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SAG-AFTRA Board Approves New Three-Year Deal with Producers

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The SAG-AFTRA national board of directors met by videoconference yesterday and approved the tentative three-year agreement reached earlier this month with the AMPTP. With the board’s approval, the deal covering film, TV and new media production now goes to the performers guild membership for ratification.

Though not quite a slam dunk, the 67.61% to 32.39% SAG-AFTRA board vote constitutes a “super majority,” avoiding the requisite inclusion of a minority report in the recommendation to ratify – though one will still be included, the guild said.

Increased SAG-AFTRA scale wages and residuals

The tentative deal includes a 2.5% wage increase in the first year, and 3% increase in the second and third years of the agreement, according to SAG-AFTRA. Those increases will be subject to retroactive payments back to July 1 if the membership ratifies the agreement, and are in keeping with entertainment payroll increases secured by other above the line guilds.

Additional wins for guild members touted by SAG-AFTRA include a 26% increase in residuals for fixed streaming residuals over the first three years of availability for high-budget programs on subscription platforms, along with a sizable increase in health plan funding over the course of the agreement with the AMPTP, increased performer protections for nudity and simulated sex scenes, and a move from fixed to revenue-based residuals on syndication deals.

The guild also negotiated for improved formulas for foreign streaming residuals in year two of the agreement, as well as a more lucrative overtime calculation for weekly Schedule H-II stunt performers on episodic TV series, one additional covered background position for West Coast episodic production, and increases to money and schedule breaks.

“We achieved unprecedented increases in residuals in the fastest-growing category, we secured ground-breaking protections for members in the areas of nudity, simulated sex and sexual harassment, and we strengthened our benefit plans,” said SAG-AFTRA National Executive Director and Chief Negotiator David White.

Historic protections for SAG-AFTRA performers in scenes of nudity and simulated sex

According to SAG-AFTRA, the new protections for its guild performers (both principal and background for most) include clarity on the authorized use of digital doubles and digitization, stricter safeguards at auditions and interviews; a 48-hour review period for riders; better “closed set” definitions, prohibitions on digital device recordings and access to a “cover up, such as a bathrobe.”

Residuals formula update on syndicated TV product

For the new residuals formula on syndicated programs, SAG-AFTRA clarified that any product on an existing license will continue to pay residuals under the current fixed residual formula through both the duration of the license and any extensions, while for new licenses, the fixed residual will be replaced with a revenue-based residuals model.

The guild said the tentative deal also eliminates the advance payment of residuals for future syndication for performer contracts entered into on or after July 1, 2020… a significant financial protection for performers.

SAG-AFTRA ratification vote next

The ratification vote will be conducted online per an earlier board resolution, though paper ballots are available to eligible SAG-AFTRA voting members on request. The deadline for voting is July 22 at 5pm PT.

If ratified by the guild membership, the new SAG-AFTRA contract will be effective retroactively from July 1, 2020, through June 30, 2023.

Need SAG-AFTRA scale rates? Visit our FREE Showbiz Labor Guide.

5 Things You Need To Know about Residuals

Residuals Faucet

One of the biggest question marks when trying to ensure profitability on a film or TV project is the residuals payment obligation. The talent guild agreements are filled with nuanced rules that can end up costing an unsuspecting producer or distributor much more than anticipated.

Here are five tips to keep in mind, both when estimating the total cost of your film and when negotiating licensing deals to make sure they’re profitable.

  1. Leaving someone off the cast list results in more than hurt feelings.Improper verification of the residuals cast list (i.e., getting it wrong) can generate claims and additional costs. Here are some common errors in creating the residuals cast list:
    • Omission of SAG- AFTRA Talent
    • Upgraded Extras
    • Talent in re-shoots
    • Stunts and stunt coordinators in second unit
    • Choirs hired in post-production
    • Talent called to loop or re-voice
    • Talent in clips or excerpts from other films or recording used in film
    • Celebrity look-alikes, sports stars, political cameos hired outside normal casting
    • Nude body doubles hired as principals
    • Failure to properly calculate SAG or IATSE residuals proration
    • Failure to recognize special agreements or waivers negotiated at the time of production
  2. The first million is the sweetest. Under all collective bargaining agreements, residuals on the first $1 million reportable receipts from Home Video are payable at lower percentages.  In cases of shared distribution territories, agreements should detail which entity gets the benefit of these lower residual rates. In cases where the agreements do not make this clear, it is to the distributor’s benefit to make the first Home Video reporting.
  3. Watch out for the ol’ PH&W prepay. Advances to star talent are often made prior to production and outside of a payroll service. Consequently, these amounts are sometimes overlooked in preparing the residual cast list and are not credited toward that talent’s Pension Health & Welfare contribution ceilings. This results in overpayment of PH&W on residuals.
  4. Separate payroll services = doubled PH&W contributions. In cases of shared distribution where the responsible parties are using separate payroll services, residual payments made by one party are not likely to be credited by the other against talent PH&W ceilings. This also results in another PH&W overpayment on residuals.
  5. Be an approval-seeker when it comes to setups. When two parties are using separate payroll services, it’s important to coordinate the approval of the residual setup. Making residual payments based on different allocation or proration would be a red flag for an audit.

One of the best things you can do to protect yourself and make your film attractive to distributors is to get your final residuals cast list together while you’re still in production. A residuals payment service can help you assemble the list, and should even be able to forecast the cost of residuals for various release-to markets.

Learn more about Media Services Residual Payments, or request more residuals information here.

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