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Talent Work-For-Hire Agreement

Talent

You have to become a SAG signatory even if only one of your actors is a SAG member. Remember that SAG has to clear the picture in order for SAG talent to render services, and it will not do that until the production company is a SAG signatory and has met all of SAG’s financial demands. When I serve as production counsel, I submit the SAG signatory package at the onset of pre-production, in order to avoid delays to principal photography. Below I discuss some of the more negotiated clauses included in the Talent Agreement for the lead characters in your picture. Actors in smaller roles, who do not receive the same level of compensation and perks as the leads, are provided less complicated agreements.

Engagement                                     

The Talent’s Work-For-Hire Agreement (“Talent Agreement”) is usually between the production company and the actor’s loan out company (most established actors have loan out companies). The Talent Agreement will include the name of the character the actor is playing, compensation, the time frame when the actor’s services are required, the actor’s credit, trailer, etc.

Guaranteed Period of Services

The Talent Agreement states the actor’s “guaranteed period of services,” which is the period of time during which the actor will render services. The guaranteed period of services will include the actor’s services during principal photography as well as rehearsals, wardrobe, makeup test, looping, dubbing, wild lines, and pickup days (“additional services”), which may be “free.” Whether the additional services are provided for “free” will depend on the SAG category under which the actor was hired and the actor’s overall compensation. Please consult the SAG-AFTRA Theatrical and Television Contract Summary for more information on “free” days.29

An actor may ask for a “stop date,” which means that the actor wants a guarantee that his services will not be required past the stop date. It is important to define “stop date” in the Talent Agreement because you do not want to leave yourself without recourse if you require the actor’s services at a later date. You can define the stop date to mean the day the actor’s services will stop during principal photography, or the day that the actor’s services on the picture will stop. I suggest avoiding stop dates altogether, but this is not always feasible if an actor is scheduled back-to-back on another production. If you have no choice, limit the stop date to principal photography only and shoot the actor’s scenes first, in case there are delays. Under no circumstances agree to a stop date in regard to the actor’s obligations for the entire picture, since you will have no recourse if you need the actor’s services for pickup days, retakes, looping, dubbing, wild lines, publicity, etc. Any actor, who requires a stop date for the entire picture, is an actor you should not hire. Things always go wrong and you need people on your team who are willing to cooperate.

Carryover

The Talent Agreement should include a “carryover” clause, which will allow you to require the actor to render services in excess of the original contemplated time. The carryover clause is key in case you experience production delays. You will have to pay the actor additional compensation as long as the actor is not the reason for the delays due to illness or breach of contract.

Fixed Compensation

The talent’s fixed compensation is paid in weekly installments. How much you offer and pay an actor is influenced by whether the actor is a member of SAG, the actor’s quote, stature and track record in the industry, the production budget, and screen time. You will not offer Jack Nicholson the same fee for 15 minutes of screen time as you will for 90 minutes. Each of the SAG Agreements (Ultra Low Budget, Modified Low Budget, Low Budget, and Theatrical) has a different level of compensation. You cannot pay SAG actors less than SAG minimum scale plus the P&H Contribution, but may pay them much more. Note that “A” level talent is going to require that you “pay-or-play” them, since the time they set aside to star in your picture is time they are not spending earning money elsewhere. I attempt to make pay-or-play offers contingent on the production company securing the Completion Bond because the insurer cannot bond the picture if the money has not been raised.

Contingent Compensation

The actors may also be paid contingent compensation/profit participation; whether it is based on a gross or net profit definition depends on the actor’s stature in the industry. “A” level talent such as Julia Roberts, Tom Hanks, Tom Cruise, Jennifer Lawrence, Jennifer Anniston, Adam Sandler, and Meryl Streep are all paid on a gross calculation of profits. “B” level talent may expect a portion of the picture’s net profits. Talent without a track record or in smaller roles should not be allocated profit participation of any sort unless you are paying them less than their normal quote. Be very judicious when it comes to allocating gross profits, since every dollar paid to an actor up front is a dollar your investors are not recouping. These gross profits are on a “20 against 20” or “Cash Break” basis. The former means a $20 million advance against 20% of the gross profits from first dollar at the box office. The latter means that the actor gets a percentage of gross after the studio recoups certain expenses, which are defined up front to keep the calculation resulting in net profits.

Bonuses

I negotiate a Box Office Bonus on behalf of actors working on lower budgeted pictures and/or being allocated a net profits versus of gross profits definition on their profit participation. The Box Office Bonus is based on box office figures as reported in the Trades, such as “Daily Variety” and “Weekly Variety.” Keep in mind that the Box Office Bonus is paid prior to investor recoupment. I advise my clients to tell investors that bonuses like deferrals are part of the compensation package—this is especially the case on lower budgeted productions. I have negotiated agreements whereby an actor, who was allocated net profits, was offered a $100,000 Box Office Bonus when the picture had grossed three times its production budget.

Merchandising

The Talent Agreement should include a merchandising clause, since you need the actor’s approval in order to sell merchandise that depicts the actor. The actor may require approval of the merchandise. Furthermore, the actor may require additional compensation, depending on his stature in the industry. Actors typically receive on average 5% (some more, some less) of the net revenues received by the production company for merchandise that depicts them.

Credit

You will have to credit all talent on screen, but will only credit the leads in paid ads. “A” level talent may require an above-the-title credit and credit in all but congratulatory and nomination ads. Where and how the credit is placed may indicate the actor’s level of success in the film industry and how important the actor’s performance to the picture. As such, credits are exceptionally important to talent and are highly negotiated. I find myself being creative when actors of the same caliber want the first position credit. Sometimes one gets it on screen and the other in paid ads. Sometimes the top two leads share a card, but the first name on screen is lower on screen than the second.

Dressing Room/Trailer

You will have to provide the actors with a dressing room and/or trailer. How nice the accommodations are will depend on the actor’s stature in the industry: the bigger the star, the bigger the trailer. The actor may have additional requirements, such as special food, personal trainer, assistant, their own makeup artist, driver, car, etc. Actors need to be in the right state of mind in order to give you their best. Give them what they want, budget allowing.

You will have to provide talent with travel, accommodations, and a per diem if they are required to render services more than 50 miles from home. SAG has various rules regarding travel, so please refer to the SAG Basic Agreement for that information. Notwithstanding, “A” level talent will require first class airfare and accommodations for themselves, their spouses, and children. Some may opt for a house, condo or apartment over a hotel. Like I said above, give them what they want.

Note that some actors may require “favored nations” treatment in regard to their compensation, dressing room, credit size, etc. “Favored nations” means equal treatment. You cannot offer another actor something better without upgrading the actor with the “favored nations” clause.

Nudity

SAG has certain requirements if you are going to audition actors in the nude or if the role requires nudity or sexual acts.30 You must notify the actor’s representatives that the role requires nudity or sex acts prior to the first interview or audition, and total nudity may not be required for either. The actor will have the right to be accompanied to said interview or audition. The set has to be closed during principal photography to non-production personnel, and still photographs may not be taken without the actor’s prior written consent. You must secure written consent prior to the actor entering into an agreement to star in any role that requires nudity. You may hire a body double to render services if the actor withdraws the previously granted consent.

Insurance

The production may want to purchase a life insurance policy on the lives of the lead actors. The actors may have to submit to medical exams and may be terminated by the production company if the insurer will not bond them. The actor will be added as an insured to the production company’s general liability and E&O insurance policies.