"The Option, The Sale, The Rewrite & The Meeting" or "We Don't Need No Stinkin' Option"

(February 1997)

A writer has a completed script, and wants to sell it. A Company is interested, and is contemplating buying it, but doesn't want to pay the full price now. It also doesn't want anyone else considering it at the same time. "We want an option," the writer hears. "Six months. For a dollar." The answer should be: "Not for less than WGA minimum."

OPTIONS

Simply stated, the Writers Guild Agreement regulates options. Other than a limited exception in television for so-called "if-come" deals (see below), a Company may not take a writer's completed work, "test the waters," and have the right to set it up it, without having paid for such a right.

If the writer is a "professional writer" as that term is defined in the WGA Basic Agreement (or the writer's individual contract provides the writer shall be treated as such), the Company must pay not less than WGA minimum for an option. What is an option? It is a right, given in exchange for something of value, to subsequently purchase a literary property at an agreed upon price and terms, within a specified time.

For a theatrical motion picture, the Company must pay not less than 10% of the applicable minimum due upon the sale of such material, for each option period of up to 18 months; for television, the Company must pay not less than 5% of the applicable minimum due upon the sale, for the first option period of up to 180 days, and 10% of minimum for each period of 180 days thereafter. (Minimums may be verified through the use of the Schedule of Minimums, available through the WGA [(323)782-4520]; to obtain more information, call the WGA Contracts Department [(323)782-4501].) All of these minimums may be credited against the purchase price, unless such crediting is prohibited in the writer's individual contract. Therefore, material may not be optioned for $1.00 or $10.00, or for any amount less than Guild minimum, and writers and agents should be aware of the requirements for qualification as a professional writer. (Of course, writers may always negotiate for compensation above the minimum rates.)

"IF-COME" DEALS

An exception to the option requirement described above is the "if-come" deal, applicable only to television motion pictures (Article 13.B.1.a.). The rule provides that money need not be paid to the writer for the period during which the Company is actively seeking licensee interest or other financing. The writer's deal must be fully negotiated, so that in the event the Company's efforts are successful (the "if" part), the writer will have his/her deal already in place (the "come" part"), and be attached to the project. As the consideration provided by the Company for the "if-come" is the Company's active efforts, specific time periods cannot, logically, apply; if the Company's efforts have ended after four weeks, for example, the Company has no further rights thereafter, unless there are further negotiations.

Similarly, the Company may not engage in development during the "if-come" time frame, and writers (including the "if-come" writer) may not be employed. The Company has only the right to obtain financing or to generate network interest during this time.

SHOPPING

The rules for shopping of material are different than the rules for options. "Shopping" is the submission of literary material to a third party. Unlike an option, there is no exclusive right to shop, nor is there a guaranteed right to buy property at a set price.

The Company may not shop television literary material to any third parties without first obtaining the writer's consent (in a separate written document) to do so.

The Company may not shop theatrical literary material to any third parties if the writer requests, in writing, that the material not be shopped.  The writer may request (again, in writing) that the script be shopped only to designated third parties, and the Company must comply with this request. Therefore, to preclude Companies from shopping to outside parties, a writer must request in writing that a Company not do so.

GUARANTEED REWRITE/MEETING

[The following applies only to original scripts (to which separated rights apply)]:

Options: When a script for a theatrical motion picture or longform television motion picture is under option, the Company is obligated to employ the writer of the original material for the first rewrite of the material at not less than WGA minimum.

Theatrical motion pictures: The first rewrite rule also applies to original material sold. In addition, for both employment and sales, if the Company contemplates replacing the writer, a senior production executive who has read the writer's material shall meet with the writer to discuss the Company's view and give the writer a reasonable opportunity to discuss continuing services on the project.

Also, the writer who sells original material and has performed the first rewrite must be given the opportunity to make an additional set of revisions if there is a "changed element" (e.g., new director, principal actor) within two years (or three, for material originally written under the 1995 MBA) of the writer's latest writing, provided no other writer was engaged before the changed element was in place.

Television motion pictures: In longform television, it is important to determine whether the Company is signed to the Network MBA or the AMPTP MBA (please call the WGA Signatories Department [(323)782-4514] for this determination). Both agreements provide for the first rewrite to the writer who sells or options original material, as time permits; however, note the following differences.

The Network MBA (signed by the traditional networks and many independent production companies) also provides that, for both longform employment and sales, if the Company contemplates replacing the writer, a senior production executive who has read the material and has decision-making authority shall meet with the writer to discuss the Company's view and give the writer a reasonable opportunity to discuss continuing services on the project.

The AMPTP MBA (generally signed by the majors and affiliated companies) provides that if the Company wishes to replace a writer employed to write an original longform teleplay, it will inform the writer of the reasons why the writer will not continue on the project.

CONCLUSION

Writers' material and services are their "stock in trade"; the above provisions protect that stock. Writers must receive Guild minimum compensation if their material is optioned, and if their material is original, they must be given at least the first rewrite. Finally, they should never learn after the fact that they've been replaced. Please contact the Contracts Department [(323)782-4501] to determine rights in specific instances.