Commercial Contracts FAQ

Yes. Please check with the Guild to ensure the company is signed to a contract before working in the production.

Yes, members may not work in a PSA unless the company is signatory to the union contract. If the union has approved the commercial as a PSA, the session fee and pension health contributions must be paid. Additionally, the residuals are waived for a one-year period. Use for each additional one-year period requires the written consent of both the performers and the union. For these extensions, the performer may (but is not required to) waive additional payment. The producer may not request a use period longer than one year at the time of the original session. Please check with your SAG office for provisions governing PSAs for the Partnership for a Drug-Free America.

Normally, session and residual checks are sent to the performer directly, or to whomever the performer has designated on the employment contract (such as to his/her agent). However, checks for Spanish and Asian language commercials, as well as for claims that have been filed, are sent directly to the Guild, and in turn, are forwarded to the performer.

Yes, when a commercial airs on interconnected stations in under 21 cities, there is a flat rate paid for all use that occurs within a 13-week cycle. Class B is for program use that occurs in 6-20 cities and Class C is for program use that occurs in 1-5 cities.

• 1st and 2nd Auditions: No payment is due for the
  first hour from the call time or arrival time, whichever is later.
• 3rd Audition: A performer is entitled to $141.80 for the first 2 hours. For
  each additional ½ hour, $35.45 is due.
• 4th
  Audition & thereafter: A performer is entitled to $283.55 for the first 4
  hours. For each additional ½ hour, $35.45 is due.

Remember to use your SAG member ID number, not your Social Security number,
to prevent identify theft and to sign in and out. If you are entitled to
audition overtime and do not receive a check within 12 business days, contact
the SAG office so that a claim can be filed.

Downgrade. A principal performer is entitled to residuals and may not be downgraded as long as his/her face appears in the commercial. If his/her face does not appear but his/her performance otherwise remains, the performer must be notified of a downgrade and paid a downgrade fee. Thereafter, the performer will not receive residual payments.

Outgrade. If a principal performer’s photography or soundtrack is completely edited out of the final version of the commercial, the performer must be notified of the outgrade. The notification must be made within 60 days after the completion of employment but in no event later than 15 working days after the first use of the commercial. No additional fees or residuals are paid to an outgraded performer.

A principal performer receives time-and-one-half for the ninth and tenth hours and double time thereafter, in hourly units. Principal performers receiving more than two times the session fee per commercial per day receive time-and-one-half instead of double time after the tenth hour.

The “maximum
period of use” of a commercial is 21 months (a total of seven 13-week holding
fee cycles). Provided the producer continues to make timely holding fee
payments, the performer is held exclusive to the product for the 21-month
period. If the performer (or his/her representative) does not send a timely
renegotiation letter, the producer can extend the maximum period of use for an
additional 21 months at the same rates as for the original 21 months.

Not if the performer is working at his/her home base. When an on-camera principal performer is employed, other than on an overnight location, consecutive employment does not apply. If you are not given firm dates, the subsequent dates are subject to the performer’s availability.

Holding fees are paid to a performer in “fixed” cycles, every 13 weeks from the session date, if the producer wishes to retain the rights to air the commercial and wants to hold a performer exclusive to the product. During this 13-week period, a performer cannot accept work in a commercial for a competitive product. For example, if a performer has received a holding fee for a Pepsi commercial, he/she may not accept work for a commercial advertising Coca-Cola during that period of time.

There are two types of
residual structures for cable:

• 1.Broadcast
  commercial used on cable networks: Cable residuals are based on the total
  units (up to a maximum of 2000 units) for all cable networks on which the
  commercial airs during a 13-week cycle. A unit value is assigned to each
  network based on the number of subscribers. Depending on the number of units,
  the payment to an on-camera performer will range from a minimum amount of
  $567.10 (session fee) to a maximum amount of $2,738.00. (Group performers and
  voice-overs are paid under a similar formula with lower rates.) Session fees
  may be credited against local cable use only; holding fees may never be
  credited against cable use.
• 2. Cable-only commercial : When a commercial is produced only for cable use, the formula described in
  Paragraph 1 above is used to calculate residuals. In cable-only commercials,
  no holding fees are paid and a performer therefore cannot be held exclusive to
  the product. A performer must be advised at the time of audition and/or
  booking that a commercial is for cable-only. The maximum period of use for a
  cable-only commercial is limited to one year. The producer must contact the
  performer and negotiate for any extended use periods.

There are two types of residual payment formulas for a commercial used on the Internet:

• 1.Commercials “made for” the Internet: There are no minimum fees set under the Contract for a commercial made directly for the Internet. The producer and the performer are free to bargain fees, provided a Pension Health contribution is made. The performer is not held exclusive for “made for the Internet” commercials unless Producer negotiates for this right and pays holding fees.
• 2. Broadcast commercials “moved over” to the Internet: A commercial made for broadcast and used subsequently on the Internet requires payment of not less than 300% of the session fee (3 x $567.10= $1701.30) for one year of use. Extending the use beyond the first year for up to 9 months remaining in the 21-month maximum period of use is permitted if the producer pays an additional $1701.30. Session or holding fees cannot be credited against Internet use payments. If the performer checks off the box on the front of the employment contract, the producer is required to bargain with the performer for Internet use rights.

In the event of untimely payment, late payment damages are due as follows: $3.00 per business day up to 25 days or a maximum of $75.00. Additional damages become due in the event that a claim is filed and full payment is not made within a specified time. When a payment is not made on time, generally late payment damages are not included in the check unless a claim has been filed by the union. If your payment is made late and late payment damages have not been included in the check, please contact the Guild to file a claim.

On the front of the
standard SAG employment contract, there are 3 separate boxes to check if you
do not consent to use of your commercial on the Internet, as a dealer
commercial, and/or on a simulcast. On the reverse side, two separate
paragraphs grant rights to producer for foreign and theatrical/industrial use.
Although not a contractual term, “clean contract” is used by producers to mean
that, as a condition of employment, you must grant these rights at the time of
booking at scale, i.e., you may not mark your contract by checking off these
boxes or crossing out the paragraphs.

In the event that the
producer did not acquire these rights at the time of booking, the performer
should check the boxes on the front and strike the paragraphs on the back. By
doing so, the producer must come back to you and negotiate for these rights.
If there is any question as to whether any of these rights were granted to
producer, check with your agent before signing your contract.

Can a producer require the performer to accept a “clean contract” as a
condition of auditioning for a commercial?

No. Performers
cannot be required to accept minimum fees as a condition of auditioning. A
producer is permitted to state the company’s intent to offer a performer the
minimum fees; however the producer is obligated to advise the performer at the
same time of his/her right to negotiate for better terms and conditions.

If the producer has not paid a holding fee to a performer by the first day of the new holding fee cycle, he/she is released from exclusivity and may audition for, and accept employment in, a commercial for a competing product.

Is the producer obligated to send a notice releasing a performer from the commercial?

The producer is not obligated to send a notice releasing a performer from the commercial. If a performer does not receive a holding fee for a new 13-week cycle, the performer has been released from the commercial.

Holding fees are due (and must be postmarked) no later than the first day of the holding fee cycle. There are several choices if the holding fee is not paid on time. The performer may ask for late payment damages and accept the holding fee. Or the performer may reject the holding fee payment and consider him/herself released from exclusivity. Or the performer may reject the holding fee payment and renegotiate the terms of his/her contract pertaining to the commercial if the producer wishes to continue to use it.

When a casting director issues a “first refusal” it means that a final casting decision has not been made; the casting director is requesting that the performer contact him/her before accepting a booking for another job on the same day(s), i.e., giving the original producer the first opportunity to book the person. A “First refusal” is not a booking and the performer has no contractual obligation to get back to the casting director or turn down the second job nor does the producer owe a cancellation fee if the performer is not used. As a professional courtesy, it is suggested that the performer advise the casting director of the second job before accepting the booking.

If a performer has been put on “hold,” the producer has engaged the performer and a cancellation fee is due if the producer cancels the engagement. A cancellation fee would not be paid when a performer is placed on an “avail” and not used.

These terms are not always used properly. If you have a question as to whether you have been definitely booked, you or your agent should ask the casting director, “Is this a booking?”

Multiple tracking, which requires an additional 50% of the original fee for solos and duos, is a re-recording over the original track or adding another track, electronically or mechanically, which contains the same material as recorded on the original track. Sweetening, which requires an additional 100% of the original fee for solos and duos, is the addition of a new or variant track over the original track. Group performers are paid an additional 50% of the original fee for unlimited multiple tracking and/or sweetening.

Wild Spot is a type of use in which a commercial does not air on interconnected stations and does not sponsor a program. Time is bought on individual stations in individual markets or cities. Each market/city is assigned a unit value based on the number of television households and the performer is paid for all units of use within a 13-week cycle.

The Wild Spot payment is due within 15 working days from the start date of the cycle. If the commercial is broadcast in additional cities within the 13-week cycle, the producer may pay for those additional units within 15 working days from the end date of that 13-week cycle.

If a commercial is running
on interconnected stations (a network) in more than 21 cities, or sponsors a
program (“This program is brought to you by …”) this constitutes Class A
program use. The cycle begins with the first use date and payments are made on
a declining rate formula for each use occurring within a 13-week period. 

For example, the first Class A use is paid at the same rate as the session
fee. The second use within the 13-week cycle is $130.05 for an on-camera
performer. Uses #3-13 are paid at $103.20 each and the 14th and each use
thereafter is paid at $49.45. ;(Group performers and voice-over performers are
paid under a similar formula, with lower rates reflecting their
classifications). A lower per-use formula applies for use that occurs on PAX
TV.

If you see your commercial airing but are not receiving use fees, you should file a claim with the Union. When you do so, it is helpful to provide as much information as possible, including the date of the sighting, the program, the channel, and the time.

Residual payments must be
postmarked within 15 working days from the first use in a 13-week
cycle. However, payment for all Class A uses that occur from Monday through
Sunday are due within 15 working days from the following Monday. In the event
that payment is not made on time, late payment damages become due.

Session payment for a commercial is due 12 business days after the session.

A renegotiation letter must be sent 60 to 120 days
(two to four months) prior to the end of the maximum period of use. Check your
pay stub to find the end date of the maximum period of use (MPU), and count
back 60 to 120 days to establish when you or your agent must send the
notice. The letter should be sent to the producer (ad agency) listed on your
employment contract. Sending the letter gives the performer the right to
renegotiate new rates or to say he/she does not grant the right to continued
use of the commercial. It is advisable to send a copy of the letter to the
Guild at the same time.

If your agent does not send a
renegotiation letter, and the commercial is renewed for an additional 21
months at the same rate, he/she may not take a commission.

Under certain circumstances, the beginning and/or ending of a commercial made for a particular advertiser may be changed without creating an additional commercial. The Contract provisions governing this area are complicated and we suggest that you contact your local SAG office for assistance.