Scary Article about SAG Ultra-Low Budget Agreement

You're right Johnathan, the promo to production split is 60/30, that means 30% toward the film and 60% toward the promotion. 40k is your film and $100k is your promotional budget. Push that bad boy yourself and no one can do nothing to you.

If you have to do SAG only hire one huge actor willing to do it and call it a day after that. See if you can wrangle Vivica Fox or even better look for actors who have had some bouts with rehab and want to get on the come back trail. They'll work with you. Check in with Daniel Baldwin from time to time too if you can get his info. Somebody in the User Films section just got "The Hoff" in his film. Get The Hoff and your film is gold in Germany.

Or skip the actors and find known singers or rappers who haven't been in films and aren't part of SAG. There's all kinds of things you can do with a $140k budget. Personally, if it's my own money, I would risk self distribution if I shoot for $40k and can't get a deal then that other $100k won't help.

What will sale a film is the look and the story and if it's true to it's genre. Once you get the name in there, the other stuff can be done for cheap. And get the name actor in and out, I'm thinking three days max depending on what it's costing. It's been said TV actors are good because they know how to get a scene shot fast.

We did "Wages of Sin" for roughly $5000, people assume we shot for at least $10 - $20k, but not so. Almost all the locations were free minus about three which we paid about $100 for each. If I had shot for 20k you would've gotten much more, probably a car chase, at least one or two known B-list actors and I would've had more choices of actor, (though I'm happy with my leads) and locations. There's a penthouse I can rent and many other things and now we have a greenscreen too so it's not so much the budget but what you do with it.

-Nate
 
It was my understanding that SAG owns part of your film and as a result you can't sell all title even if you wanted to. So the situation where you do a buy-out deal doesn't result in SAG not getting their full cut, it results in the distributor not owning all the rights to the film. And any money they make exploiting the film would have to split with SAG, per-standard rules on copyright.

I suppose if you told the distributor you had full rights to the film and you didn't, you could be sued by them and be forced to cover SAG's cut. But that would be a foolish deal on your part. In effect a SAG film cannot be sold with a buy-out agreement without a "Distributor's Assumption Agreement". Since even if it was, SAG would still own part of the film and be entitled to the cut. I'm not 100% sure but I'd imagine SAG's ownership would be the exact same percent the contract calls for you to pay them.

The whole system is basically rigged in favor of the big studios. SAG is just a tool(one of many) they use to stop new studios and publishers and to funnel any real business through their very narrow tunnel. Don't you think it's odd that no theater will show a film without an MPAA rating? It's not because of a law. No newspaper will accept advertising for an unrated film either. It's all a system of control. SAG is part of that system, the truth is actors as a whole would work more and make far more money if they weren't tied to the SAG contracts, but that could mean they would make less money on the big studio pictures, the studio broadcast shows. So it never happens.

Instead of reasonable contracts with clear terms they have a phone book with too many rules for anyone to understand. The entire SAG MBA is really designed so that only a handful of companies can actually hire and use actors and then only on shows with giant budgets. The low budget agreements are pretty much untenable for any actual low budget film that wants to try and make money. Yes people do make films using SAG's low budget agreements, but mostly they don't make money doing it. There is no long tail, it's really a sharp cliff. Your either on the top or the bottom. As a system of control it works pretty well. They keep making awful big budget films (mostly sequels) and anyone trying to make their own films are shut out by the economic reality.
 
msorrels said:
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The whole system is basically rigged in favor of the big studios. SAG is just a tool(one of many) they use to stop new studios and publishers and to funnel any real business through their very narrow tunnel. Don't you think it's odd that no theater will show a film without an MPAA rating? It's not because of a law. No newspaper will accept advertising for an unrated film either. It's all a system of control. SAG is part of that system, the truth is actors as a whole would work more and make far more money if they weren't tied to the SAG contracts, but that could mean they would make less money on the big studio pictures, the studio broadcast shows. So it never happens.

Instead of reasonable contracts with clear terms they have a phone book with too many rules for anyone to understand. The entire SAG MBA is really designed so that only a handful of companies can actually hire and use actors and then only on shows with giant budgets. The low budget agreements are pretty much untenable for any actual low budget film that wants to try and make money. Yes people do make films using SAG's low budget agreements, but mostly they don't make money doing it. There is no long tail, it's really a sharp cliff. Your either on the top or the bottom. As a system of control it works pretty well. They keep making awful big budget films (mostly sequels) and anyone trying to make their own films are shut out by the economic reality.
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The SAG rules exist so that people who have chosen acting as an income producing profession get paid in something they can use to pay their rent and enough of it to do so instead of being paid in just pizza and a screen credit. Working for the glory of the art doesn't put food in your kid's tummy. All the SAG rates establish is minimums and an actor is completely free to negotiate a higher rates at any time with SAGs blessing so it is completely incorrect to say that SAG is keeping actors' pay down.
 
msorrels said:
No newspaper will accept advertising for an unrated film either. It's all a system of control. SAG is part of that system, the truth is actors as a whole would work more and make far more money if they weren't tied to the SAG contracts, but that could mean they would make less money on the big studio pictures, the studio broadcast shows. So it never happens.
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It is all a part of a system of controls. I found this out the hard way when I was promoting my films.

Steve House said:
The SAG rules exist so that people who have chosen acting as an income producing profession get paid in something they can use to pay their rent and enough of it to do so instead of being paid in just pizza and a screen credit. Working for the glory of the art doesn't put food in your kid's tummy. All the SAG rates establish is minimums and an actor is completely free to negotiate a higher rates at any time with SAGs blessing so it is completely incorrect to say that SAG is keeping actors' pay down.
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So if that same SAG actor needs to put food on the table and there's a paying non-SAG role, the SAG actor can't take that role unless the producer is willing to go through the red tape and risk to work with SAG. The reality is, many times it's not worth it if you're not a big studio. SAG agreements should be no more than five pages long (and that's streching it). Most contracts I write don't extend beyond three pages, because I'm not trying to scam anyone. I tell them straight forward what I'm going to do and then what I expect of them. No BS, no terms you don't understand, keep it simple.

In fact SAG ULB agreements should function like SAG Core actors are allow too. The actor decides what they're willing to take. If you can pay $10,000 and the actors says I'll take it then what should you have to go through red tape. If you have $5000 and the actor says, "Nope can't do it." then it's still the actor's choice. The real fear is some big shot like Tom Cruise, starring in his pal's ultra low budget film for $5000 and it becoming a big hit. Then anyone with the money could get big actors in films simply based on what they (the actor) wants to do. Sure some agents may not like it but the real A-listers won't get dropped for these decisions and they all know it.

If it was really about the actor it would be open to everyone. People who've been well served by SAG a mainly bigger names. Sure they do good for smaller actors who get around but honestly, if it was so great for everyone why is there even a need for SAG Core? Because actors sued to have the right to work even when there was no SAG films that wanted to hire them. And then SAG takes money from Fi-Core actors and then discriminates against them. How is that fair? They're paying to be able to still work on SAG films, but they're somewhat blackballed at this point. These are the facts about FiCore: http://www.sag.org/getthefacts/ficore2.html and it sucks because you're paying money to them for nothing really. And yes, when using SAG actors SAG does have power over your project.

-Nate
 
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What is completely shocking to me is the part in the article where SAG can suddenly demand a cash residual deposit a few days before principal photography. I thought to myself no way! But I recall reading that Adam with Corrado film was shaken down just in this very way a few days before principal photography. WTF?
 
SAG came about for a reason. And the pendulum swings both ways. If SAG is a hindrance to actors getting work, they'll go fi-core. It's a self-resolving situation. If producers won't hire SAG actors because the SAG burdens are too onerous, then SAG actors won't get work, and if that becomes a pervasive situation then it's obvious that SAG's burdens are too onerous, and they'll either lighten them or implode.

In the meantime -- anyone considering using SAG should find out what their entire obligations are, and decide for themselves if they can live up to the requirements that the Minimum Basic Agreement (the "telephone-book-sized" full contract) places upon them.
 
I would expect that to be the case as well; I can't see how a signatory distributor to the MBA could possibly be allowed to distribute another's film and avoid the DAG.

The question really applies to those folks who can't raise much money, who pour their heart and soul into their little microbudget film, and who get an offer from one of the minor distributors. That's where the potential for getting in way over your head can come in.
 
Exactly what Barry said. Not to mention most Microbudget filmmakers are in the best position to get screwed over by the bigger entities.

-Nate
 
Ryan, thanks for reaching out to your contacts at SAG for clarification. Though I have no current contacts, I am going to do the same through SAGIndie. Together we might be able to piece together some clarity on some of the most concerning things we've been discussing here.
 
Definitely, thanks for taking the time to look that up.

Is there any list of distributors to whom this would apply? SAG's site has a way to search production companies and by film titles to see if they're signatory, but I didn't see any such way to search for distribution companies who would automatically be assuming the DAG.
 
DJDecay said:
Ultimately the guild exists as an antithesis to the studio system, a versus not a collusion organization of the studio system. This I say judging their actions, not their marketing brochures, sometimes they make booboo's for their working members in the interest of representing the non-working members (those are the ones collecting royalties).
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This history of SAG, Ronald Regan and MCA which resulted in residuals being a part of most hollywood contracts doesn't paint SAG as all that much of an antithesis. SAG may not be a direct puppet of the major studios, but it is a tool the studios use to keep control over the entire media empire. Yes SAG thinks they are the strong and proud labor union, but the contracts they end up with more often than not help the MPAA/AMPTP/studios keep control. The harder it is to hire an actor, the more business for the handful of giant studios. The residual system(and all the other terms of the union contracts) were designed/perverted by the studios as tools to prevent new productions from edging into their turf. Just because it appears to give SAG a win, doesn't mean it isn't also helping the studios in other ways. Yes SAG tries to milk the most money out of everything and the AMPTP resists. But when they give in/settle, more often than not they do so in a way that just makes it harder for businesses that aren't them to deal with the unions.

I thought you had to add 15.3% for P&H for all of those actor rates. Which would mean a day performer under the 2009 deal might cost you $782(base)+$119.65(p&h) or $901.65 for a 10hr day. With a bunch of extra payments for all manner of reasons. Course I could be off by a mile.
 
I know common sense has no place in legalese, but it does seem pretty clear by the language given that SAG isn't going to come after someone for more than they made on the film. First of all they'd have to sue them, and then they'd have to get a judge's approval on said lawsuit. It wouldn't behoove SAG to sue some guy who made 50K on a movie while the studio sails off into the sunset with their 70 million intact. They simply want 4.5% of whatever the film was sold for, and the agreement that the distributor will HAVE to sign has nothing to do with you.

More than likely SAG would intervene on behalf of its actors and tell the distributor that they aren't (legally) permitted to show the film because SAG isn't being compensated correctly in regards to their original contract.

It would cost SAG more in legal fees to go after some poor schmuck than they would ever make back. If you have name, SAG actors in your film and a distributor wants to purchase it, I see no reason why they wouldn't sign the necessary contracts to have SAG actors in their distributed films. I mean, LOL, no distributor WOULD buy something from you with SAG actors in it without signing the necessary SAG agreements (nor COULD they legally -- thus they would not actually OWN the rights to the film until all the necessary legalities were cleared). YOU as the filmmaker are not representing these SAG actors. SAG is representing them. If you "sold" something that wasn't yours to sell, and someone else was making a profit off of what you sold them, the rightful "owner" (or, in this case, lien holder) can most definitely come in and prevent the new "owner" from doing business.

Think of it this way. You tell someone they can have your home for 50,000 dollars. You owe the bank 100,000. The house is worth 1 million dollars. You move out and move on, the bank goes to foreclose. One of two things will happen. Either A) The new "owner" will pay the difference, or B) the bank will take back the house. Consider SAG a vested interest in your production once you use their talent. At any time they can tell your actors to strike, just like they can tell your distributor to halt distribution if they don't sign the necessary contracts.

And, honestly, if you have name actors in your film, I don't believe you're included in the same "slush pile" that was mentioned earlier. Just an observation.
 
Good insight, Chamber. From a logical perspective, what you're saying makes perfect sense. I think what we all fear, though, is that SAG's contracts may or may not be logical in their pursuit of royalties.

I'm a bit dismayed that none of Ryan's contacts wrote him back, but that just reinforces the fact that this is an incredibly detailed and complex question, and one that all independent filmmakers NEED an answer to, before using SAG contracts. I have contact SAG myself and hope to receive a response, but I won't feel comfortable until I hear the same thing, multiple times, from multiple SAG mouths, and preferably in writing (not contract legalese).
 
Kevin McCallister said:
Good insight, Chamber. From a logical perspective, what you're saying makes perfect sense. I think what we all fear, though, is that SAG's contracts may or may not be logical in their pursuit of royalties.

I'm a bit dismayed that none of Ryan's contacts wrote him back, but that just reinforces the fact that this is an incredibly detailed and complex question, and one that all independent filmmakers NEED an answer to, before using SAG contracts. I have contact SAG myself and hope to receive a response, but I won't feel comfortable until I hear the same thing, multiple times, from multiple SAG mouths, and preferably in writing (not contract legalese).
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Also, for confirmation just talk with an attorney (or talk with an attorney who is willing to talk to SAG for you). I'm just starting out, but I know from real estate that it's important to create business relationships with persons who can help you in your field. Just like every private business owner should have a trusted accountant, so too should the independent artist have trusted legal council. The costs are pretty minimal and if nothing else you'll sleep more soundly knowing that a professional is taking care of your assets.
 
Id rather burn my movie to the ground than earn nothing and go into serious debt. The deal I make will cover the SAG percentage, if it still applies. Or I shelve it forever.
 
Well, that is exactly the position the SAG agreements put you into.

You either sign with a SAG-signatory distributor, or with one who will sign the Distributor's Assumption Agreement. Or you shelve it.

Which can be a tricky spot to be in -- I mean, if you're dying on the vine, you've spent your last dime, and York or some other micro-distrib offers you $25,000 cash, and you can't take it because of the SAG contract... that's the part we're concerned about here.
 
my agreement is six pages long. Signed in late 2008.

I'm summarizing:

agreement applies to independent, live action motion pictures made in the states. Agreement is Not intended for pictures produced for TV, cable use, video/dvd markets or otherwise produced primarily for commercial exploitation.

Jumping ahead to page 2:

Producer shall have the right to exhibit the picture theatrically. Should the initial release not be in theatrical markets, the picture shall remain a theatrical motion picture for all purposes of the basic agreement, as modified herein, and shall not be re-classified as a "Made for Pay" or "Free Television" motion picture. If the picture is distributed outside of the theatrical market, residuals will be payable in accordance with General Provisions, Section 5 and 5.2 of the basic agreement.

For all internet exhibition, producer shall pay performers an aggregate sum equal to 3.6% of the license fee paid by the licensee for the right to exhibit such picture on the Internet

then it gets into work related details for the SAG actors.

Then:

Security Interest in Picture

The guild, at its sole discretion, may require producer to execute docments nessessary to grant the Guild a first position Security interest in the picture and related rights to protect professional performers and the Guild against any default in the performance of obligations under this Agreement. Producer shall provide the Guild with all chain of title documents relating to the picture.

After this it's states the Guild must be thanked in the credits....which, of course is quite fair and expected


SOOOOOO...

how is the above to be interpreted. Looks like they are more concerned with Internet play than theatrical and TV etc....
 
Your agreement isn't six pages long. Your agreement is hundreds of pages long. By signing any of the SAG low-budget agreements, you also obligate yourself to the entire Codified Basic Agreement and you have to abide by every single provision in the CBA. What the low-budget agreements do is modify some provisions of the CBA.
 
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By reading the referenced sections in the massive codified basic agreement.

If you sell it to TV, you pay royalties as specified in the basic agreement. If you sell DVDs, you pay royalties as specified in the basic agreement.

And it also says that SAG can take a lien out on the picture, preventing you from selling the rights outright.
 
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