“How much should I pay for an option?”

A great question comes from one of my readers on the left coast.

What do you do when, after spending years reading every script that comes across your desk and attending every festival in the free world, you finally find the holy grail of new shows!

Clear off your calendar, because you’re ready to sink the next few years of your life (and the next few years’ salaries) into getting this show off the page and onto the stage!

But before you book a theater, you better make sure you have the right to book a theater.  Time to option the property.

But how much do you pay?  Is there a third party appraiser?  A blue book for scripts?

The antiquated APC from The Dramatists Guild sets the first option for a new musical at $18,000.  Is that appropriate for you?

I don’t know.

It’s up to you to decide the value of the script and make an offer to the author or the author’s agent.

I’ve paid everything from $1 to $1000s when optioning material.  The answer to the question from the other coast is that the option amount differs depending on so many things, like:

  • What is the project?
  • Is it completed or just an idea?  A commission?
  • Who is the author?  What have they done?
  • What do you have planned for the project?  Broadway?  Off-Broadway?  Tour?  Foreign?
  • What is the potential commercial viability?
  • How many people are interested in it?
  • Was it your idea?
  • Etc.

I will say this when you’re thinking about what to pay.  Front money or seed money is hard to raise in the theater.  Unless you’re sitting on some giant corporate development fund, getting people to pay for early readings, workshops, etc. is hard, but that’s the money that is oh so necessary.

I often tell my authors and creatives that I try to keep my advances low so that I have more money to put into the shows themselves.  The hungrier authors are usually more than happy to forego a few bucks if it means a few more readings, or a few more rehearsals, or few more musicians.

We’re all making an investment in the early stages, and we’re all better served in having early money go into the show, instead of into a pocket.

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Ken created one of the first Broadway podcasts, recording over 250 episodes over 7 years. It features interviews with A-listers in the theater about how they “made it”, including 2 Pulitzer Prize Winners, 7 Academy Award Winners and 76 Tony Award winners. Notable guests include Pasek & Paul, Kenny Leon, Lynn Ahrens and more.