Breaking Down the Differences Between Option and Shopping Agreements
Posted on: Jun 03, 2025
Photo Credit: Drazen // iStock PhotoA common question that many writers have after penning that killer screenplay or TV pilot is, “OK. Now what?” There are many roads you can take, including entering it into festivals, shooting a proof of concept, or submitting to various agents and managers. And if your written work does get interest from a producer or production company, they’re most likely going to ask you to enter into a shopping agreement or an option agreement.
The differences between the two can be narrow and confusing, so let’s break them down.
Key Insights:
- A shopping agreement gives a producer temporary, exclusive rights to pitch your project without buying it, while you retain full ownership.
- An option agreement involves the producer paying a fee for exclusive rights to eventually buy your project, making it a more formal and financially committed deal.
- Always define your role, protect your creative rights, and have an entertainment lawyer review any agreement before signing.
Shopping Agreements
First of all, congratulations. While a shopping agreement might sound like a deal a married couple makes before going to Costco, signing one is actually a huge step toward greenlighting your project.
In its simplest terms, a shopping agreement is a short-term contract between a writer/creator and a producer or production company, allowing the producer to “shop” the project (which could include a treatment, script or concept) to studios, networks or financiers, without actually buying the rights — yet.
For example, let’s say you write a TV pilot called Daytime Vampires (don’t steal my idea), and a production company called Walking Contradictions loves the script and concept. However, they’re not ready to buy it just yet. What happens next is you both sign a shopping agreement for a specific amount of time (usually 6–12 months). That gives Walking Contradictions the exclusive right — say, for 9 months — to pitch it to Hulu, Netflix, FX, CBS, etc. If someone buys it (which they will, because Daytime Vampires is an incredible idea), you both get paid — and ideally the series gets greenlit.
In a shopping agreement, you, the creator, retain full ownership of the project during the entire term. The agreement will outline a clear timeline and duration. The producer gets exclusive rights to pitch the project to buyers throughout that period. And if a deal is made, the producer is usually attached as a producer or executive producer moving forward. As a simple analogy, a shopping agreement is like letting someone borrow your mixtape to see if they want to give you a record deal.
Things to Watch For
Not all shopping agreements are standard, so here are a few things to keep in mind. You typically won’t get paid upfront for a shopping agreement — unless you’re Kevin Hart, because he has all the money. That said, you still fully own your project throughout the term. Be mindful of the length of the agreement, because if it doesn’t sell, you want to regain the ability to take it elsewhere. Using the 9 month example, if the production company takes it out to buyers and no one bites after 9 months, you’ll be free to take it out yourself and pursue other options. You should also double-check the exclusivity clause, because you usually can’t shop the project anywhere else during the agreement.
It’s very critical to make sure you clearly define your role — whether it’s as creator, showrunner, executive producer or something else — in the event that the project sells. And while there’s no guarantee of a sale, the fact that someone wants to shop your project is a huge step toward making it real — and possibly toward that Kevin Hart money. And to really make sure all your bases are covered, it’s highly recommended to have an entertainment lawyer look over your agreement. Entertainment lawyers typically work on an hourly, or percentage of the project basis. Since a shopping agreement tends to involve no money, you’ll most likely have to hire a lawyer on an hourly basis.
So, you have an amazing screenplay, pilot or concept, and you might be thinking, “Now what?” First of all, how about a good old-fashioned pat on the back? Great job. But now it’s time to take your hard work to the next level, and one possible route toward making your project a reality is an option agreement.
Option Agreements
An option agreement is similar to a shopping agreement, but with a few major differences. If a shopping agreement is like pitching the rights, then an option agreement is like renting the rights. In a formal option agreement, a producer or production company pays you a fee to reserve the exclusive right to purchase your project later. These agreements typically last 12 to 18 months, and during that time, you can’t sell the project to anyone else.
It’s like going up to your buddy who has an amazing sports car and saying, “Hey, I like your car. I’m not ready to buy it yet, but I’ll pay you a fee so I can be the only one allowed to drive it for the next 12 to 18 months. And during that time, I’m gonna take it to car shows, dealerships and rich uncles to see if anyone wants to buy it — and if they do, I’ll come back and buy it from you for the price we agreed on.”
Bringing it back to your written work — in an option agreement, you still own the rights, but the producer has exclusive control during the option period. They’ll be actively shopping the project to studios, networks, streamers, financiers and talent, doing whatever they can to get it greenlit.
An option agreement is more formal and binding than a shopping agreement. Since the producer has paid for the rights, they have skin in the game. If the project moves forward, they exercise the option and buy the rights under the terms you’ve already agreed upon. The producer will also be attached to your project and maintain rights throughout the option term.
If you want a metaphor: a shopping agreement is like dating, and an option agreement is like putting down a deposit on a wedding venue. Or better yet — shopping is casual, but an option is a paid engagement ring.
Example of an Option Agreement
Going back to my analogy from Part 1 of this series, let’s say you wrote a TV pilot called Daytime Vampires, and the production company Walking Contradictions wants to option it. Typically for a TV series, they’re optioning the pilot script, the IP (intellectual property) of the show, and the series bible. You agree to an option deal that pays you $5,000 so they have exclusive rights to take it out for 12 months.
If Walking Contradictions gets interest from, let’s say, Hulu, they will then pay you $100,000 for the rights, and you’ll receive creator credit. Depending on the agreement, you’ll then receive additional ongoing payments, which may include episode fees, executive producer fees, backend participation and WGA (Writers Guild of America) royalties or residuals. Important note: your future involvement in the series must be spelled out in the clauses of your original option agreement.
Thing to Watch For
There are some key things to look out for in your option agreement to make sure it’s rock solid. Again, it’s highly advised to have an entertainment lawyer review the agreement beforehand. Make sure the option period isn’t too long — 12 to 18 months is standard. Watch out for a very low or nonexistent option fee (even $1,000 to $5,000 is normal). If the fee is zero, it starts to look a lot more like a shopping agreement.
Ensure there is a clearly defined purchase price if the production company wants to buy the material from you. It’s also critical that you get written confirmation of what credit you’ll receive if the show or film is made. Examples include: “Created by,” “Written by” or “Executive Producer.” If the producer doesn’t exercise the option in time, you should automatically regain all rights — no strings, no delays.
Absolutely make sure your agreement includes backend participation, meaning a piece of the profits if the show becomes a hit. Lastly, be careful of sneaky language that says they already own the rights just by signing. It should be clearly stated that rights only transfer if they exercise the option and pay you.
Brendan Fitzgibbons is a comedy writer and actor living in Los Angeles. He’s written for Comedy Central, The Onion, NBC, HuffPost and Bravo. As an actor, he’s appeared on Comedy Central, MTV and “Full Frontal with Samantha Bee.” His podcast, “Spiritual As****e” was named a Top Indie Podcast by Stitcher.
Browse thousands of jobs and find your next gig! Sign up or login to Staff Me Up and get on-set today!
You may also like: