If you want to thrive in the independent film world, this is a term you need to become familiar with. It’s an agreement made between a distributor (usually foreign and specific to only one country) and the production company before the film is completed and often times even before production of a film has even commenced. This is a strategy that producers use to get their film financed. You may here that a producer financed a film via foreign presales alone. This means that a distributor will pay for the distribution rights in their country before they even see the finish product. In return, they will get to pay a significantly reduced cost for these rights as opposed to if they waited to buy the rights to the film in the open market upon completion. They are banking on the film doing well in the box office based on the script, director, producer and actors that are attached to the film. Some presale agreements involve the distributor and producer agreeing – prior to production – on a fixed amount to be paid upon delivery of the film. This is called an advance or a minimum guarantee.
Chain of title is a trail of documents which illustrates the change/transfer of ownership of a piece or property from the moment it was created to the current point in time where you claim to own the rights to the property. Having an improper chain of title means that you have no clear certainty/proof of your ownership of a project. If indeed you do not own the rights to your project, you are not legally allowed to produce and distribute the film. Chain of title is paramount to making your film.
A lot of times, a project in development will not make it into the production process. When this happens, the project is abandoned by the studio and placed into turnaround. This gives the opportunity for the producer to shop the project to other studios or film companies who might show more interest in producing it. Although it may seem like the original studio is “giving up” the rights to the project, if the elements of the project change – for example, a new lead actor gets attached, or a new director is attached – the original studio has the right to reclaim the property and produce it.
An option is the right to acquire a piece of property by subsequent payment of additional money. Once you have discovered a piece of property that you want to acquire the rights for, the first thing you usually do is make an option agreement with the owner. With an option, you pay a small sum (this could range from one dollar to 20% of the overall purchase price) which then allows you to acquire the right to purchase the rights within a specified period of time. In other words, you are paying to reserve those rights in case you decide to buy them in the future. The specified period of time is known as the option period. You can negotiate the length of this time with the owner. During this time you as the producer will try to put the movie together by assembling all the appropriate elements. Should you decide that you want to own the rights and exercise your option, you would pay the remaining amount of the purchase price. Should you decide not to exercise your option, the rights would then revert back to the owner.
If you are looking to acquire the rights to a book and approach a studio with it, be cautious. Most books are offered to studios for motion picture production during the release of the publication. Every studio has their literary department read and write coverage on the book. Most of the time, the book is rejected, and the coverage will be filed away. The book already has a negative label on it, therefore it would take something significant such as a screenplay writer, director, or movie star attached to the project before a studio will re-consider the book.
To see if the motion picture rights are available for a book, contact the publishing house and ask for the subsidiary rights department. In most cases, they will refer you to the author’s lawyer or agent. In some cases, however, the publishing company will own the rights in which case, you can speak with them directly.
A right is permission given by the owner of a certain piece of property to use his or her work. There are specific things you should do when attaining the rights to a piece of property:
– Make sure whoever is selling you the rights indeed owns the rights. Have him/her present the property documentation proving that they are the rightful owner
– Make sure you have a written agreement. Hire an entertainment lawyer if you can afford one.
– Make sure there is consideration. Something of value has to be exchanged by both parties. In other words, you must pay something for the rights – even if it’s one dollar. You can’t attain rights for free.
– Specify what type of rights you are getting. There are many types of rights and it is important for both parties to know what types of rights are being exchanged. For example, the owner may only want to give you motion picture rights, but not television rights.
– Make sure you specify a term in which your ownership of the rights will last.