The author also has the right to refuse the option. Diana Gabaldon refused one outlet because they wanted to change the nationality of a key character.
It’s important to distinguish between option rights and outright selling the movie rights.
Compare to an option offer on a piece of land. You pay the land owner $X to not sell the land for some period of time with $Y due if the buyer decides to go ahead and buy it. (Sometimes with rights to match other offers instead and other variations.) If the buyer decides not to (the new freeway was put somewhere else), then their out the money and the owner gets money for nothing.
If someone buys the movie rights, they own the movie rights period.
Authors have to be careful about their choices. Selling the rights will get more money if the movie isn’t made. But probably not as much as if it is. Do you think they’re really going to make the movie? Very few are. If you’re famous, have had other things made into movies, then options might be better. If you’re a nobody with a little known work, outright selling could be best.
One dirty trick in Hollywood (which Disney often uses) is to option a work with no intention of making it just so no one else will. (Not telling the author this, of course.) When the option runs out, the work’s fame has faded and it’s less likely someone would want to make the movie. This is especially common if the studio wants to make their own movie that is somewhat similar.
I’ll point out that it’s not always studios that option books. It also can be individuals, or a group collaborating on the project. That’s a step backward from the goal line, because those people then have to convince a studio to do the movie. But hey, when somebody offers you thousands of dollars just for the right to talk to other people in Hollywood about your book for a year, that’s easy money. And then when they haven’t been successful and want to renew the option, more easy money.
I’ve had books go through seven or eight option renewals. One was with someone I had a lot of faith in (very experienced and very well connected) but after a few years she still wasn’t getting anywhere with it and so I declined the next option request. I was getting constant inquiries about optioning the book, so I wanted to give someone else a chance. She hasn’t spoken to me since. And the movie hasn’t been made yet.
It’s nearly always better to option the work, since the contract calls for additional payment if the work goes into production. There can also be additional payments depending on how far the production goes.
If you sell the rights outright, there’s no incentive to begin production. But you cannot ever go elsewhere.
There have also been some instances of an author selling the production rights but still making a few dollars off the merchandising.