You have stumbled across a book which you think will be perfect for your feature film debut. How do you go about acquiring the rights? Here is a quick guide from Sarah Lazarides, a senior associate at law firm Harbottle & Lewis

Born Yesterday

First you will need to find the owner of the film rights in the book. Tracking down rightsholders is a topic in itself, and one which we will cover in more detail later on in this series. Briefly, the film rights will normally be held by the author or the publisher of the book. The publisher will be listed in the book and larger publishers are well-equipped to deal with optioning enquiries (including pointing you in the direction of the author’s agent if they don’t hold the rights).

Once you have contacted the rightsholder and established that film rights are available, you will need to negotiate the option. An option is an exclusive period during which you have the ability to commission scripts, raise finance and otherwise develop the film, in the knowledge that competing projects will not be developed at the same time.

Option agreements come in various forms, but normally have certain key components:

  1. Option Fee:  there is no industry standard fee for optioning a book - it will depend on the book’s popularity and the amount of competition for the rights. You may have to pay upwards of £50,000  to option a bestseller for 18 months but could option a lesser-known/older book for a nominal fee. Stephen King famously grants options in his short stories for $1.

  2. Option Period – usually 18 months. Make sure you include a right to extend, ideally for a further 18 months, as realistically it may take around 36 months to take a film from early development to a fully financed project.

  3. Rights following Purchase – on exercise, the producer should acquire all rights in the book throughout the world for the full copyright term, subject to the author retaining certain rights (normally publishing, radio and stage rights). Where possible try to acquire, or at least co-own, stage rights, as they can be lucrative. Ensure that the option agreement actually provides for an assignment of rights once the option is exercised.

  4. Purchase Price – this is usually roughly 2.5% of the budget, after certain deductions (completion guarantor and legal fees, contingency, insurance premiums, deferrals and finance charges). It is normal to include a maximum and minimum purchase price – the former gives the author comfort that they will receive at least a certain sum and the latter protects the budget of the film in case unexpected changes (such as the attachment of an A-lister) lead to a significant increase.

  5. Author Sequels – if the book is part of a series or planned series, ensure you have the right to acquire future books in the series on the same terms.

  6. Warranties – these are promises from the rightsholder and are important to include, as they give you and your financiers certainty that the grant of rights is valid.

The above is a brief guide only, and option agreements generally contain other terms and protections for the producer. Ideally you would get a lawyer involved at an early stage, as they can give you a sense of what is industry standard, as well as negotiating deal terms on your behalf and preparing a form of agreement.

Industry bodies such as Pact can also give you guidance.

Sarah Lazarides is a Senior Associate at law firm Harbottle & Lewis