Hands down, the thing that is most likely to get your film sold is having a known actor or actress as your lead. Your brother—your film's major investor—may be a wonderful actor, but unless he has had a recurring role in a television series or at least a supporting role in a feature film, he will not help you sell your movie.
Sure there are exceptions to this rule: for instance, the three lead actors in the movie "The Blair Witch Project" did not have substantial television and film credits prior to being cast in that film.1 However, this is a rare occurrence in a film that makes money. Remember, the first audience you will have to sell your film to is the distribution company. For them to feel confident enough to put their resources behind the marketing and selling of your film, they need to believe there is a reasonable chance for a return on their investment. Putting the name and picture of a known actor or actress in a film's advertising and on its DVD case increases the likelihood that it will be sold.
If you want to work with a professional actor, you will need to work and comply with the rules of the Screen Actors Guild (SAG).
What Is SAG?
The Screen Actors Guide (SAG) is a labor union for professional film and television actors. Production companies who want to work with actors who are SAG members must become signatories of the SAG Codified Basic Agreement.This means that the production companies must sign a contract with SAG in which they agreed to abide by SAG's rules and regulations with respect to the SAG actors they employ.
Among other things, the Basic Agreement dictates the minimum requirements for
• An actor's payment and other forms of compensation.
• The hours they are required to work.
• Pension and health contributions.
• Consecutive employment.
• Working conditions.
Once a production company is a SAG signatory, the SAG Basic Agreement, like other union agreements, will overrule any contrary provisions in the contract between the production company and an actor.
Example: Electric Space Pickle Productions, LLC, has just become a SAG signatory and is producing a low-budget film for $500,000. Due to its budget, the film will be produced under SAG's Modified Low-Budget Agreement, which requires that actors be paid a minimum of $933 a week. Because the producers want to pour most of the funds into special effects, everybody has agreed to take a salary cut. The production company drafts Actor's Services Contracts giving the SAG actors only $100 per week, which the actors gladly sign. Unfortunately for the production company, the SAG Modified Low-Budget Agreement trumps the production company's contracts. Therefore, even though the actors agreed to $100 a week, they must still be paid the $933 a week specified in the SAG agreement.
SAG has made an effort to accommodate filmmakers of all budgetary levels. Whether you're making a $1,000 short film, a $2 million low-budget, or something in between, SAG has a contract for you.
In general, the lower your budget, the less you have to pay your SAG actor. However, there are restrictions on how your film may be exhibited depending upon the level of contract you've used to engage your actors. If a film is distributed in a manner which exceeds the SAG contract limitations, the filmmakers may have to pay additional fees.
The following table highlights a few major deal points of SAG's contracts for low-budget independent filmmakers. Filmmakers are advised to request both more detailed summaries as well as the contracts themselves from the Screen Actors Guild.
The SAG low budget contracts change from time to time. As this book is being written, the following are the current Low-Budget SAG contracts available to independent producers who are shooting their films entirely within the United States:
1. Student Film Contract. This contract is only for students who are currently enrolled in film school.
• Budget limitations: The film must be made for $35,000 or less.
• Running time: The film may not exceed 35 minutes in length.
• Production: The film may not exceed a maximum of 20 shooting days.
• Exhibition limitations: Student film Festival; in-classroom exhibition; one week in a paying movie house to qualify for Academy Award nomination.
• Actors' salaries: Salaries and other monies may be deferred pending any sale, distribution, or release of project.
2. Short Film Agreement
• Budget limitations: The film must be made for less than $50,000.
• Running time: The film may not exceed 35 minutes in length.
• Exhibition limitations: This film may only be shown in film festivals and not distributed commercially.
• Actors' salaries: SAG principles must be paid at least $100 a day, but the salaries are deferred.
3. Ultra-Low Budget Agreement
• Budget limitations: The film must be made for less than $200,000.
• Running time: The running time may exceed 35 minutes.
• Exhibition limitations: The film may be distributed theatrically without additional compensation to performers; however, if the film is distributed to television or video, the actors must be paid residuals.
• Residuals:The residual percentage is paid to SAG which allocates money to the SAG actors who appeared in the film.The current residual percentage which must be paid to SAG is 3.6% of the Distributor's Gross Receipts for television and cable and 4.5% of the first million for videocassettes and DVDs, and 5.4% thereafter.
• Actors' salaries: $100 a day (not deferred) plus pension and health contributions.
4. Modified Low-Budget Agreement
• Budget limitations: This film must be made for less than $625,000.
• Exhibition limitations: Within three years from the completion of principal photography, the film must have an initial theatrical release prior to any other releases (free television, cable, video, etc.). Any non-theatrical release occurring prior to the theatrical release will cause the performer's salaries to be upgraded to the much higher level of the Basic Agreement terms, including consecutive employment. However, if, after three years, the film has not been distributed theatrically, the film may then be distributed in other media without incurring step-up payments to Low-Budget or Television Agreement rates.
• Residuals: No residuals for theatrical exhibition; however, if the film is distributed to television or video, actors must be paid residuals as per the Ultra-Low Budget Agreement.
• Actor's salaries: $268 a day/$933 dollars a week plus pension and health contributions.
5. Low-Budget Agreement
• Budget limitations: This film must be made for less than $2,500,000
• Exhibition limitations: Within three years from the completion of principal photography, the film must have an initial theatrical release prior to any other releases (free television, cable, video, etc.). Any non-theatrical release occurring prior to the theatrical release will cause the performer's salaries to be upgraded to the much higher level of the Basic Agreement terms, including consecutive employment. However, if, after three years, the film has not been distributed theatrically, the film may then be distributed in other media without incurring step up payments to Low-Budget or Television Agreement rates.
• Residuals: No residuals for theatrical exhibition; however, if the film is distributed to television or video actors must be paid residuals as outlined above.
• Background actors: Within certain geographic zones, notably New York, Los Angeles, and other major American metropolitan cities, the production company is required to hire 30 SAG background actors prior to hiring any other non-SAG background actors. Rates for background actors start at $122 a day.
• Actor's salaries: $504 a day/$1752 a week plus pension and health contributions.
For more info on SAG low budget contracts, see: http://www.sagindie.org/contracts2.html
sag terms defined Consecutive Employment
The SAG MBA requires that producers pay actors for consecutive employment. This means that actors must be compensated for days in between those days when they were directly involved in the shoot.
Example: If an actor is supposed to work on Tuesday and Thursday, you must pay him or her for Wednesday as well. However, all of the Low-Budget SAG agreements have done away with this rule. As a result, if an actor is working under a low-budget agreement, and it is scheduled for Tuesday and Thursday, these are the only 2 days for which he gets paid—unless, of course, the producer has agreed to pay consecutive employment in the Performer's Services Agreement. Remember, SAG only sets the minimum requirements for an actor's services agreement, and does not prohibit actors or their representatives from negotiating better deals than those required by the union.
Residuals are additional payments required to be paid to union performers when the film is licensed in ancillary markets such as broadcast television, cable, and home video. When the production company becomes a SAG signatory, it agrees to make residual payments for the film's actors and to ensure that the film's distributors sign an assumption agreement. The assumption agreement is a contract with the distributor (or a clause in the distribution agreement itself) in which the distributor agrees to pay the residuals directly to SAG.
Example: Pariah Pictures has shot its film "The Adventures of Millard Fillmore" under the SAG Ultra-Low Budget Agreement. The film is shown on television and 3.6% of the Distributor's Gross Receipts are owed to the SAG actors. Because of Pariah Pictures assumption agreement with Dusty Distribution, Inc., Dusty pays 3.6% of its Gross Receipts to SAG, which disburses the monies directly to the actors.
To become a signatory with SAG, you will need to provide them with a good deal of legal documentation—much of which, if you've been following along with this book, you should have by now.
SAG requires that you submit the following forms at least 1 month prior to working with the SAG actors.
You will need to start the process by downloading, filling out, and submitting to SAG the Preliminary Theatrical Information Sheet, available on its website, at: http://www.sagindie.org/LowBudgetSAGIndiePreliminaryInformationSheet.pdf.
Once the information sheet has been reviewed, you will be assigned a SAG representative, who will be your contact with the Guild.
For SAG to approve your production company's eligibility to work with its members, you must also give the union the following:
1. A copy of the completed copyright registration form (Form PA). (See Copyright Registration, p. 268.)
2. A copy of the United States Copyright Office receipt, which shows that the office has received the completed Form PA.
3. All chain of title documents relating to the copyright in the screenplay and the picture. (See Chain of Title, p. 101.)
4. A copy of the script.
5. A copy of the shooting schedule.
7. Financial structure documents—the legal documents pertaining to the formation of your business. Examples include partnership agreements, articles of incorporation, articles of organization and operating agreements, business certificates, and fictitious name statements. (See Setting Up the Production Company, p. 25.)
8. Financial assurances: SAG may also require assurances that your production company has the money it needs to make the film. SAG may require:
a. A security deposit.
b. A first-position security interest in the film. A security interest is similar to a mortgage on a house: if you default in your mortgage payments, the bank can sell your house to repay your loan.With SAG's security interest, if you default on your payment obligations to the SAG actors, SAG can seize your film and sell it to pay your debts to your actors.
Remember—SAG Sets the Minimum Contract Requirements Only
• If the production company is a SAG signatory and is using SAG actors, the terms of the union's contracts will set the lower threshold of elements such as compensation, working conditions, etc. Actors and their agents, of course, will try to negotiate higher salaries than those required under these union contracts.
• Be careful here! It is easy for budgets to spiral out of control when it comes to an actor's compensation. On the one hand, a name actor is, without a doubt, the most important element in selling a motion picture to a distribution company, and therefore worth the time and expense it takes to negotiated a deal with which all parties feel comfortable.
• On the other hand, if you have several name actors of approximately the same industry recognition value, you simply cannot increase the salary of one without dealing with the demands of the others.This is why low-budget films featuring a cast of several name performers frequently pay only the SAG minimum, and not a penny more. Remember, despite your best efforts, you will not be able to keep salaries a secret. Do not pay one actor more than another similarly situated actor unless you want a disgruntled performer on your hands. (See Appendix C: Favored Nations, p. 293.)
• Remember—a production company that is a signatory with SAG is required to abide by all of SAG's rules. Anything in your contracts contrary to SAG's agreements will be superseded by SAG's agreements.
• SAG requires production companies to post a bond to secure the actors' payroll (which can be up to 40% of the budgeted payroll).
• Once the company is a signatory and is working with SAG actors, you may be limited in your ability to use nonunion actors. If you're shooting a film under the Student, Short, or Ultra-Low Budget Contracts, you may use both SAG and non-SAG actors. However, if you were shooting under the Modified Low-Budget and Low-Budget agreements, all your actors may need to be SAG members or become members shortly after being hired.
For more information on SAG contracts and policies for independent producers, see: www.sagindie.org.
TIP: Start your SAG signatory application processes early as possible.You need to be a signatory before you can sign a SAG actor to a deal.
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