Screenwriting : Shopping Agreement or Option? by Gilberto Villahermosa

Yes. I would also add a shopping agreement may be more common with existing relationships. If someone I knew wanted to see if they could fund something, I would gladly give them a shopping agreement so they are standing on solid ground. If I don’t know you, give me money.

They are the same thing. Small fee as little as a $1 for the right to develop the project, which is essentially to go out and find money and a home for the script. Usually 1 year, sometimes 1 1/2 years. Clauses stating # of expected rewrites. Pay on start of production. With some clause around renewing the option. There was a time that writers might have received $5k-$10k for an option, but those days are gone except for top writers. This is for optioning a script, not a development deal based on a pitch. Most options die without being renewed.

My personal opinion for what it's worth: An option is a guaranteed sale. A shopping agreement is agreeing to lend someone your script (for free) in the hopes that they can get it funded and get you a sale. My personal experience: I was offered an option for 12K or a shopping agreement. They made the shopping agreement sound great, with better upside potential on sale and more creative control over who makes the film. In other words if they found someone to make the film that I hated, I could walk away. I went for the Shopping Agreement, the producer had funding and lost the deal, then lost interest in my script. End result? Want to see my script? It's available LOL.

If it's an option for a dollar (Like Christopher says), then its really a shopping agreement that's binding (Locks you up). Anyway that's my personal experience, I'm no expert.

An option is FAR from a guaranteed sale. When I deliver a script to my Agent he has a shopping agreement simply by our relationship - he doesn't pay me for it nor do I pay him to take it wide. Our business relationship is solely based on mutual agreement and understanding - we don't need no stinkin' contracts.

Doug, isn't an option by definition a sale? You're selling the option to your script, right? That's what I meant. It is by no means a guarantee your script will be produced.

I believe the major difference between the two is that in a shopping agreement, the IP is borrowed, with the writer and producer negotiating their own separate deals with the buyer/studio/distributor. The writer, knowing there is already a deal on the table between producer and buyer, could use this to leverage a higher principal sale for his/her works. With an option, the IP is purchased and owned for the period of the agreement, and the principal payment and any addt'l frontend and backend participation is already determined within the contract. The pros of an option is the sale upfront for the writer with the producer possibly working harder since they have $$ invested (but not with a $1). The con of the option is the writer loses out on building a relationship with the buyer/distributor/network. I've known some writers who have done well simply optioning a work over and over. However, if the option $$ is not substantial, I'd go with the shopping agreement. Who do you want to negotiate with? An initial and sometimes smaller producer or the major studio?

Thank you everyone for your input. Great food for thought!

Joe - an option is not a sale; it's more of a rental agreement in which the writer gives up certain rights to the script for a specified time only. A sale is surrendering certain rights in perpetuity - it's final.

Joe if you are sale money changes hands for a good or a service then yes. The option I have executed have always had the final sale price in it. Something like a deposit with an expiry date.

I guess I could respond with "you sold the option to your script" sold something = sale, but I think we're just splitting hairs here. My original point stands. An option (you sold something and earned money for your work) according to the guild you earned money as a screen writer and points towards being eligible A shopping agreement is just an agreement. Could lead to nothing. Anyway that's my two cents.

Dan, after dealing with the same types of comments in these forums year after year - I'm rapidly approaching my own exasperation date here. Thanx for the laugh.

Over the definition of a sale? That's rich.

Two entirely different "perceptions" of what a sale is could coexist, if we would only allow for them.

Pidge the peace maker :)

Dan Guardino when I was offered an option, I wrote home about it, but I guess we're at very different stages in our writing careers :)

Dan, I love your comparison -- "Best to talk to your $250+ per/hr. lawyer about your new $1 option." Let's face it, severely frugal producers may offer the $1 option scenario spreading through industry forests like fire these days. Yet, there's nothing wrong with a counter-offer on your part reflecting a more reasonable $500-$1000+ as you provide a wake-up call to the producer similar to Dan's scenario. If it's a friend in the business who's really keen on helping you, we get it. Keep in mind, your having to pay an ent. attorney (2 hrs at $250-$450/hr.) to write up/look over their $1 Option Agreement could be a good opening statement to your counter-offer, not to mention lending your project out for an exclusive 18 months. While they may like your script, if they can't afford you more than $1 on the pre-production budget line under "Writer Fee", they're already not thinking highly enough of you. Make them appreciate the skill sets they already recognize in desiring your story and script. If on the other hand, you-the-Writer shouts out an "I'll do it for a $1" before their initial Ask, then perhaps, you need to appreciate you. Maybe all that stands in the way of a lucrative option sale is you. If you do exercise the $1 Option Sale, make sure the later Principal Sale of your IP and script (normally stated within the same Agreement) reflects these initial marginal savings for them with an above-the-standard rate for you.

Thanks Dan! Great info! You're always a very helpful guy!

Great video dan

A little late to the party but I'm in favor of shopping agreements vs. options. An option locks in the purchase price, which could either work against you (too low), or against you (too high and kills the project). A shopping agreement potentially makes partners of the writer and producer, if the project moves forward.

So far I've just been on a shopping agreement. Hoping to find out what the option process is really like.

I had a five-figure option for 2 years back in the 1990's, with $80k due the day "film hit the gate" (aka "start of principal photography.") There's been 100% inflation since then. However, now shopping agreements with $0 investment up front and still around $100k on the back end seem more common. Hmmm. Well, still better to get some recognition and interest in what you've created than not! The "shopping agreement" vs. "option" issue is a nice problem to have!

depends on how much trust and confidence you have in the person who offers shopping agreement. I have 7 (I think now) $1 options with the promise of an 'amazing back end deal' but I had no faith in any of these people. It wasn't just because they didnt have any credentials (even producers have to start somewhere) it was just I truly did not believe things they said or that they could get the film to fly. I had no faith or belief in them. And once you sign, you're locked out from market with that script for the agreed time period. Id personally prefer an option, but wouldn't say no to a shopping agreement that was sound and with the right person.