Summarize:

Entertainment lawyers specialize in the legal aspects of the entertainment industry, including optioning film rights. Since they are so well-versed with the process, they are invaluable to those seeking to purchase the film rights to an established work. This is the preferred method because you don't pay as much up front. The option requires you as the potential buyer to pay the author an amount of money for the option to purchase the film rights. The contract typically lasts for a specific period of time, during which you may try to get everything together to execute the production of the film. Once you are ready to produce the film, you will then exercise your option to purchase film rights. If the option deal doesn’t go through, the author may, depending on the agreement, retain the initial payment amount and any renewal amounts received from the buyer and still keep the movie rights with the ability to sell them elsewhere. This time frame can vary and can include extensions on the initial period of time that often require another payment to the author. Often, the option period will last 6-12 months. Extensions may last 3-6 months. You may also ask to renegotiate the option instead of ask for further extensions. You’ll have an initial payment, which may be a percentage of the total purchase price, and the amount you’ll pay for any extensions included in the agreement. The initial payment may very likely go toward the purchase of the film rights once you take the option to buy them, but extension payments may not. Maximum percentage-based initial payments usually fall within 2.5 to 5 percent of the purchase price. The author may want a small percentage of the proceeds of the film to go to them, should you go through with the purchase and produce the film. This is generally a small percentage of those proceeds and can be negotiated prior to signing the agreement. These productions might include sequels, prequels, or even television series that are based on the original literary work or first film adaption of the work. There are some industry-specific figures for these royalties, including a royalty of 1/3 the purchase price paid for the rights of the original work per remake, etc. Television films and series may have different, yet negotiable royalty shares. You should make clear the rights the author reserves in the option agreement. These may include publication rights, the right to publish sequels, prequels, or other canonical works, or other rights. If the author has particular rights that he or she wants to reserve for him or herself, be sure to include them in the option agreement. You may need a lawyer to assist you in the signing because the agreement will be written using specialized legal verbiage. After signing the agreement, pay the writer the option price.
Secure the advice of an entertainment lawyer. Prepare a rights deal with an option agreement. Set an option period for the deal. Establish the option payments. Include back-end compensation for the author in the agreement. Determine the amount of any royalties you’ll pay to the writer for subsequent productions. Include reserved rights in the agreement. Sign the option agreement along with the writer and pay the agreed option price.