Using a SAG ULB agreement

Azmyth

Azmyth

Veteran
I'm about to start work on my 3rd feature film. I'm releasing #2 this summer. #1 is available at retailers everywhere via Chemical Burn Ent./WMMM distribution.

Both of those films were non union, with no name talent.

I'm trying to raise the bar each time, and being an actor also.. I've been talking with my agent (She also represents Chandler Riggs from The Walking Dead) and she is urging me to try to go with a SAG contract of some kind. I've been looking over the sagindie site, and its all mind boggling. It sounded pretty swell at first.

- $100 minimums etc.

But, the part that is driving me nuts, is the caveat about the agreement only being for theatrical distribution. If you are after any other avenue of distribution, you must upgrade to a higher level contract and in turn pay your actors back pay in adherence to the terms of the new contract, which is much higher than 100.00

The script I am working on is a comedy, and I'm planning to try to use some connections to garner some "name" cameo appearances from some celebrity personalities (not necessarily actors) so they may not even be SAG. However, I would like to also field the idea of casting 1-2 names in some of the lead/supporting roles just for marketing and publicity purposes. Ideally I'd like to get these names and personalities attached before I seek funding so I can use that as a means to pitch investors/crowd funding. I'm not sure how much the movie will cost to make yet, pending budget.. but I'm guessing.. 100-200k without factoring how much these name actors are going to cost.

What scares me is that I know that getting a distribution deal of any kid is hard to do these days. I also know that 99% of the stuff that gets made ends up on DVD and not theatrical. I'm on number 3 and no distributors have expressed any interest in anything theatrical, its always dvd/vod. That caveat would basically shelf my film if I did not get theatrical distribution.

My question is, am I reading this correctly? Is there any way to use 1-2 SAG actors under this ULB agreement and still have some sort of freedom in distribution, or is SAG going to hit me with a ton of fees/residuals if I decide to take my project to a non sag distributor.. or a more likely scenario.. that's all I can get. I'm just trying to be realistic about the expectations. I can make my movie without SAG and without the name actors just as easily, but I will lose that marketing aspect. I might be able to garner just as much attention by using just the celeb personalities who are not SAG to push it, but its somewhat of a niche film (a niche with a very large fan base mind you) but its not a horror film.

My agent told me about a burt reynolds film that just got made here in Atlanta that was under the SAG ULB and got distribution, and they never had to pay more than the 100.00 a day rate. Burt was around 40k. I'm just not seeing how an indie film maker with a budget of 100-200k would be able to recoup any costs or survive without being able to secure a dvd/vod deal without having to wind up paying all these fees.

I also read, that once SAG always SAG.. so if I decided to make this film SAG ULB everything I ever do from here on out has to be. I sort of look at it like moving to LA to act. I'd rather the work take me there, than jump in head first. Would the same apply here? Paranormal activity and Blair Witch I'm sure weren't SAG films, how about say Napolean Dynamite? Foot Fist Way? any of those SAG?

I just want to make sure I'm not getting in over my head, and I can't find any concrete answers to this.
 
Several filmmakers here have used the SAG ULB, I think Zak did on his latest, so you can ask about their take. FWIW, I think (that's just what I read, but please check with a lawyer), that you can satisfy the theatrical requirement by renting a single theater for a single night (where you can do a premiere with cast and crew etc.). And I don't know why you say "once SAG, always SAG".

That said, yes, distribution with the ULB is a nightmare, and there are many who for those reasons won't use it (I think Barry spoke to this on several occasions - maybe you can ask for his feedback) - there is something hinky going on with non-SAG signatory distributors and also how you can end up paying SAG from profits you don't actually make, but which they project out of their assumptions. I don't remember all the details, but I remember it was nasty. You are well advised to seek guidance from someone like an entertainment lawyer, because this stuff can really bite you... I would not rely just on answers on these boards.
 
I'm only going to give you a gut reaction to this thread because that's all I've got.

You've made 2 and it seems you're onto something because you're starting number 3.
Maintain a position where you have as much control as possible, and don't let someone that smells the potential
talk you into a position where they gain an advantage that costs you, in the short, and long run.

I think raising the bar should be about how well you do it on a budget equal to or less than the last 2,
like learning to squeeze even more tasty fruit juice out of the meager stones you can afford.

Think what your bargaining position and potential for investors might be after 4 DVD distro. deals or even 5,
and also consider if #3 might be the last, if you do a sag contract.

And what ever you choose, I say go get 'em.
You're obviously doing something right.
 
You should probably just call SAG and ask them a lot of these questions. They are there to help you navigate through the contracts and in the end, their answers are the ones that matter. Obviously there are some questions that are better asked here though, such as whether or not it's actually a good idea to go that route or not....But I wish I had an answer to that one
 
SAG will tell you everything's great, everything's wonderful, and that there's NO REASON not to use SAG!!!

But there is a reason. A big, huge, hairy, smelly, undefeatable, poisonous, toxic reason: the insistence that YOU (the producer) must pay royalties to every SAG actor, in perpetuity, on money that you may not have even received.

Now, SAG will laugh at that, they'll say "it's easy -- just have the distributor sign the DAG (Distributor's Assumption Agreement)." As if they will. They don't have to, they know they don't have to, and why would they? The type of distribution deal that dominates around nowadays is "we'll take your film and never give you a dime unless it makes a hundred million dollars" (exaggerated, but you know what I mean) so now you say "okay, mr. Distributor, that sounds great -- but in order to finish the deal, please sign this document that says you, Mr. Distributor, are now legally obligated to the Screen Actor's Guild to make royalties, and that you authorize them to audit your financial records, and that if you don't provide numbers that they like, then SAG gets to ESTIMATE how much money they THINK you've made off it, and bill you for those royalties."

Hands up for all those who think the distributor will say "okay, sure, sounds great to me..."

Ain't gonna happen. The distributor will tell you to roll that DAG into a tiny little tube, and then shove it up your jacksie. Then they'll say "we're not signing anything like that. We will distribute your film, but that contract is your problem, not ours."

So what happens? You either agree to take their deal, or you stick the film on the shelf and forget about ever getting a distribution deal ever. Your money, your investor's money, it's all gone.

And if you take the deal, that means that you, personally, are under contract to SAG to pay royalties on whatever money they think the distributor has made. NOT on what the distributor has paid you! But on what they think the distributor has grossed.

So, a hypothetical example: you make a low-rent $100k horror film, and you're "lucky" enough that it gets picked up by some lower-rung distributor who refuses to sign the DAG. SAG sees it in Redbox, so they go looking for their royalty check. You tell them "I haven't received a dime, they haven't paid me a single penny, so I can't pay any royalties." SAG says "well, the way we see it, any film that gets in Redbox has probably had about a $500,000 worldwide gross by now, so you owe us $60,000." Guess what? Contractually, you owe them that $60,000. Better sell your house to pay SAG their royalties! Or declare bankruptcy. And, oh, by the way, they'll come looking for you next year too. And the year after that. And the year after that.

Now, meanwhile, the distributor can show actual proof that they'd only made, say, $10,000 from all their efforts (and, of course, that their expenses were, coincidentally, $10,000, so there's no profit, and therefore that they don't owe you any royalties). But will they show that to SAG? Why would they? They want nothing to do with SAG. And, even if they DID show it to SAG, and even if SAG accepted their numbers, they're still going to come after YOU for the royalties, because you signed the contract with SAG.

Is this a nightmare scenario? Yes it is. Yet it's exactly what can happen.

What's SAG's answer? "Well, just get a distribution deal through one of the major studios, because they are all signatories and therefore they are assumed to have already executed a DAG for any film they sell." Okay, sure, Mr. SAG, I'll just go right on down to Warner Brothers and get a distribution deal, I'm sure that'll be easy...

Is there any way out of this? Not really, but a few strategies you can employ. First, if you're insistent on using a SAG agreement (ANY of the SAG agreements, it doesn't matter which one) you would be insane to sign it personally. You simply must must must create an LLC or corporation, and that independent entity owns the film, and that entity will be what signs the SAG agreement. This is standard practice, but don't go thinking your budget is too small to afford this -- because otherwise, ALL your personal assets are at risk. SAG could take your house, they could take your car, they could take your savings, if you sign that contract personally. So don't do it. Sign it in the name of a corporate entity or LLC, period, end stop, absolutely mandatory.

Second, make such an awesome, kick-@$$ film, that distributors will fight each other for it. If you do that, then you can with confidence demand that they sign the DAG as a condition of you agreeing to any distribution deal.

Third, if you insist on releasing it to a non-signatory distributor, without a signed DAG, then ... prepare to file bankruptcy on the LLC or corporation you created. It may never come to that, but -- if it does, at least you will have prepared for it and insulated your personal assets away from the impending seizures. SAG may be able to claim all your corporation/LLC's assets, but if you've structured your affairs properly, they shouldn't be able to go after you personally.

Above all else, remember this: SAG is there for the actors, not for you. They are doing everything they can to make it easier for you to make your film, using SAG actors. And those steps are commendable! These newer (well, since 2005) agreements are vastly better than they were before. BUT: they still make it difficult, if not prohibitive, for you to SELL your film. And that is my problem with them, in a nutshell. They are there to represent their actors, not you. They are there to extract the maximum payment for their actors, and you are obligated to sign the entire Master Agreement with them. The Ultra Low Budget is not a replacement of the gigantic SAG contract, it is a modification to the contract. You are still obligated to abide by each and every clause in their giant contract, except for those that are specifically modified by the ULB.

The ULB contract was a great step forward in helping you to MAKE your film, but it is a major roadblock against you being able to SELL your film. Unless you happen to get lucky enough to get a distribution offer from one of the major studios who is already a SAG signatory.
 
EDIT: my info may be out of date, as it's been a while since I've dug into the SAG situation. But a brief glance at sagindie doesn't seem to show anything as being different from the last time I looked into it.

Also, nobody should take the "$500,000" and "$60,000" figures literally, those are just random examples.
 
Thank you Barry, you truly are an asset and a friend to us indie folk. I remember your warnings regarding the ULB contracts from years past, and I'm glad you laid it out again. People forget that making a film is not just about the art or craft of it, but it has an administrative and business side, and often beginning filmmakers are woefully uninformed and unprepared for that aspect of the process. This is why dvxuser and folks like Barry are a life-saver.

Now, just because I like hearing all perspectives it would be great to hear feedback from those dvxusers who have done ULB features and what their experiences were... not calling out any specific person, just whoever feels comfortable to discuss it. Thank you, and thank you Barry again!
 
I just wanted to report, that I talked to my local sag office yesterday.
I asked a whole bunch of questions..

According to the rep I spoke with.. under the ULB agreement, she didn't believe the stipulation about needing to release theatrical or be stuck upgrading contracts applied. She said but if for some reason she was incorrect, 4 walling a theater would serve as a "theatrical release" and then you'd be free to do what you want without having to change contracts.

The bond is 40% of what the actor's pay will be. She said the bond can be lowered by having their pay up front in an escrow account, and she said paying them up front will automatically lower it.

The contract only covers SAG performers and non sag performers the producer deems "professionals".

I'm hiring a former WWE superstar, who has been in several big movies. He's sag. He's charging me 1500.00 per day. Which he will get up front. He will be the ONLY sag actor in the entire production unless we see some awesome people during auditions. Most of the actors around here are non union, because its stupid to join if you live here.

She told me it was best to work with a payroll company since there's alot of extra crap to figure for their pay. I think this will be doable with just one sag talent on the roster. I could see it being a pain in the arse though with a whole cast full. I'm still trying to be as cautious as I can with this, but there's no other way to get him in the film. He wont' do it otherwise.
 
Sag ulb

Sag ulb

Barry_Green said:
EDIT: my info may be out of date, as it's been a while since I've dug into the SAG situation. But a brief glance at sagindie doesn't seem to show anything as being different from the last time I looked into it.

Also, nobody should take the "$500,000" and "$60,000" figures literally, those are just random examples.
Click to expand...

I'm actually going through all this SAG Ultra-Low Budget stuff right now, having just completed my film and currently negotiating with distributors.

The info I have gleaned so far, is that one simply needs to four-wall the film first at a local eligible theater. After that, the producer is free to sell the film to DVD, Pay TV, etc. without retroactively owing higher day rates to actors. Other producers who have been down the road have concurred.

Residuals will still be owed under the basic agreement for DVD, Pay TV, streaming ,etc. However this is NOT calculated on monies the producer has not received. I read over the agreements several times to be sure and the following is the definition of "Gross Receipts" where the producer has licensed the film to a non-affiliated distributor:


Section 5.2 E 3(b):

If the Distributor is not the Producer and is not
owned by or affiliated with the Producer, the "Distributor's gross
receipts" shall be one hundred percent (100%) of the fees received by
the Producer from licensing the right to distribute such picture by
cassette.


So the producer has to actually get paid by the distributor before the SAG calculations on residuals come into play. SAG in turn has the right to audit your books to double check how much, if any, you have been paid if your reported amounts differ from the norm.

Furthermore, there are other clauses that allow you to deduct profit participation payments to actors from the residuals, if you have already contracted gross profits to actors. In my case I already promised actors 2-3% gross profits, which will reduce the SAG residuals to negligible amounts.

Bottom line, SAG ULB may not be the horror story some think it is. Of course I have not completed the process yet, so ask me in another 6-12 months. But so far, the written requirements appear to be fair enough for indie filmmakers, allowing us to make a profit while still using SAG actors.
 
After reading all the horror stories, I'm just not willing to risk it. I'm sticking with non union and financial core actors. Read here what SAG thinks of Fi-core members (who still pay SAG dues) from their own site:

http://www.sagaftra.org/get-facts-about-financial-core

They hate Fi-cor because it's cutting into their action.

If you must have a particular actor who is SAG and understand the risks, go for it - but there are plenty of talented non union and fi-core actors out there, ready and willing to work. Maybe not in LA, but in the rest of the country, plenty.
 
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