Welcome to Going Bionic, #238. Today we’re tackling the overtly treacherous world of acquiring life story rights. I’ve acquired a handful of life story rights since 1993, which have ranged from buying the rights to a virtually homeless 15-year old boy who went from becoming a local hero, to being a shunned zero, back to a nationally known hero, only to wind up becoming a felon who served nine years in prison, to securing the life rights to an OG (Original Gangster) in South Central Los Angeles, to landing a New York Magazine cover story. Throughout my experience of dealing with life rights, I’ve learned to steer clear of situations that will torpedo deals, whether those deals are landing the life rights or selling them once you’ve secured them. So, for those of you who are currently negotiating life rights, or you are about to embark on the chase to land some, here are three things to be aware of during your negotiations with the selling party.
The Life Rights Are Far Less Valuable Than You Think They Are
Unless the person whose life rights you’re acquiring is a world leader, pop culture icon, or unquestionably revered household name, the rights are worth considerably less than you think. While most people assume their life rights will sell for at least $500,000 to north of $1 million, most life rights are offered $35,000-$75,000. Thus, many deals get squashed before they get started, because the people who are selling their life story feel slighted by the offer. Sure, there are the occasional seven-figure deals, but those are reserved for stories that wrangle enthusiastic interest from A-list actors, coupled with a major studio that’s willing to spend $50-$75 million or more on the production, plus $25-$35 million more in P&A.
Using A High Purchase Price To Secure A Low Option Amount Will Most Likely Backfire On You
Many producers think making lofty purchase price offers – like $500,000 to $1 million, is a smart way to get a low option price of $500 to $1,000, or even as low as $1. In other words, producers like saying, “let me option your life rights for a nominal fee, and I’ll work my a*s off to sell your rights for a large sum of money.” The problem is, if the “purchase price” you promised the life rights holder is obscenely greater than the real value of the rights, you’ll find it virtually impossible to get a studio or investor(s) to acquire and fund your project. Simply put, nobody wants to overpay for anything, regardless of his or her ability to do so. Thus, cost of acquiring life rights should stay between 2%-5% of the final approved budget, which is $20,000-$50,000 per $1 million of the budget.
You’ll Need Way More Time On Your Option Than You Think
Six months will feel like six minutes, because every place you pitch your story to will take several weeks to get back to you with an initial response. Furthermore, you’ll need a great screenplay to entice actors, financing or distribution. Thus, you have to give yourself at least three to five months before your screenplay is good enough to approach A-list actors, studios or financiers. Remember, the last thing you want to do, is to agree to a short-term option that will severely limit, if not completely kill any chance you may have of getting your project made.
As for my suggestions for the length of the option, I’d start by asking for three-years. If your client-to-be balks, ask for two years, and then go down to 18 months or even 12 months if need be. Allowing ample time to develop life rights into a viable, funded motion picture is going to take time.
Subsequently, one of the most important elements of your negotiation is your re-option, meaning your agreement should have terms in place to allow you to exercise an equal length of time as the initial agreement, should you choose to exercise it.
Okay, that’s what I have for you today. As always, I thank you for lending me your eyes, and I look forward to borrowing them again next Tuesday. Until then, I hope you have a great week! I can be followed on Twitter @Lonelyseal.