Entertainment lawyer Dinah Perez, Esq. wrote “The Legal 411 for Screenwriters,” section of the Hollywood Screenwriters Directory, available here. In the Q&A below, Ms. Perez shares a bit of her vast expertise on the topic of screenplay purchase prices. Many additional insights about screenplay rights and dealmaking can be found in her truly informative contributions to the Hollywood Screenwriters Directory.
Cedar Boschan: What is a standard purchase price for a screenplay?
Dinah Perez: There is no such thing as a "standard" purchase price for a screenplay. WGA members cannot accept less than the sum prescribed in the WGA Schedule of Minimums, but can exceed the minimum, and non-WGA members can sell their screenplays for any price they are able to negotiate. Sale prices typically range between 1% and 3% of the cash production budget of the picture.
Boschan: What factors do producers consider when making an offer?
Perez: Producers consider the screenwriter's track record; whether there is a bidding war for your screenplay; whether the screenplay is based on a best-selling novel; whether it is about a salacious, interesting or well publicized person or event; the screenplay's genre; and, if known ahead of time, the picture's potential production budget.
Boschan: Can you share any negotiation tips to get the best price?
Perez: If the production budget is not known going into the negotiations, I suggest a purchase price based on a sliding scale, e.g., "for a picture not to exceed $15,000,000 dollars, the purchase price shall be 2 ½% of the cash budget of the picture, but in no event less than WGA low budget minimum and no more than $250,000. The purchase price will be increased by $10,000 for every $1 million increase in the picture's production above $15,000,000 not to exceed a total purchase price equal to $500,000." The attorney attempts to secure the highest ceiling possible while the producer tries to limit it.
Boschan: Technically, what is an “Option?”
Perez: You acquire the rights to a literary work by entering into an “Option/Purchase Agreement” whereby you have the exclusive option to buy said literary work for a determined period of time. The Option/Purchase Agreement has two components: the Option Agreement (“Option”) itself states how much time you have to buy the literary work, and the purchase agreement includes the sale price and rights to be granted. You purchase the literary work by exercising the Option and paying the purchase price prior to the Option’s expiration date. You do not actually purchase the literary work until the commencement of principal photography – when you know that the picture is being produced.
DINAH PEREZ graduated Loyola Law School and has been in the practice of entertainment law since 1996. She practices film, television, theater, music, new media, publishing, copyright, and trademark law. She enjoys practicing entertainment law because she has great respect for the arts and those who create, and relishes helping her clients attain their professional goals.
Ms. Perez has been published in Story Board Magazine, Release Print, Script Magazine, “The Screenwriters Guide to Agents and Managers,” and “The Hollywood Screenwriting Directory”, and “Hollywood Screenwriters Directory” (2014). She recently entered into a publishing agreement to co-write the “Hollywood Producers Directory” (2015). Ms. Perez has been quoted in Entertainment Weekly, Wired Magazine, Wired.Com, and featured in “Alone In A Room.”
Ms. Perez has participated in panels and/or spoken at the Black Hollywood Film Festival, the Latin Heat Film Festival, Women in Film, Cinewomen, Independent Feature Project West, American Film Market, the Inktip Pitch Summit, the Screenwriters World Conference, the Writers Store, and the Showbiz Store and Cafe.
She is a member of the Beverly Hills Bar Association (Entertainment Law Section, Executive Committee), the California State Bar, Film Independent, and NARIP (National Association of Record Industry Professionals). She was a founding board member of Cinewomen in Los Angeles, CA.