Where can I find a list of SAG (Screen Actors Guild) Hidden Fees?

[indiemogul]

Where can I find a list of SAG (Screen Actors Guild) Hidden Fees? You know the ones they magically spring on you when you start filming. Anyone know where I can find a list of these hidden fees? :cheesy:

I don't know how I'm suppose to come up with a SAG budget if they are going to randomly spring fees on me. I read somewhere that the day of shooting, they hit one filmmaker with a fee of $20,000 a week before shooting. Where are they pulling these random numbers from? It's insane.


One hidden fee I recently read about is is you get a foreign sales agent you have to pay up front fees prior to making any money on it yourself. The only way around this is if you have direct contacts already with foreign territories and sell directly then you don't have to pay the fee. Who has direct contacts, studios. So in turn, the contract is designed to benefit studios and squeeze the little guy out. How frustrating.

I am pro-union. I used to be in the IATSE Local 181 in NY when I was an assistant production coordinator. I am all for taking care of people who work hard. And all of the actors I have worked with to date, work hard! And in return, I take care of them. I put them up well and make sure they have every need addressed and rightly so. I do the same for the crew. I am all about a happy, healthy, well-fed, well-hugged set.

The problem I'm having right now though is with SAG. I have worked with SAG for years. I've been signatory many times and followed all the rules and have worked with their wonderful actors. I really have no issue with SAG as a union.


What I have a problem with is their contract terms for foreign TV sales. On one of our movies, we are being told that we owe the actors residuals on the gross amount of foreign TV sales despite the fact that we have received $0 from foreign to date.


The issue is that we have hired a foreign sales agent to sell foreign. If we had sold direct to the foreign distributors then we wouldn't owe residuals until we received revenue. But since we hired a foreign sales agent, we owe as soon as the foreign sales agent earns money. The problem is that the foreign sales agent will not give an advance and needs to recoup their fee and expenses before we see any revenue. And how are we to sell foreign direct when we don't have the relationships with foreign buyers and we should be producing movies and not spending time running from foreign market to foreign market?


This situation leaves us in a position to owe SAG residuals on sales from which we have seen no money. Now, SAG says, get the foreign sales agent to sign an assumption agreement in which they assume paying the residuals. Unfortunately, no foreign sales agent I have run into will sign one. So that leaves the producer on the hook to pay all the residuals based on gross even when the producer earns net revenue. Why would I enter a deal like this? Well, I need to keep making movies and trying to sell them. What choice to do I have?


The worst part is owing residuals when we have seen no money from the sales. I am fine paying residuals. I'm happy to pay them. But please wait until I have earned the money in order to pay them. Don't ask me to go to my family (who does not work in the business) and say, hey, give me money to pay the actors residuals. Anyone would say, that's crazy.


SAG's response is, well, that's the contract you signed. Yes, I signed it and so have countless other producers because we have no other way of making a movie with SAG actors. I have to sign it. And it's a contract that is negotiated by people who make studio films that make tons of money. The movie I am discussing here is not a studio film. I'm happy it's getting out to the world but I'm not wanting or willing to be robbed along the way.


Change needs to happen. Indie film producers are going bankrupt and being raked over the coals by ill-conceived contracts that do not protect their rights. I'm in this business to survive and have it work for everyone. I want to take care of the actors. I love them and want to protect them. In turn, they should be protecting me so I can set up more movies that they can star in.


Let's all work together and find a win-win solution. Don't bankrupt us SAG. We want to keep making movies so we can hire your members. Help us to do that.

http://allaboutindiefilmmaking.blogspot.com/2011/04/sag-i-love-your-members-but-youre.html

 

[indiemogul]

SAG Hidden Fees

SAG Hidden Fees

Reading stuff like this just makes me nervous dealing with them, but I have no choice. I need certain actors to be in my movie and they are SAG.

The TRUTH about the SAG Ultra Low Budget Agreement

by John G. Thomas
We independent producers are the future of film and video entertainment. We break new ground every time we go to work while the major studios turn out yet another Spiderman or Ironman with wall-to-wall effects and no discernable story.
So, like many filmmakers I was excited when I first heard about SAG’s attempt to cross the street and work with us. Actors for a hundred bucks a day, relaxation of all those silly rules and regulations, no first class airplane tickets for actors and more – heck the Ultra Low Budget Agreement seemed like a fantastic idea for productions budgeted less than 200K.

“SAGIndie,” as they’ve chosen to re-cast themselves, has even gone so far as to stage monthly “contract workshops” to cleverly “explain” the wonders of this new agreement to all comers.

With SAG, as always, the devil is in the details.

Paragraph 1 of the Ultra Low Budget agreement says, in part:
“It, (the Ultra Low agreement) is not intended for pictures produced for television broadcast, cable use, video/DVD markets or otherwise produced primarily for commercial exploitation.”

Translation: Go ahead and make your movie but you’re not supposed to sell it.
Well, that’s just great, huh? (Unless you’re making movies only to give a free copy to Uncle Harvey.) It’s what SAG doesn’t tell you in those oh-so informative workshops that’s most important.

However, you will benefit from this agreement if you meet all of the following conditions:

1. Your production must cost less than $200,000.00.
2. Must shoot entirely in the U.S.
3. Cannot be animation.
4. No music videos allowed.
5. All the financing must come from the U.S.
6. You can only distribute the picture, (sell tickets, make money) in mainstream “commercial” movie theaters.
7. You’re not interested in making money from DVD, television, the Internet, foreign sales, etc.

So, does any of this apply to your production?
Ask yourself: When was the last time you heard about a film that cost less than 200K with no big stars that was picked up by a major studio and opened in 3,000 movie theaters?

Sorry, the so called “art theaters” don’t count. SAG has a list! Go ahead, try and convince a major theater chain to show your unheard of movie without a hundred million in prints, PR and paid ads.

Here’s more:
“Should the initial release not be in the theatrical market, the picture shall remain a ‘theatrical motion picture’ for all purposes of the Basic Agreement…”

Translation: You must pay residuals to the actors, (before you or your investors) from the very first dollar that comes in.

Here’s how it really works:
The Ultra Low Budget Agreement, (and all the other low budget agreements) are simply modifications of the “Basic Agreement.” The Basic Agreement, (which you must sign in addition to the Low Budget Agreement) is a 2 to 3” thick, complex, conflicting and all but indecipherable rule book that was written years ago for the exclusive benefit of SAG and the major studios, (all the AMPTP members we’ve come to know and love). If you’ve got nothing better to do for a few days and you have plenty of strong coffee, take a look at it.

In the Basic Agreement, the producer or studio must first pay the actor for a days work.
Okay, done.

In exchange for the actor’s services that day the studio gets to make all the money it can from theatrical exhibition, (i.e., movie theaters). Even movie theaters in foreign countries are included in the package! (That’s why some studio films remain in some movie theater, somewhere, for a long, long time.) All of the money they make in the movie theaters is “free money.” They don’t owe the actors a penny for those showings. This is called the Initial Exploitation.

But after television came along and those old, previously worthless movies starting making money all over again, SAG came up with residuals. They said, “Go ahead and make all the money you want in the theaters but now we want a piece of that tasty TV pie!” Everything after the initial theatrical showing was now considered a secondary income source, or residual income.

So, what’s this got to do with the Ultra Low Budget Agreement?

It means that unless your low budget masterpiece has a genuine theatrical release, you owe them money for every TV or cable showing, every Internet download, every foreign sale and every DVD you ever hope to sell – from day one.
SAG owns a piece of your film forever – and the part that they now own is superior to yours. Like the difference between preferred and common stock in a company. Only you've got the bad stuff.

That’s why the Ultra Low Budget Agreement, (and the other low budget agreements) say, “…and shall not be reclassified as a ‘Made for Pay’ or ‘Free Television’ motion picture.” Otherwise, you’d be able to make some money for all your hard work and the money you paid the actors because video would be your production’s initial, “free money” exposure.

Of course, SAG would never want THAT to happen! Why? Because it would benefit the independent producer at the expense of their most important customers, the major studios. Remember, it was SAG and the AMPTP who wrote the book of rules we must all follow, (i,e., the "Basic Agreement"). They never asked us and I doubt they ever will.

The Ultra Low Budget Agreement has plenty of other “gotcha's,” some clearly written out, but most of them hidden where you can’t see them – on purpose.

While no residuals are due from the initial theatrical release, (which 99.99999% of independent producers will not get) SAG members are entitled to residuals between 4.5% and 5.4% of the gross revenue from video/DVD and 3.6% from pay and free television. Now, on the surface, even that doesn’t sound too bad. “Five percent, I can deal with that.” Billy Mays might say, "But wait! There’s more!"
SAG assumes that for international sales, 15% comes from theatrical, 65% from video/DV and 20% from pay/free television, (which is actually pretty accurate). SAG, in effect, will want residuals from 85% of a film’s international gross revenue. That’s based on 85% of what the distributor in Poland made, not what they paid you or your investors as the “minimum guarantee.” (aka, all you’ll ever see anyhow) Because SAG wants a piece of the gross, it’s entirely possible that SAG will make good money from your movie and you’ll never make a cent. There are many cases of producers who end up broke and owe SAG for residuals.

Not so cool after all.

SAG does many things to make sure they get your money before you do. First of all they will require a residuals deposit. That is, they require you to pay them up front for money you haven’t made yet!

What typically happens is this:
A few days before principal photography begins, (when you’re the most vulnerable!) SAG will suddenly demand a cash residual deposit of say, $20,000.00. You don’t have the money and SAG shuts you down. Later, if you’re lucky, maybe you and SAG negotiate an agreement and you can start all over again. Maybe your crew is still there, maybe not. What about the cast - who knows? SAG’s unwritten policy, (like any tough businessman would do) is to always wait until the filmmaker is weakest and then nail him.

SAG will also require that any distributor who sells your film sign a Distributor’s Assumption Agreement to bind the distributor to your agreement with SAG. The major studios always sign, but most independent sales agents will simply laugh in your face.
Recently, SAG has begun to require yet another agreement be signed called the Laboratory Pledgeholder Agreement. This is just like a Laboratory Access Letter, (which allows your distributor to make copies from your master to sell). Except with SAG, it's just the opposite! Nobody has access to your negatives or digital master until SAG says okay.

SAG also may require a Collection Agreement. All of your money goes into an escrow account and you’re last in line - again. Remember, they get their money from gross, while you get yours from net,. This is in addition to what’s called the UCC, a sort of legally-binding mortgage on your film, (forever) which you must sign and is registered with the Secretary of State for good measure. This is not negotiable.

Oops, don’t forget that you’ll always be required to make a cash Salary Deposit in addition to what you’ll pay the actors – even if all of their salaries are already placed in an escrow account or with a payroll company for safe keeping. They know you’ll need this money later for post and they’ll grab as much as possible and give you what’s left. The fun never stops with SAG.

Don’t forget the other conditions of the Ultra Low Budget:

If an actor gets a better offer during your shoot, they can leave any time they want.
Still have to pay pension & health, (about 15% additional) payroll taxes, (17-20%) etc.
Must pay 3.6% of any Internet monies directly to the actors.
All the so-called “Alice in Wonderland” rules and penalties still apply like: meal period violations, turn-around time rules, assorted liquidated damages, rest period incursions, overtime, travel time, stunt adjustments, etc., etc.
In general, you must follow all the other rules and regulations of the Basic Agreement except those specifically excluded or modified by the Ultra Low Budget Agreement.

​

In fact, if you put a pencil to it, SAG’s regular Television Agreement is a better deal for even the low budget independent producer!
Of course, the SAGIndie folks will rarely ever mention any of this to you during their helpful monthly “workshops.”

They know that if you knew the facts you’d never deal with SAG!

These loathsome agreements have been made to suit the major studios and the way they do business. From a strictly administrative point-of-view, we independents are a pain in the ass for SAG. I’m sure they wish we’d all just shut up and go away.

Let’s face it, the independent producer of a film budgeted less than $200,000.00 has nothing but the residual markets to look to for any potential profit. If we can’t make a profit in these emerging markets we won’t be making too many films in the future, will we?

To be fair, SAG is simply enforcing the existing rules and trying to make sure their actors are paid the residuals they are guaranteed by their contract. Sure, they’re aggressive and dysfunctional, but as long as they believe they can get away with it, they have no motivation to change. Fact is, if it weren't for the big name stars and familiar character actors there would be no SAG at all. A good friend-of-mine who's a member of SAG said that "If the members knew what their guild was really doing they'd be marching with torches down Wilshire Boulevard to SAG headquarters!"
And please don’t assume that I’m anti-union! In fact, I’m 100% PRO-union. ALL of the other entertainment unions actually want their members to work, set high professional standards and will bend over backwards to support and help you get your film made. They represent the BEST film professionals in the world.

But what does it say about a labor union when 97% of their members are unemployed and “screw the independent producer” is their mantra? The actors deserve much better than what they've got.

Just remember you can hire all the SAG and non-SAG actors you want with Financial Core. AFTRA should be strongly considered as an option as well.
I welcome your rants, raves, questions, corrections and comments. Email: john at Easy-Budget.Com

http://www.easy-budget.com/articles/articles.asp?article=ultralow

 

[indiemogul]

I searched to try to find sample budgets with SAG info on them but every sample budget I pull seems to magically leave off any trace of dealing with SAG on it.

I read recently that SAG requires a deposit of 40% (deposit) plus around 15% (health/benefits) for each actor. That means if your SAG Hollywood actor costs you $100k to get, you have to give SAG $155k approximately. If you don't break any of their rules, go over, etc. You should get the 40% deposit back at the end of shooting. If your budget is too low, they may require more of a "deposit" on top of what you pay your actor for your agreed upon fee.

What's really convenient is how they leave any of this deposit info off their overview of their contracts...
http://www.sagindie.org/resources/contracts

I asked a producer friend about this, and they had no idea about it either and have done all their contracts leaving this factored out!! I wouldn't have known about it unless I researched it. I recently read of someone who had to pay more than the 40% deposit they stated because their budget was too low and SAG felt they should deposit more...

We are trying to work with SAG on the Ultra Low Budget contract as I write this.

They over charged us!!!!

They came up with a ridicluos SAG actor BOND amount.

We went to the SAGindie workshop, and checked our information very carefully all over the WEB. At the work shop and other WEBsites we found statements that there's a 40% bond for SAG Salaries, and to make sure you budgeted for it. We did budget for it, but that was not the correct amount. We tried to contact SAG about the BOND during the time we were writing the budget to make sure this was right, but nobody at SAG would answer this question. That left us no choice, we had to figure out the bond from other sources. So we went with the 40%. That was wrong! It's actually the entire amount you are paying your SAG actor's plus 10% -- plus 15.3% of entire cast Salary for pension and health.

So say your total budgeted salary is $5,000.

You would pay the $5,000
Plus 10% additioanl $500
Then pension and health $765

The total bond would be $6265 plus your actors Salaries which is 5,000 so your total budget should be $11,265 for actors.

SO DO NOT USE THIS 40% when figuring your budget.

SAG hit us with this two days before we were suppose to start shooting.

We would never have gone SAG route if we didn't go to the SAGindie workshop, which is basically selling the new low budget contract, and there information is very very wrong. Do not trust these workshops.

http://www.indietalk.com/showthread.php?t=29932

 

[indiemogul]

What's also scary is the fact that if you do the SAG Ultra Low Budget agreement, you have to RENEGOTIATE all your rates for all your SAG actors when you step up to a contract that allows you to release via TV/DVD. The SAG ULB agreement blocks you from releasing to and getting distribution to TV/DVD and is for theatrical only. Yet they KNOW, low budget movies have a slim chance to get theatrical. Their only shot is VOD/TV and DVD yet they block you in the contract from pursuing it. So you have to step up your contract to one that you CAN do it. However you don't just step up to those rates, but you may have to renegotiate them as well. So you're better off not even doing the SAG Ultra Low Budget agreement and starting with a better contract to avoid being sued/owing a lot more money because it's SAG who negotiates them. Again, who knows what additional amounts you'll owe. It's so frustrating dealing with them. The more info I read the more it seems they are out just to protect the studio's interest and squeeze out independent filmmakers.

 

[Steve House]

...The more info I read the more it seems they are out just to protect the studio's interest and squeeze out independent filmmakers.

No, they're there to protect the actor's interests. That includes insuring they get paid before any revenues you receive are applied to recovering your investment, paying off other investors, or applied to profit. Cast and crew are first in line for payment, recovery of your investment is secondary. Just an opinion...

 

[Patryk_Rebisz]

Yes, you put down SAG actor's salary + pension as bond, then pay them then get the bond back. So you do have to budget for that.

 

[ullanta]

I think by definition you'll never get a list of "hidden fees".

 

[ullanta]

"It means that unless your low budget masterpiece has a genuine theatrical release, you owe them money for every TV or cable showing, every Internet download, every foreign sale and every DVD you ever hope to sell – from day one. "

Are you saying this is a problem? That's clearly cost that must be paid before "profit", no?

I really don't mean to be annoying, and am not involved with trying to make a profit from narrative work. But It seems to me that the complaints in this thread are from people who are either trying to misrepresent themselves or are just not understanding the idea of the Ultra Low Budget agreement. That is, it seems like this agreement is there to make things easy for people NOT TRYING TO MAKE A PROFIT ON THEIR FILMS... that is, people aiming for festivals and the like. Any potential profit would come from being picked up at such a festival by someone/something with the financial resources to renegotiate into another kind of contract. People here seem to think that this contract is supposed to be an easy way for independent producers to make more of a profit; that's clearly not the case.

So... I'm curious.. how id SAG marketing this contract? What are these workshops like? Are they specifically saying that it's a good way for small productions to make a bigger profit, or is it pushed as a way for small productions to complete films at all? What do they say about profit as a goal?

Like I said, I'm an outsider without a stake in this; don't want to rile anyone up, and have not looked at any info outside this thread itself. But I'm curious, and this is how the thread reads to me!

-Barry