Ask the Coach: Who Owns the Sequel Rights to My Script?

In this installment of "Ask the Coach" Jenna Avery answers a pre-submitted question about who owns sequel rights to your screenplay and why adding an entertainment lawyer to your team is beneficial when negotiating screenwriting contracts.
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Welcome to “Ask the Coach.” As a writing coach, I answer questions from writers about making the work of writing happen, tackling craft, business, and personal questions along the way. (Got a question you’d like answered? Check out the details at the end of the article about how to submit one.)

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Today’s question is about the ownership of sequel rights:

“I’m writing a script which has obvious sequel potential. If I am fortunate enough to sell the script, (assuming boilerplate contract) who will own the rights to the sequel, me or the studio? Asked in another way, when I sell the script, am I selling the brand as well? I have several script projects with sequel potential, so this is a big question for me.”

Such an intriguing question, and I’m sure one many writers share. Since this is ultimately a question for an entertainment lawyer, I reached out to Michael Saleman of www.movielaw.net for his expertise. To a degree, the answer about how these types of rights work can be dependent on a writer’s leverage.

Here’s what Michael says is the standard practice for an option agreement: “When sequel/prequel/remake rights are granted in an Option Agreement, it is standard to place a passive royalty that generally provides that if a sequel or prequel is produced, the screenplay owner receives 1/2 of the original purchase price. If a remake is produced, then the screenplay owner would receive 1/3rd of the original purchase price, all payable upon commencement of principal photography of any sequel/prequel/remake.”

In other words, a standard contract typically includes a pre-arranged agreement for sequels, prequels, and remakes for a fee ranging from 1/3 to 1/2 of the original purchase price for the first script!

[Ask the Coach: Help! Do I Abandon My Current Script for a New Idea?]

However, Michael adds, “Keep in mind that whether or not the writer has to grant sequel rights may come down to the negotiating leverage of the producer vs. the owner of the screenplay.” What this means is that if a screenwriter (or screenplay owner, which may differ!) has more leverage — for example, if the writer or script is in high demand — the screenplay owner and their lawyer may be able to negotiate a different contract.

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Michael specifically works to insert three clauses into his writer’s agreements, including:

1) The screenplay owner grants only “a one picture license.”

2) The sequel, prequel, and remake rights are reserved by the screenplay owner and the producer is offered “right of first negotiation/last refusal” and a “holdback as to when a sequel/prequel/remake can be produced following the release of the original motion picture.”

3) The “characters are reserved to the screenplay owner.”

In particular, the reservation of the character rights strike me as essential to retaining control of one’s brand, in addition to the more obvious aspects of reserving rights for additional films and their timing.

Michael adds, “It is no secret that [a] producer wants to get as many rights as possible, especially when there is franchise/sequel potential.” While he shares that it doesn’t work every time to insert these clauses — again, primarily due to the screenwriter’s leverage — “if the screenplay owner feels that strongly about retaining those rights and the producer refuses, he or she can always walk away from the deal. Many times that is hard to do, especially if there are no back-up offers.” In other words, you may or may not be able to reserve these rights, depending on who you are as a screenplay owner and/or screenwriter, whether the script is in demand, and more.

[IT DEPENDS: Sequelitis or Hollywood’s Obsession with Movie Sequels]

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That’s a Wrap

Perhaps most importantly, the key takeaway here is the value of working with an entertainment lawyer when negotiating screenwriting contracts, to make sure you’re protecting your rights now and into the future. Whether you’re wondering about sequel rights or making sure you’re signing a good option agreement for a single script, having a lawyer on your writing team is an excellent move.

Thank you for your assistance, Michael!

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Submit your question to be answered anonymously via my online form here or send an email directly to askthecoach@calledtowrite.com. Look for answers to selected questions in my monthly “Ask the Coach” column on the third Thursday of the month. And reach out to me on Twitter to share your thoughts: @JennaAvery.


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