Identifying the Copyright Holder
Find out who owns the copyright. This is usually easy. If you are a book publisher, then look on the manuscript or at the cover letter. It should state who owns copyright. Authors also reserve film and TV rights to their works, so if you want to turn a book into a movie or television show, then the owner of the copyright should own those rights.
Check that copyright hasn’t been assigned. An author might already have been approached by a producer to turn a book in a movie. If so, the author might already have assigned those rights to someone. You can check with the U.S. Copyright Office.https://www.nyfa.edu/student-resources/how-to-option-the-film-rights-for-a-book/ You can search the U.S. Copyright Office online at http://www.copyright.gov/records/. Search for both pre-1978 and post-1978 records. You will be able to find more post-1978 records, but it’s important to search both time frames. If you see that the author has already assigned the rights to someone else, then you are out of luck.
Call the author. You should call the author to confirm that they own the rights and that the rights are available. There’s no point negotiating for the rights with someone if they are not available. If you are a producer, then you will need to find a telephone number. Look at the copyright registration. If you can’t find a phone number, then contact the book’s publisher.
Buying the Rights as a Book Publisher
Know who to contact. You will need to negotiate with different people, depending on who you are. Accordingly, you should figure out who to contact about making an offer for rights: If you are a publisher, then you should negotiate with the author’s agent or, if there is no agent, then with the author directly. Foreign publishers will probably need to contact the publishing house which published the book initially. They typically have specialist rights staff that you work with. Alternately, you may need to work with a sub-agent.
Determine the book advance. Book publishers often offer the author an advance, which is an amount of money. The advance is usually deducted from future royalties. For example, if you offer a $10,000 advance, then the author doesn’t begin to receive royalties on each book sold until they have earned at least $10,000 in royalties. There is no easy way to determine how much an advance should be. If the author is unknown, then you might not need to offer any advance. Advances are also broken up and paid in installments. For example, one third may be paid upon accepting the manuscript, another third when the author delivers the manuscript, and the final third on publication.
Choose a royalty rate. Royalties are standard and don’t vary much from contract to contract. However, you need to understand royalties before going into negotiations. Consider the following: Book royalties are typically calculated as a percentage of the retail price. For example, if a hardcover sells for $25.95 and the royalty rate is 15%, then the author gets around $3.90 per book. As a publisher, you might try to get the royalty based on the net price. This is the amount you receive as publisher after the book is sold. Royalty scales can be graduated. In other words, the royalty percentage increases as the number of books are sold.
Get your details in order as a book publisher. An author will want to know quite a bit of detail before agreeing to sign on with you. Accordingly, you should determine the following information before going any further: expected first run (e.g., 10,000 copies) proposed publication schedule local retail price your marketing plans the amount of your advance
Express interest in the work. Call up the appropriate person (author, agent, publisher) and express interest in the work. You should be prepared to discuss how much you are willing to offer as an advance, as well as your expected first run. If what you are prepared to offer is far from what the author wants, they can decline to negotiate with you. You also should be prepared to talk about your publishing house. Ideally, you will have a brochure or a list of published works that you could share with the author or agent. This is particularly important if you are buying foreign rights, because the author might not be familiar with your reputation in a different country.
Negotiate details. Before moving on to draft a contract, you should reach agreement with the author on the details of publication. This will make the contract drafting much easier. Talk about the following: proposed formats for publication (e-book, paperback, hardback) whether the copyright will be in the author’s name or the publisher’s the applicable currency publication schedule length of license any additional rights (such as the right to re-license in your territory) proposed changes price and availability of electronic files who will obtain permission to reproduce illustrations or other images
Purchasing an Option as a Film Producer
Understand options. Movie and TV producers don’t initially agree to buy book rights because they don’t know if they will be able to get the financing to make the movie or television show. Accordingly, they buy options, which give them the exclusive right to purchase the film or TV rights within a certain amount of time.
Get a release from the publisher. After you perform your copyright search, you should have the book’s publisher sign a Publisher’s Release. This form confirms that the publisher doesn’t own any of the rights you are seeking.
Determine the length of the option. An author won’t give you an endless amount of time to publish a book or turn it into a movie, so you need to come up with a length of time. Generally, 12-18 month is standard, though you should push for 18 months. You can try to negotiate rights to one or two extensions at the same price as the original term.
Come up with a fair price for the option. The price you pay for an option will depend on the book’s popularity and whether others are bidding to option the book. If the book is not well known, then you might pay $0 but promise to use your best efforts to get the picture made. Alternately, if the book has been moderately successful and has been out for a while, you might pay $5,000. You should talk to other people in your industry if you have no idea how much to offer. Generally, the option price should be set off against the price you pay for the rights, should you exercise your option.
Negotiate with the author or agent. After you come up with what you’d like to offer, you should call up the author or agent and negotiate. Express interest in the work and be prepared to go first when making your offer. You generally will need to negotiate the following: The ultimate purchase price. Don’t leave this until later. Instead, include the price in your option agreement. Generally, the purchase price is tied to the budget for the movie. For example, 2.5% of the final, written direct budget is standard. You also should negotiate a floor and ceiling (minimum and maximum amount). Net profits. It is standard for authors to get a percent of net profits, though if you are making a film for school then these might not be an issue. Right to acquire the same rights for any sequels. If a book is a big hit, then the author might write a sequel. You will need to buy rights to the sequel, and you can secure your right to purchase them before anyone else. Reversion rights. The author might want a right to reversion to protect against you sitting on the rights but never making the production after you exercise your option.
Exercise your option. If you secure financing, a screenplay, and a cast, then you might be prepared to exercise your option and purchase the rights. You should exercise your rights according to the procedure spelled out in the option agreement. Your option agreement might state that you can exercise the option by sending written notice or simply by beginning principal photography.
Drafting an Agreement
Hire a lawyer. As a publisher or producer, you prepare the contract. You should work with a lawyer, who is an integral part of any business. An experienced lawyer can help you even at the negotiation stage. You can find a lawyer by asking someone else in the business if they would recommend their lawyer. If you can’t get any leads, then contact your local or state bar association. Ask for a referral to a lawyer who handles copyright and literary works especially.
Find sample contracts. You might not be able to afford a lawyer, e.g., because you are a student who wants to make a film for school. In this case, you can try to find sample contracts online and modify them to suit your situation. Columbia University Law School has a sample book contract. The American Bar Association has a sample option purchase agreement.
Allow the author to review the contract. You should have handled most of the negotiations before sitting down to draft your contract. However, you still need to give a draft of the contract to the other party and give them a chance to look it over. If the author suggests substantial changes, then talk them over.
Sign the contract. All parties should sign the contract. Make sure to give the author/agent a copy of the signed agreement and hold onto the original in your principal place of business or in a safety deposit box.
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