By Paul Renney, Solicitor In The IP, Media and Technology Team.
As The King's Speech walks away with four Oscars, Paul Renney, who advised the writer, explains how film producers go about securing the rights to the screenplay.
British-American playwright and screenwriter, David Seidler, recently walked away with a justly deserved Oscar for best screenplay for the independently produced The King's Speech - beating off hot favourite, Columbia Pictures' the Social Network.
Have you ever wondered how the story becomes the film?
Paul Renney advised David Seidler on his various agreements with the producers of the film, and explains the process involved when advising such a writer. Client confidentiality prevents precise terms being revealed, but the general approach is as follows.
The story usually begins with an existing work, a book, a stage play, or in the case of this film, a screenplay. Producers who are interested in developing this into a film or other media product, need to acquire the rights to do so. However, usually film producers do not have sufficient money lying around to buy the necessary rights to make it into a film with just one payment.
Instead, they look to acquire an option to purchase the rights. This means that they agree to sign a short-form option agreement, which has a long-form rights assignment or purchase agreement attached.
They pay a relatively small amount to the rights owner on signing the option, which gives them the exclusive right to exercise the option by paying a more substantial amount after a period of time. The second payment is usually a percentage of the budget for the film at the time. As the option agreement and the long form are negotiated at this early stage, the legal costs can be quite significant and often exceed the initial option payment, but if the larger payment is made, and the film is a success, amount to a small sum by comparison.
The reason behind this option arrangement is to allow producers to develop the project. If it is book or play, they do this by getting a writer to draft a synopsis or early draft screenplay. They then consider who might direct such a film, as this is likely to be critical to its success. Once a director is identified, they work with them, and casting agents, to consider and approach potential actors and actresses to star in the film.
At the same time, they begin to look for the necessary funds to make the film. This requires an outline budget, worked on with the chosen director, and they approach various parties who might put up the funds to enable them to make the film. These can include broadcasters and film finance companies. The BBC and Channel 4 passed on the opportunity to get involved with The King's Speech and are undoubtedly regretting that decision. Another source may be "angels" who provide smaller amounts of early development monies - they are so-called because the saying goes that they reap their reward in heaven, although for The King's Speech it is coming earlier than that! The producer will try many other providers of funds; the UK Film Council, which is sadly soon to be lost, put in just over £1m at a crucial time.
The producer may even sell the rights to film distributors for certain territories in return for upfront payments. This approach was used much more in the past, where pre-sales often financed a large part of the budget, but of late this practice has declined. Of course, at this stage, with a film existing only on paper, the pre-sales monies will not be as large as when offering a near completed film to such distributors.
It is a classic chicken and egg situation. Until a director and a good cast is on board, investors or funders are less likely to agree to provide funds. Usually, once a director has been pencilled in, approaches to potential cast members can be made and as these people again get "pencilled in", the film has more potential value and is more attractive to investors.
However, everyone has not only a price but also a timetable with existing and potential commitments, and it can become a juggling game to get key actors and actresses to commit before the funds are there to make the film. Once they are shooting the film, some may well have to fit in with existing commitments. For example Helena Bonham-Carter, who played the Queen Mother, was also filming Harry Potter and the Deathly Hallows over the same period.
This is why only a small amount is paid to sign the option, until the funds have been committed and the director and cast can be contracted to be involved.
At the same time, the script needs to be written. In the case of The King's Speech, it was not so difficult as the producers, early on, decided that Mr Seidler was the best option to write the screenplay. A separate writer's agreement was concluded for a separate writer's fee. Under this, various drafts were provided as the project developed and he was actually on set during the shooting to tweak any lines that may not seem to work when being filmed. This provides flexibility to take into account how the story and characters develop during the film.
All these development stages are undertaken before the bigger sums are paid to the rights owners, when the producers finally push the button and sign everyone up: cast, crew, financiers, etc. Then it is possible to start rehearsals and shooting. From then on, it is up to the director and cast to make the best film they can.
At this point, the producers work is mostly done until they have a completed film to take to distributors and the public and, they hope, the nomination panels for the awards.
Forgive the pun, but this slightly stuttering start can lead to wonderful results, as we have seen! As to how the profits derived from the film are divided, that is another story!
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