My question has to do with when is a story "based on a true story" and when is it not. I imagine it's a fuzzy line that varies case-by-case.
Here's my case. Some years ago, I wrote a magazine article about a family that survived a life-and-death experience. A producer I respect is encouraging me to write the story as a script (no, he's not offering money for that). He wants me to get permission from each of the three people involved so they're on board. The trouble is the mom divorced the father and neither she or the daughter want to have anything to do with him. They say that if he's involved, they won't grant me permission. So, I'm left with these options: (1) write the script but replace the father's character with a fictional one, nothing like the real guy, or (2) forget the whole thing. I think it would make for a hell of a story even with a fictional husband, but I'm wondering if doing so means the movie wouldn't qualify as "based on a true story". Am I right in thinking an action story is an easier marketing sell if it can claim to be "true"?
First off, I'm not a lawyer, so I can't speak to specifically when the "based on a true story" disclaimer becomes invalid. I would think that if you have the permission and participation of one of the principals, that makes it valid. Not knowing the particulars of this specific story, I can't really offer an opinion on how much it would harm the accuracy to change the characterization of the father.
If you've got a producer who's interested, this should really be a question for him. He already knows the story and he'd be better positioned to tell you how much it hurts his marketing angle.
Not knowing the story itself, I can't say how much of a difference the "based on a true story" tag would make for the marketing. My gut reaction is that it becomes more valuable to you the more fantastic the story gets. A good recent example is Argo. The notion that the CIA would use a fake Hollywood movie as cover for a hostage rescue operation seems so unlikely and so absurd that you can't help but have your interest piqued once you know this really happened.
(Of course, many of the complications in Argo's third act are entirely invented and the script takes some other liberties along the way, but the core of the story really happened.)
In the case of Argo, the fact it really happened undoubtedly intrigued the producers who eventually made it, and I'd be shocked if they didn't use that fact to sell the studio on an idea that might have otherwise seemed to absurd to be plausible.
On the other hand, if you're dealing with something slightly more run of the mill like a family fighting back after a home invasion, perhaps the "true story" tag is less essential. This is one of those case-by-case basis things - but as I said, your producer is probably the guy to give you a real answer on this.