Today I am continuing my ongoing look at SAG-AFTRA agreements with a detailed comparison and explanation of their low budget film agreements for filmmakers.
Two weeks ago I went over SAG-AFTRA’s Signatory agreements for Short Films and last week I went over the Ultra Low Budget and Modified Low Budget agreements.
I know, it’s a lot of splitting hairs, but there are important differences between these that we need to understand.
So how do you know which route you should go with your project?
Especially when you need to designate your signatory contract before production begins?!
Well today’s post will bring this topic home once and for all and be a good go to resource for you the independent filmmaker.
- First, I will cover the last signatory agreement that I believe is relevant to indie filmmakers, the Low Budget Agreement.
- Second, I will then compare the Short Film, Ultra Low Budget, Modified Low Budget, and Low Budget agreements, and lastly
- I will provide some practical tips that I have seen successful clients use.
I have two options for you to get this great content! Either watch this video or below it you can read the full more detailed blog post.
Low Budget SAG Agreement
The Low Budget Agreement cover films that are low budget feature films for initial theatrical release (four walling counts; film festivals don’t count). To qualify your total budget must be less than $2,500,000 and the film has to be shot entirely in the United States. Taft-Hartley is allowed under this type of agreement, if you are hiring a principal performer or background actor who is not yet a SAG-AFTRA member.
You should contact your SAG-AFTRA office at least one month before your start date. Start by completing a Preliminary Information Sheet. You can download this from the SAG-AFTRA website. You will need copy of your script, shooting schedule and budget. The SAG-AFTRA Business Representative will review your documents and explain your next steps to becoming a SAG-AFTRA Signatory Producer. After the SAG-AFTRA representative has reviewed your preliminary information sheet, a packet of documents will be sent out to you.
What to expect in your packet
- Company Authorization Letter Form
- Theatrical Information Sheet
- Theatrical Distribution checklist
- Screen Actors Guild Agreement for Independent Producers of Theatrical Motion Pictures (return two signed originals)
- Low Budget Agreement
- SAG-Producers Pension and Health Adherence Letters (return two signed originals)
- Television/ theatrical Production Checklist
If you are a corporation, limited liability company (LLC), or a partnership or joint venture you will need to provide the following for your respective entity:
- Corporation- you will need to provide your Articles of Incorporation and completed Corporation Resolution.
- Limited Liability Company- you will need to provide your Articles of Incorporation, LLC Operating Agreement, and completed LLC Resolution.
- Partnership or Joint Venture- you will need to provide your Fictitious Business Name Statement and Partnership Agreement (if applicable).
Similar to the Modified Low Budget agreement, SAG-AFRA has developed the following diversity incentive. If a film meets these criteria, the maximum budget allowance is increased from $2,500,000 to $3,750,000:
- A minimum of 50% of total speaking roles and 50% of the total days of employment are cast with Performers who are members of the following protected groups:
- Senior Performers (60 years or older – known as a “silver fox”)
- Performers with Disabilities
- People of Color (African-American, Asian-Pacific Islander, and South Asian, Latino/Hispanic, Arab, Middle Eastern, and Native American Indian). People of Color Performers must be employed a minimum of 20% of the total days of employment.
With respect to background actors, hiring a minimum number of SAG-AFTRA background actors may be a requirement depending on the filming location. For example, in the New York and Western Zones, the Producer must hire 30 general background actors covered under the SAG-AFTRA agreement for each day before hiring anyone who is not covered. See SAG-AFTRA for background actor rates as they upgrade in yearly periods.
What Are Some of the Benefits in Becoming a SAG Signatory?
- No consecutive employment (except overnight location)
- Lower rates
- Cover fewer number of background actors
- Reduced overtime rates
- Six day work week with no premium
With regards to rates paid to performers, the minimums are lower than the minimums in the Standard Theatrical Agreement (the minimums are higher than in the Modified Low Budget agreement); however, this does not limit performers right to negotiate higher rates or terms of employment.
Exhibition Under the Low Budget Agreement
The film must have an initial theatrical release. Featuring the film at a film festival will not count under this agreement. If after three (3) years from the end of principal photography, there has not been a theatrical release, the Producer may distribute the film to supplemental markets without incurring step-up payments to the Standard Theatrical Agreement rate.
Residuals Under the Low Budget Agreement
Under a Low Budget Agreement, the Producer must obtain an executed Distributor’s Assumption Agreement as soon as a distribution deal is in place. For distribution beyond the theatrical market, residuals must be paid to principal performers.
Residuals are basically money paid to principal performers when a film is distributed (usually on a quarterly basis). Generally, residuals are based on percentage of the Distributor’s Gross Receipts (DGR). The total percentage is broken down amongst each performer based on the time they worked on the film and their salary. Here is an example of DGR percentages, note the Pension and Health contributions are included in the percentage.
Media Percentage of DGR
Free Television, Basic Cable, Pay Cable 3.6%
Videocassettes/Discs 4.5% of 1st million, 5.4% thereafter
Free/Ad Supported Streaming 3.6%
Paid Subscription/Internet Rental 3.6%
Download-to-Own/Electronic Sell Thru 5.4% of 20% of 1st 50,000 units, 9.75% of 20% thereafter
The following compares the key components of the four signatory agreements that most indie filmmakers will contemplate using:
|Short Film||Ultra Low Budget||ModifiedLow Budget||Low Budget|
|Requirements||<$50,000 budget< 35 min run time- Shot in U.S.||<$250,000 budget- Shot in U.S.||>$700,000 budget- Initial theatrical release|
Taft-Hartley allowed- Shot in U.S.
|Key Benefits||– No consecutive employment (except overnight location) – Deferred salaries- No Premiums (only professional performers)||– No consecutive employment (except overnight location) – Reduced Overtime- 6 day work week with no premiums – significantly lower rate (only professional performers)||– No consecutive employment (except overnight location) – Reduced Overtime- 6 day work week with no premiums||– No consecutive employment- Reduced Overtime- 6 day work week with no premiums|
|Incentives||N/A||N/A||YES – Diversity In Casting and Background Actor Incentives||YES – Diversity In Casting and Background Actor Incentives (with restrictions)|
|Rates||Deferred||($125/day – actor)||($335/day – actor)||($620/day – actor)|
|Exhibition||Film Festivals and some limited markets||Theatrical Release||Initial Theatrical Release required||Initial Theatrical Release required|
|Post Security Deposit?||Determined by formula based on performer salaries plus pension. Must post security deposit before start of production. It is returned after all materials are turned in.||Determined by formula based on performer salaries plus pension. Must post security deposit before start of production. It is returned after all materials are turned in.||Determined by formula based on performer salaries plus pension. Must post security deposit before start of production. It is returned after all materials are turned in.|
SOURCE: SAG-AFTRA THEATRICAL CONTRACTS DIGEST
Here are a few final considerations when thinking about the SAG-AFTRA signatory process:
- There are no Low Budget agreements for films that are shot outside the U.S. (not even B-roll)
- Budget is defined as the costs beginning at the pre-production stage and continuing through the Answer Print. It does not include marketing, advertising or security deposit.
- It is a rule of thumb to always include a 10% reserve contingency in your budget.
- Remember that Players are not independent contractors! (they receive IRS Form W-2 not IRS Form W-9).
- Your production needs to have workers compensation insurance
- SAG-AFTRA does not do retroactive signatory agreements so plan ahead
- SAG-Indie is an organization that helps Indie Filmmakers put paperwork together. It is not actually part of the guild!
- You need to know if your talent is considered “professional” (their intended profession is acting and likely must be paid SAG-AFTRA rates and P &H regardless of being in the union) or “non-professional” (you can negotiate whatever terms you agree to).
- Make sure you coordinate with the right organizations if you use Animals (American Humane Society) and Stunt persons (you need to have a stunt coordinator present).
- And I saved the best for last…Nudity Riders. This is a potential area for liability. You MUST explain the scene and stick to that specific scene or you risk having an issue.
I hope you found this information useful. Again, if you are using SAG-AFTRA actors you really want to be careful that you are following the proper procedures so you don’t jeopardize all your hard work!
For more information visit the SAG/AFTRA website.