This post provides an overview of the six key legal challenges and opportunities to expect in the UK when negotiating to acquire the rights to adapt a book for film or TV. 

Adapting a beloved book into a film or TV show can turn a cherished story into a visual masterpiece. When done right, this can delight existing fans and introduce the work to a whole new audience. Of course, this doesn't always go according to plan (naming no names), but hey, let’s keep things positive.

The journey from page to screen is complex, and it’s not just about creativity – it’s about negotiating the right contract terms. Below, we’ve outlined six key legal considerations filmmakers, literary agents, producers, publishers, authors and screenwriters must address together to successfully and legally adapt a literary work for film or TV.

1. COPYRIGHT - THE BASICS

The owner of a book's copyright holds exclusive rights, meaning no one else can legally adapt the work without permission. Copyright lasts for 70 years from the end of the calendar year in which the author died (see our previous post on this here and here for a UK and Chinese perspective). In other words, unless the author died in 1954 or earlier, you’ll need the rights holder’s consent to adapt the work for screen in the UK.

2. COPYRIGHT - WHO HOLDS IT?

It’s not always the author who owns the copyright. In many cases, ‘film, TV and allied rights’ and ‘rights of dramatisation’ (which for ease we'll call ‘adaptation rights’) are held back by literary agents from the rights that are granted to a publisher. However, in some cases publishing houses end-up holding certain rights (which can be the right to control the adaptation rights, right to negotiate the adaptation rights and, in rarer, cases holding ‘all rights’ - with the author's vestigial interest being simply to receive payment when the rights are sold). A party looking to adapt a literary work will want to be sure (and a publisher will want to make clear) what rights are held by which party. 

It’s crucial to confirm ownership through proper documentation containing warranties from all relevant parties, including the author’s estate if they’ve died. A publisher, where they do not hold ‘all rights’ but control the adaptation rights etc., will need the author's (or author's estate's) consent to any sale of the adaptation rights and the author/estate will need to execute any resulting contract. In all cases where a book has been published, but the publisher is not the party granting the adaptation rights, the producer will require a quitclaim from the publishers confirming that they indeed do not hold any of the relevant rights.

3. COPYRIGHT - THE RIGHT RIGHTS

When you’re granted or granting permission to adapt a book, this usually takes the form of an ‘option’ for a set period of time prior to a full purchase of the adaptation rights. Due to the huge costs of making a film or TV series (and the large acquisition costs of adaptation rights), around 10% of the full purchase price will be paid to the author/publisher. The essence of this ‘option’ is that the producer has gained the sole and exclusive option to acquire certain specific, pre-negotiated rights. These rights should not be left amorphous and it is essential to ensure the language of the full rights acquisition agreement is crystal clear at the point the option is agreed (as if any material points remain subject to negotiation that could make the whole agreement unenforceable).

Caution should be exercised if one of the parties propose a “deal terms” form of an option (merely outlining the basic structure of the option and ‘heads of terms’ for full acquisition of the rights). This type of agreement may be proposed on the basis that it “saves time and costs” in the event the option is not exercised and falls away (as only a relatively small number of books that are optioned actually end-up as TV shows or films). However, this route, which not only may be unenforceable, if the option is exercised the parties will have to rush their negotiation of the full terms when time may be short, leading to increased costs at this stage and the risk of contract terms being agreed more by necessity than their their respective merits. A better option to deal with the fact that only a small number of optioned books make their way to the screen may be via a “shopping agreement”. Such agreements (also known as ‘attachment agreements’) between a producer (or sometimes scriptwriters) and author provide the producer with a period of time (less than that in an option, normally 6-12 months) to attract interest and funding. Due to the shorter timescales, and that shopping agreements are often non exclusive, there may be a small (or even no) fee for this arrangement. If a producer or writer does secure finance and wants to proceed with production, they will then need to agree a licence or assignment of the rights in respect of the author's work. Of concern to authors when negotiating these agreements will be ensuring that any exclusive rights granted to a producer are kept short in duration and producers will want to secure rights to extend the agreement in certain circumstances (e.g. where they are in active negotiations with financiers/film studios) and to protect themselves from being 'cut out' by third parties they have directly or obliquely introduced to the author.

As above, in most circumstances a publisher will not be able to grant these rights, and will be wary about contracting as principal for the author. This is, not least, because: (i) the publisher will not want to give the warranties of originality, non-infringement and non-defamatory content that a producer will typically seek; and (ii) a publisher will not be able to provide a producer with the moral rights waivers the producer needs (these being held by the author as, while they can be waived, they cannot be transferred). The contract should outline the scope of the agreed adaptation rights including exclusivity, holdbacks on other adaptation forms, and precise forms of how the adapted work can be exploited. Publishers and authors will want to clearly define the grant of rights to a TV producer, so that there is still an extant package of rights that can be sold to a film producer (or otherwise to a theatrical company, theme park etc.). Consideration should also be given to potential subsequent spin-offs like sequels, prequels, remakes or origin stories and the parties are also reminded not to forget about elements such as NFTs to merchandising – these need to be negotiated too.

Once a producer has secured the option to adapt a work: the clock starts ticking. An option agreement will include a clause which provides that the option will expire if the producer does not acquire the full rights by a certain date. As a result, producers will want to ensure that negotiated timeframes are realistic (typically between 12 to 18 months without an extension) and that any extension fees are fair (these are normally 5% of the purchase price, and, unlike the initial option fee, are not typically offset from the full purchase cost). Extensions are normally payable for an extra six months of development, meaning that producers will need to ensure their writers and script editors follow robust delivery schedules.

When a producer does successfully navigate the option stage and move to full rights acquisition (more on this below), the author will want to ensure that the rights are not ‘shelved’. A publisher/author will therefore be mindful of including a ‘reversion’ or ‘turnaround’ clause whereby the rights will revert to the author in the event that the producer has not moved forward with production. As with the option, if the film or TV show is not in production within a certain period of time, the rights acquired by the producer will revert to the author. This can be automatic, or contingent on notice from the author and in some cases the producer will require a rebate of some (or in rarer cases all) of the fees paid to the author for the rights.

4. FEES

The financial side can get complicated. As above, typically an ‘option fee’ is paid upon signing, and this is normally set off against the full purchase cost for the adaptation rights if the project moves forward. Option fees are typically flat rates, and purchase prices can be a simple fee, but it is more usual for this to be expressed as a percentage (often 2-3%) of a film's final approved budget (usually this is certified on the first day of principal photography). The main reason for this is that, when a producer is developing the work, it will not be clear whether a film will have an independent release or be picked-up by a major US media conglomerate or a TV show will be exhibited on a minor or major channel. Due to this uncertainty, a publisher/author will normally seek to agree ‘floor’ and ‘ceiling’ amounts. This also benefits the producer should the budget be extremely high and publisher/author where they are extremely low. Additional fees to extend the option may also be payable (see below).

One of the most highly complex and heavily negotiated elements will be the shares each party receives of profits from the adaptation's exploitation. Both parties will be keen to ensure that the full acquisition agreement contains fair division of profits, reflecting amongst other considerations the amount paid by the producer to acquire the rights and how merchandising royalties are split. Authors will look to increase their share by highlighting that films based on books take in 44% more in UK film box office revenue (and 53% more globally) and result in 58% higher UK viewership of ‘high-end’ TV productions, whereas producers will be mindful of profits to be paid to equity financiers in return for funds to help pay for production and the risk they bear if the content does not perform as expected. Of particular concern will be how profits are defined and calculated and key to this will be the deductibles from gross  revenues before profits are reached and shared.   

5. DEVELOPMENT AND FINANCE

Financing a film or TV project can be a very complex process. The agreement with the author or publisher should clearly permit the creation of materials (like proposals, treatments, and scripts) required to attract potential financiers or commissioners. Without the right permissions, producers risk encountering legal issues when securing funding. Publishers/authors will be happy to facilitate this as, equipped with the correct ‘package’ re adaptation rights, producers can secure funding from studios/commissioning bodies to produce a film or TV version that helps drive sales of the author's original work(s).

A producer will typically be looking to have this entire package: (i) the option to the adaptation rights'; (ii) a provisional schedule and associated budget; (iii) the all important screenplay adapted by a screenwriter using the adaptation rights; (ii) an attached director; and (iv) attached/interested on-screen talent. All four points should be in place well ahead of the end of the option period, to allow the producer to secure the funding to pay the full purchase price in the time remaining. In the event this is not possible, then the producer will only have ‘lost’ the original option fee (and any extension fee) and the publisher/author will be in a position to start the process again with another party.

6. CONTROL AND CREDITS

Authors can (and should) be protective of their work and original vision. Inevitable deviations from their original vision may cause friction with the producer's personnel (screenwriter, director etc.). Both the producer and author/publisher will, at the outset, specify what credit will be given to the author and define the extent of their involvement (if any) in the project. The author's input in most cases will be non-existent. However, the most powerful authors can expect limited rights such as consultation over scripts, casting, or key personnel, and whether (in rarer cases) the author will be engaged in writing or editing scripts. These rights will depend on the nature of the project and vary according to the respective bargaining power of the parties. It should be noted that, in any event, maintaining a good relationship between the producer and author throughout the project is key to ensuring both parties are working towards making the project a success and each reaping the rewards that can follow.

This post is just an overview and negotiating any particular adaptation will always require complex drafting with advice turning on the specific facts (and non-UK perspectives may be required for content that is to be exploited outside of the UK). For advice on any of the issues identified in this article, contact Alex Lowe and Duncan Calow of DLA Piper UK LLP.