind that option fees are just the initial payment to keep the screenplay off of the market.

However, when the economy collapsed and the Writers Guild of America went on strike during 2007 and 2008, the industry changed. Screenplay options weren't renewed (see below). Studio term deals (development deals with screenwriters and producers) were dropped.

The ripple effect of that one-two punch sent shockwaves across the whole film and television industry. Studios and networks became much more risk-averse. Expenditures like high ticket screenplay option fees were dismissed.

These ripple effects are still felt throughout the film and television industry today.

Screenplay options no longer offer five-figure fees — unless the intellectual property (screenplays, books, articles, story rights, etc.) is high value or the screenwriter or author are high profile.

These days, screenwriters are lucky to get $1000 screenplay options. Higher-tier production companies, producers, and development executives may offer as much as $2500, but those types of fees are few and far between these days — especially for newcomers.

Many industry insiders offer free options or $1 options, pitching the no-upfront-pay agreement to screenwriters as an opportunity that could lead to a sale.

How Long Do Screenplay Options Last?

When you sign a screenplay option agreement, you're not giving up the rights to your screenplay indefinitely. There is always a contracted time-frame for the industry insiders to maintain exclusive rights. And that time-frame varies.

Generally, you'll be looking at anywhere from 6 months to 18 months, with 12 months as the average for most screenplay options.

The caveat is that the signatory companies or individual is allowed the first option to renew for an additional period of time — which often falls within that three-tier 6 months, 12 months, and 18 months range.

Most legit screenplay options will allow the screenwriter to receive a renewal fee for that renewal, others will not.

What Happens During the Contracted Option Time Period?

If you're dealing with major production companies, producers, development executives, and studios, there will be a lot of pitch meetings that you may or may not be asked to attend. Sometimes the signatory companies or individuals prefer to handle the pitch of your screenplay themselves at the option stage. Other times, you'll be asked to have a hand in the presentation. It depends mainly on the people you're dealing with.

You may hear weekly updates from various meetings. You may only hear updates every month — or even every couple of months. It usually depends on the climate of the industry as it pertains to your type of screenplay or the hectic schedule of the industry power players involved.

In short, it's a lot of wait and see.

Are Screenwriters Obligated to Do Rewrites During that Time?

It depends on the contract.

If you're dealing with major production companies, producers, development executives, and studios, most of them are Guild signatories and are required to pay you for any necessary rewrites. But if you're an unknown and not a Guild member, lines are blurred.

This is where your personal judgment comes into play. You may be asked to tweak the script, do an overhaul of it, or simply do some general polishing — all for free. It's all about getting your script to the draft that they feel it needs to be to attract studios, distributors (pre-sales of the project go towards covering the budget), and talent (major actors and directors).

Hollywood does take advantage of the desperation of screenwriters, however. You will likely feel a lot of pressure to do multiple free-writes and other additional work (writing treatments). But that doesn't mean that you have to agree to do so.

Too many screenwriters feel the need to do whatever it takes to keep their industry connections happy. But this has proven to be at the expense of the screenwriting community as a whole.

Thus, don't be afraid to put on that business hat and protect yourself from being taken advantage of. They'll push you as far as you're willing to go, in regards to working for free. But the strong screenwriters are confident in their work and know that there's a limit as to how much unpaid work is done.

There's often a necessary balance between helping them get your script sold and protecting yourself from being taken advantage of.

Learn how to master the art of the rewrite with this free guide.

Can Other Screenwriters Be Brought in to Rewrite the Script?

Once you sign screenplay options, you're signing over the rights temporarily — which means that the new rights holder is free to pitch the project however they want. And they're also free to make any changes to the script as well. Until, that is, the option period expires. Then all rights revert back to you, and any changes made to the script on their end are null and void.

What Do Contracts for Screenplay Options Look Like?

Option agreements vary, but the elements you'll find within are relatively consistent.

• The Option Period
• The Option Payment
• Renewal Period and Payment
• The Purchase Price

The Option Period stipulates the numbers of months the screenplay is optioned for.

The Option Payment dictates what the screenwriter will be paid upfront for that option agreement.

The Renewal Period (with a possible option for renewal fee) will list the timeframe that the signatory company or individual has to renew the contract for an extended option period — as well as how long that renewal period will be for.

The Purchase Price element of the contract will go into legalese regarding what amounts will be offered if the signatory company or individual acquires your screenplay, and how those amounts will be paid.

From major studios and production companies, you can expect a detailed breakdown of payment timeframes, possible point shares (what residuals are offered), etc.

Some of the more contemporary option agreements with smaller companies may not include specific breakdowns of the purchase price, primary because that payout will depend on the package they've put together in terms of director, talent, pre-sales of distribution, and investor investments.

But with most major screenplay options, you'll likely see a Purchase Price section included.

In short, expect a lot of legal-speak, but focus on those above for elements so that you know what you're getting into and what you're getting out of it.

Does My Representation Get a Cut of Screenplay Options?

Yes. If you have an agent or manager (or both), they make their 10-15% fees from screenplay options, just the same as they would for any script sale or paid writing assignment.

What Are Some Final Tips to Consider?

First and foremost, always try to get paid. It's very easy for screenwriters to feel the need to offer their services and projects for free, in exchange for a chance to get a script sold. You need to keep that business hat on and remember that, yes, it's a business — and you have intellectual property that someone is interested in.

Consider all of your options and don't be afraid to ask for an option fee if it's not offered.

You can simply say, "I'd like to be able to be compensated for taking my script off of the market."

If the person or company you are dealing with is truly legit (check their credits on IMDBPro), chances are they'll have some capital to pull from for screenplay options.

Don't expect five-figure fees. Those are generally a thing of the past. Instead, expect anywhere from $500 to $1000. It's best to have them propose a figure first, but, in this industry climate, if you can make $1000 for a 12-month option as a newcomer, that's not too bad. $2500 would likely be on the high-end these days for an unknown.

In terms of Purchase Price, do your best to study up on the WGA Basic Agreement Minimums. This will give you a ballpark estimate of where you can work from in your negotiations.

Read ScreenCraft's How to Negotiate a Screenwriting Contract Without Representation!

No, you don't need to have an agent, manager, or entertainment lawyer to negotiate and sign screenplay options, but it's highly recommended that you do all that you can to attain at least one of those three.

Lastly, do everything you can to research the person or company that is offering to option your screenplay.

• Look them up on IMDBPro (subscription to this site is a must for screenwriters) and check their credits
• Google the individual's or company's name and include the word "scam" to see if anything pops up
• If no money is being offered, and no credits can be found, that's a huge red flag
• Trust your gut and use your best judgment
• Don't be afraid to say no

Screenplay options are relatively simple. Someone is (hopefully) paying you to take your screenplay off of the market for a specified time so they can have exclusive rights to develop it and take it out to interested parties to try and get the film made — and, in turn, get your screenplay sold.

Ken Miyamoto has worked in the film industry for nearly two decades, most notably as a studio liaison for Sony Studios and then as a script reader and story analyst for Sony Pictures.

He has many studio meetings under his belt as a produced screenwriter, meeting with the likes of Sony, Dreamworks, Universal, Disney, Warner Brothers, as well as many production and management companies. He has had a previous development deal with Lionsgate, as well as multiple writing assignments, including the produced miniseries Blackout, starring Anne Heche, Sean Patrick Flanery, Billy Zane, James Brolin, Haylie Duff, Brian Bloom, Eric La Salle, and Bruce Boxleitner. Follow Ken on Twitter @KenMovies

For all the latest ScreenCraft news and updates, follow us on Twitter, Facebook, and Instagram.