Q&A: What’s the Difference Between a Screenplay Option and a Book Option?

by Greenberg Glusker Fields Claman & Machtinger LLP

Q:  Is there a big difference between an option for a screenplay and an option for a book?

A:  Did you ever get the magazine Highlights when you were a kid? The one they had in dentists’ offices which had Goofus and Gallant and the hidden pictures game?  If so, you probably played the other game in the magazine where you’d be shown two similar pictures side by side and you’d have to spot the differences.  If there were a Highlights for lawyers, we could play the game with a screenplay option and a book option because the two do appear so similar on the surface.  On closer inspection, however, you’d find a few subtle differences and one major one:  the book option would include a section referring to the author’s “Reserved Rights.”

A screenplay option provides that, on the exercise of the option, the optioning party (e.g., producer, studio, etc.) acquires ALL rights in the script, including the right to turn the script into a movie, a stage play, or even a roller coaster ride.  In an option for a book, on the other hand, the author of the novel reserves certain rights in the book.

The most obvious of these reserved rights is the “print publication” right.  Regardless of whether the book is an unpublished manuscript or a popular published novel, the author (and his publisher) would have to retain the right to publish it (or continue publishing it) as a book.  Therefore, that right is not granted to the producer but is instead reserved by the author.

Other rights reserved by the author are related to non-traditional publication rights such as “book on tape” rights and (welcome to the future) “e-book” rights.  The author may also retain certain rights that may have been really useful in the 1920’s, including “recital” or “straight reading” rights (the right to have someone read the book live in front of an audience) and “radio” rights (the right to read the book on the radio).

A much more important right that is actually still relevant today and may or may not be reserved by the author is the “Legitimate Stage” right, which is the right to have the book turned into a play (intended for “legitimate” stages, not stages whose parents weren’t married).  If you’re an author these days, you’re probably not going to win the fight to reserve this right unless you’re an author of some prominence.  Producers and studios want (and, thus, need) to be able to turn your book into a play, especially if their movie based on your book was a success.  Think Twilight the Musical starring this year’s winner of American Idol.

Another right that should be and is typically reserved by the author is the “Author-written Sequel” right which, in case the name is unclear, is the right of the author to write a sequel (or many sequels) to the book.  The fact that the author reserves this right usually goes without saying, but it’s what the author can do with the sequel is often an area of detailed negotiations.  Of course, the sequel can be published, but can the author sell the movie rights to the sequel?  If you’re the producer with movie rights in the first book, you certainly don’t want some other producer to be making a movie based on the second book.  Therefore, the producer optioning the first book will demand two major protections on the author-written sequels:  (1) a “holdback” which restricts the author from selling movie rights in a sequel for a certain period of time (note:  there’s also generally a similar holdback for the other non-publication rights); and (2) a “first negotiation/last refusal” right which essentially gives the producer the first opportunity to purchase the movie rights in the sequel or, if the author and the producer can’t agree on a deal, the right to match any other party’s offer.

It should be noted that even if the author reserves this right to make movies based on author-written sequels, this right is very often limited to the point that it’s almost worthless.  This is due to the fact that many agreements state that even if the producer who bought the movie rights in the original novel does not acquire the movie rights in the second novel (pursuant to his first negotiation/last refusal right), the author can only exploit the second novel as a movie if the movie does not contain any characters from the first novel.  Kind of defeats the purpose of turning that sequel into a movie, doesn’t it?

One final important note:  if you’re ever optioning a book originally published by a foreign publisher, be aware that unlike in the U.S., foreign publishers often acquire a broad spectrum of rights in a novel that go beyond the publication right.  Such rights can include the motion picture rights.  Therefore, the author may not even have the right to sell movie rights in his book; such rights may need to be acquired from the foreign publisher.

Wow.  Who knew such a short question could produce such a long-winded answer?  I guess I’m now at the point where I get as excited about option agreements as I used to get about Highlights magazine (ugh).  Now it’s up to you to decide whether to be Goofus and remain thinking that book and screenplay options are the same, or Gallant and recognize the major difference.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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