Greg Answered:

On a 1.6 mm indie feature w some SAG, SAG-E and non SAG actors. Who gets PHW paid by production? Also who gets paid residuals and how much If your film is 1.6 million, and shot in the US, there is one set of rules. And If you are shooting outside the US there are other rules. If shooting in the US, then your SAG eligible actors likely will have to now become SAG and your non-SAG have to Taft Hartley. For foreign shot films and Ultra Low Budget films, there is no Taft Hartley for non-sag. your SAG -E might have to become SAG. PHW is paid as a percentage of the actor’s wages and is due for every actor subject to SAG jurisdiction on a film. So the PHW goes to the specific actor. I am sorry, but I don’t recall if PHW is paid on Taft Hartley (I doubt it but I don’t know for sure) Residuals are a percentage of a films gross (with a couple exceptions ). So there is a lump amount paid for residuals, which then is allocated among the SAG actors. If you have a foreign film or ULB film where there are SAG and Non-SAG actors, there is a proration and residuals are only paid based on what the SAG actors are entitled to. There is a formula to allocate residuals among the actors. The formula that uses each actors compensation (up to a cap .. that I believe is currently $235k) and the number of days they worked (up to cap, which I believe is 20 days). If not all the actors are SAG, then the amounts that would have been allocated to the non-sag actors reduces the total PHW owed. For example, assume that SAG residual rate is 5% and based on the formula half of this is for SAG actors and half is not. So only 2.5% would be paid in for residuals

Greg Answered:

In short, absolutely. You have a common misunderstanding. There is no law or other legal requirement on a producer that a production must be signatory to any guild. BUT, a SAG actor is, with a couple exceptions, NOT allowed to work for a non-SAG company, any where in the world. Same for DGA and WGA. So yes, you could do a non SAG film if you wanted to, and if you can get SAG actors to work on the film despite not being a SAG registered company, its not your problem it’s the actors (they can get fined by the union, suspended or even expelled..unless they have made what a special election that allows them to work on SAG and non-SAG films but SAG makes it very very hard on people to do this..even though its their constitutional right per a US supreme court decision…its called core btw).

Greg Answered:

The same rules apply since when you are shooting outside the US there are local actors who would not be SAG nor can they make them become SAG. If however, you shoot partially in the US and partial outside, and i have had this, all the people on the US shoot have to be SAG or become SAG (Taft hartley them). as for recasting, that depends on the contract you make with those actors. But those actors are subject to SAG rules, strike or not, so they could not work on the film if there is a strike.

Greg Answered:

Schedule F means the actor is paid $65k or more. Unless otherwise agree by the parties, it’s a flat fee, inclusive of all days/weeks worked, overtime, travel, rehearsal and post time. Rarely have I seen someone not agree to that, although they may ask for overages if you exceed a certain number of days. The only thing you cannot include in the fee, and its extra, are penalties. Such as forced call or meal penalties.

Greg Answered:

GR1 is for exactly this situation. You signup with SAG to cover the SAG actors. The foreign actors are not covered under SAG. That means they don’t have to be paid SAG minimums, PHW or residuals or follow SAG rules for the non-SAG actors. You will still need to report on the final cast list to SAG the non-SAG actors salary and days worked as there is a pro-ration for residuals between SAG and non-SAG actors based on a formula. The formula uses the days worked and salary, up to certain caps, to allocate how much residuals go to the SAG actors. As for your foreign citizen but US resident, unless this actor is a member of the local actors union in the country you are shooting in, SAG will insist (and the actor likely too), that they be treated as SAG.

Greg Answered:

As with any deal, ultimately substance over form prevails. So simply calling the additional comp to an actor won’t work. SAG has a right to audit your final film cost to make sure you stayed within the ULB limits. In fact, you have to send over your final cost report. As part of that review, and the pension audits which they do, they look for actors being paid additional money not called acting salary so as to avoid PHW on those wages. More than likely the guilds will see it, question it, and hit you up for the PHW on it plus interest and penalties. The exception would be if the actor was truly providing other services on the picture (such as an actor who is also the director, or who truly is producing because they pulled the project together). EP fees, co producer fees, and publicity fees are all things that they normally are going to treat as additional compensation for the actor, but named something else to avoid PHW

Greg Answered:

Typically in this situation you either do an development investment agreement or have them as a member of the LLC. since you don’t want the latter in your scenario, then do the investment agreement. Essentially it says they invest $10,000 for development , and are repaid the $10k, plus a premium (norm is 50% but I have seen people go as low as 20%) from the production financing prior to or by the start of principal . Development investors also get a profit share and credit. typical profit share ranges for 2-5%. And an EP credit. Not following your comment about muddling the two as they are intermixed given the development person is investing in the film. Also, many times development investors are given the option to leave their money and premium in the film as an investment in the film like all other film investors (so if they invest $10k and have a 50% premium, they would be deemed to invest $15K in the film, and get their 2-5% development profit share, plus a share as an investor in the film itself.

Greg Answered:

All compensation paid is subject to PHW contributions (even residuals). So this includes contingent comp. (i tried to find the SAG guidelines on this but found the WGA one and all the guilds are the same.) https://www.wgaplans.org/contributions/forms/Employer_Contribution_Reporting_Guide.pdf that said, i dont know of many productions paying PHW on the profit participations, but then few hit profit participations. Keep in mind that there are caps on the contributions so many highly paid actors would not have PHW paid on their profit participations. its possible the guilds are waking up to this and starting to enforce it. How they knew you paid the profits is what i would find interesting to know

Greg Answered:

First, there is no law that says you have to hire SAG members, or if you do hire them, have to be a SAG signatory. Its only a SAG rule that their members NOT work for a non-SAG company or else they can get fined, suspended or expelled from SAG. (there is an exception for foreign shoots where the actors live outside of the US but are also members of SAG). So it’s the members who insist you become a SAG signatory in order for them to work on the film. So the answer is, if you are not hiring SAG actors then you don’t need to become SAG . As for WGA, as a WGA member you are not supposed to sell your script or write to a non-WGA company (kind of like the SAG rule but with writers it does not matter where they are located). Normally you would want to form a single purpose company to protect yourself from liability in case something happened during the shoot that was not your own fault. So when you do form that new company you would be assigning the script so the company needs to be a WGA signatory. I don’t know the answer when you are making the film in your own name. More than likely you still need to do something as when you sell the film the script is sort of being sold with it. You will need to check with WGA on how to handle this if you are not forming a company but doing the film personally in your own name.

Greg Answered:

You are not going to get those reports. No one shares them and they are confidential. And comparing films is never that easy. First, times change. If a film did $1 million on DVD 5 years ago, it might be $50,000 now. second, once someone pitched a film to me and said its just like Pulp Fiction…to which I replied, oh, Tarantino is directing. And Travolta, Uma and sam Jackson starring . and they said..of course not.. then I said its not similar. Streamer prices range from $50,000 or less to $10 million or more. there are a lot of factors and budget is not one of them. it depends on the genre, who is in it, the director, how well the film turns out, other competing films at the time. etc. The other issue is , you are selling to the distributor. Not the consumer. And generally you are only going to see what they pay you up front, regardless of how well the film ultimately does at the box office, VOD etc. A sales agent is a good choice to get an idea what they think the film can bring on sales to distributors around the world based on your cast, script , budget etc.. They will prepare something called and ask/take price list. Look only at the takes. In my experience, a film likely will get around 70% of the takes. Some will be higher then the take price, some lower and some wont sell at all. Hence about 70%.