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  • Writer's pictureLindsay Spiller

The Differences Between an Option Agreement and a Shopping Agreement in Film and Television

Updated: Dec 31


A picture of someone with a remote facing a television screen
An entertainment lawyer can advise you regarding option or shopping agreements

When creating a film or television project, there are many legal and business considerations to remember. Two common ways to secure the rights to a story or concept are through an option or shopping agreement. While these two agreements are often used interchangeably, they serve different purposes and have distinct legal implications.



Option Agreement


An option agreement is a contract that gives a producer or production company the exclusive right to purchase the rights to a story, script, or idea for a specified period. During the option period, the producer has the right to develop the project and raise financing, but they do not own the rights to the story or concept outright. Once the option period ends, the producer must purchase the rights or let the option expire.


Option agreements are commonly used in the film and television industry to secure a story or concept rights while the producer raises financing or develops the project. An option agreement typically includes payment for the option period and the purchase price for the rights if the producer decides to exercise the option. The terms of the agreement will vary depending on the project's specifics, including the length of the option period, the purchase price for the rights, and any contingencies that must be met before the option can be exercised.


Shopping Agreement


On the other hand, a shopping agreement is a contract between a producer or production company and a writer or creator that allows the producer to shop the project around to potential buyers, such as studios or networks. Unlike an option agreement, the producer does not have exclusive rights to the project, and the writer or creator retains ownership of the rights.


Shopping agreements are often used in the early stages of a project when a producer is looking to generate interest from potential buyers. The agreement typically outlines the terms of the deal, including the commission the producer will receive if the project is sold and any deadlines or restrictions on shopping the project around.


Key Differences


The main difference between an option agreement and a shopping agreement is the level of control and ownership that each party has over the project. With an option agreement, the producer has exclusive rights to the project for a specified period, allowing them to develop and finance the project without interference from other parties. With a shopping agreement, the writer or creator retains ownership of the project, and the producer acts as a representative to help sell the project to potential buyers.


Another critical difference is the length of the agreement. Option agreements typically last for a defined period, with the producer having the option to extend the deal if necessary. On the other hand, shopping agreements do not have a set end date and may continue until the project is sold or the parties decide to terminate the contract.


Conclusion


Both option and shopping agreements are essential tools in the film and television industry, and understanding the differences can help ensure that a project is adequately protected and financed. Whether you are a writer or creator looking to protect your intellectual property or a producer seeking to secure the rights to a good story or concept, it is essential to work with experienced legal counsel to navigate the complex legal and business considerations involved in these agreements.


Spiller Law is an advisor to filmmakers, artists, and production companies. Feel free to schedule a free consultation.


 

Spiller Law is a San Francisco business and entertainment law firm. We serve clients in the San Francisco Bay Area, Silicon Valley, Los Angeles, and California. Feel free to arrange a free consultation using the Schedule Appointment link on our website. For other questions, feel free to call our offices at 415-991-7298.

 

The information provided in this article is for general informational purposes only and should not be construed as legal advice or opinion. Readers are advised to consult with their legal counsel for specific advice.

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