I. INTRODUCTION

 A. THE STAR DEAL Really Shapes the Picture

 B. Triggers Financing, Distribution, and Release Date.

 C. THE STAR DEAL will determine how the Picture can be marketed, publicized, and promoted as a result of restrictions which may be placed on the use of the Actor’s image, photograph, and his or her TIME for publicity and promotion.

II. THE START DATE

 A. FIRST POINT OF NEGOTIATION other than the money is usually the window of the Actor’s availability or the START DATE.

 B. Coordinating the availability of other Stars is important -- and sometimes a difficult balancing act.

 C. The Actor’s rep will always want the start date locked down.

 D. The Producer’s representative wants the start date determined well in advance so there’s time for Pre-Production and Financing -- but also FLEXIBLE enough in case production is delayed

 E. Start date “approximately 2 weeks plus or minus June 1” is better than “on or about June 1, which is defined by the Screen Actors Guild as “1 day before or after” the date specified.

 F. The Priority of the project / Pre-existing commitments can sometimes be an issue -
It is very dangerous to agree that an Actor’s previous commitment on another  Picture will take precedent to yours.  The Bond Company generally will not allow it.

III. LOCATION / TRAVEL PLANS

 A. If location is 50 miles away from the Actor’s residence or more, you must pay: Per Diem ($53.00 per day MINIMUM) plus first class transportation and hotel must be paid for (usually a suite).

 B. In order to save money -- many times the producer will try to get the actor to agree that the deal is a “local hire” so no transportation and hotel are required.

 C. Additional perks that are negotiated include:

  1. Entertainment Expenses -- can add up to $1,500.00-$2,000.00 a week in addition to the minimum $53.00 per day.

 D. Publicity Expenses -- resist the negotiation of expenses and per diem for publicity as Producer may be contractually bound and Distributor may not pick up the tab.

  1. Leave that issue for a negotiation in good faith, when and if it happens.
2. Hopefully the Distributior will pick up the tab at that time.

IV. WORK PERIOD -- 3 BASIC TYPES

 A. Pre Production -- Rehearsals, Wardrobe Fittings, Photo and Recording Tests, Readings, Conferences , Publicity Stills, Make Up Tests, Hairdressing Tests.

  1. Generally Producers try to get this free and actors’ representatives resist.

 B. Production -- Principal Photography, Stunts (if any), Trick Shots, Publicity Stills, “Making of” Interviews.

 C. Post-Production -- Looping, Dubbing, Recording the Soundtrack, Additional Publicity and Promotional Services.

 D. Issues on How Much Time is being bought always come up.

  1. If you pay an actor $100,000 for five weeks of Principal Photography...
a. ...then does it include Rehearsal and Pre-Production for free? Or do you pay extra?
b. What about Post-Production Services? Retakes and Additional Scenes?

   c. Looping and Dubbing Scenes? How much per day?

   d. What if you go over? What is the overtime payment provision? Do you pay $4,000.00 per day ($20,000.00 / 5)?... or do you pay $3,333.00 per day ($20,000.00 / 6)? For an indie production that $666 per day difference is important.

  2. Are the services consecutive? If they are non-consecutive is the actor paid during the break period?

V. COMPENSATION: THREE BASIC TYPES: CASH, DEFERRED, PROFITS

 A. Cash -- Discussed above; Don’t make a lowball offer. Make it reasonably consistent  with the Star’s Quotes, if at all possible.

  1. For example, if a Star gets $1 million for a 12 week Studio Shoot, but you only need him for three weeks, a legitimate offer at his rate would be $250,000 for three weeks (or his going rate of $83,333 per week.

  2. If the budget doesn’t support the Star’s Quote, make him a producer, executive producer, or co-producer, and give him an extra large profit participation so that he has a proprietary stake in the movie.
a.  Danny Glover got 1/3 of the profits on “To Sleep With Anger” and an     executive producer Credit.
b.  He worked for scale plus 10%.

  3. Another approach is to offer all actors a Favored Nations deal on the Cash compensation so that everyone feels that they’re part of the team.
a.  On a recent movie I worked on all the stars got Double Scale.

 B. Deferred Compensation -- Suppose that the Actor’s usual fee is $100,000 and you can only pay $50,000. The actor then agrees to defer $50,000. When is that $50,000 actually paid? Who pays it? How is it paid?

  1. Actors want the deferment guaranteed...(i.e. on a date certain -- with 18 months of the agreement) but this may not be possible...and it is dangerous...there may be no money from the distributor to pay it..

  2. The deferred amount is paid at a certain level of box office gross (i.e., $5 million in U.S. Box Office receipts...

   a. Again, you’ll have to get the Distributor to agree to pay it, or...

  3. The point at which the Picture is licensed to Cable TV, Home Video, or other media or markets. Again, this is dangerous as there is no guarantee that the money from that deal will be available...the Picture may be unrecouped or the deal may not provide enough money to pay the deferment.

  4. The most typical method -- Create a Pool of Deferments -- All deferments in the picture are placed in a ‘pool’ and at a safe point in time (i.e., when the producer has received 1.5 - 2.5 times the negative cost of the Picture) then the deferments kick in.

   a. The deferments are paid pro rata and pari passu -- meaning that if there are 3 deferments of 1) $50,000, 2) $25,000, and  3) $25,000, then for every dollar that comes into the pool , 1) gets 50 cents and 2) and 3) each get 25 cents.

 C. Profits/Percentage of Gross/Adjusted Gross Receipts/Net Profits

  1. Gross Points -- Pure Gross: Only the stars get it. There are still deductions for taxes, residuals , and dues trade organizations.

  2. More typical is Net or some definition of Adjusted Gross which is a variation of the following:

   a. From the Gross deduct:

    i. a 30%-40% Distribution Fee

    ii. The cost of Prints,  Advertising and other Distribution expenses     plus a 15% Advertising mark-up.

    iii. Negative Cost of the Picture, plus a 15%-25% overhead, plus

    iv. Interest on the Negative cost and sometimes Distribution      expenses.

    v. Gross Participations

    vi. Deferments

   b. Adjusted Gross -- may have a reduced Distribution Fee, no overhead, possibly no interest, no deferments.

   c. Net -- All the above deductions are taken off before you get to Net

VI. CREDIT -- There are considerable negotiation points on Credit

 A. There is usually an initial Jockeying for Position as to who gets first and subsequent positions in the credits.

  1. Many times credit provisions read, “...no less than 3rd position in the credits...” as you still may not know who all the stars are.

 B. Alphabetical Order can sometimes be the solution

 C. In Order of Appearance is sometimes a solution

 D. Size is an issue

  1. Size on screen -- Usually 100% of the title

  2. Size in Ads

   a. Artwork Title -- 25%-35% of the size of the artwork title

   b. Regular Billing Block Title -- 100% of the size of title

 E. Likeness Protection -- if any other actor has a likeness in the ad, the star wants it also.

 F. Sometimes in Certain Territories, like the Far East, the Credits may be Reversed as to the position to accommodate Star from that region (Gong Li, for example) in the Asian markets.

 G. Actors want Assurances that Distributors will comply with all ad requirements

 H. Exclusions are typically heavily negotiated, such as Group Ads, Trailers, One-sheets, Lobby Cards, Posters, Billboards, Record Album Jackets, Video Boxes, Small Newspaper Ads, Award, Nomination, Congratulatory Ads.

  1. Many times these exclusions are resisted. Stars usually never agree to such exclusions

  2. Sometimes you can agree that if anyone else gets credit in an “excluded ad” the particular actor will also be in the ad.

VII. STILL APPROVALS -- Stills are an extremely important tool for the Marketing and Distribution process. (advice to producers: Don’t Skimp on Stills!)

 A. Stars are typically given the right to disapprove 50% of the Stills submitted to them

 B. Make sure that you take enough Stills with the actor alone so that you can get enough approved.

 C. In Stills of multiple actors shown together, the actor can usually kill only 25%-30% of the Stills submitted.

 D. Make sure that there is a specific, clear and orderly procedure for the Still approvals and if no disapproval is received within 3-5 days, then the Submitted Stills are deemed approved.

VIII. LIKENESS APPROVAL

 A. Stars will want any non photographic Likenesses created for the Picture. Many will want to receive the right to approve 100% of all Likenesses submitted.

 B. In other cases the star will be given at least 2-3 reviews of a likeness with an opportunity to reject certain elements and have them redrawn.

 C. A typical provision would require that once an actor approves the eyes, nose, mouth, lips, or other element of the Likeness, he or she can’t go back and disapprove them.

 D. Typically, these types of Approvals must take place in the 3-5 business day period.

IX. COMMERCIAL TIE-INS AND ENDORSEMENTS

 A. Actors’ representatives typically will not allow the Actor’s name or likeness to be used in connection with an endorsement of a commercial product or service without their consent.

X. DRESSING FACILITY

 A. Independent Producers generally can’t afford the lavish dressing facilities that Studios often provide, yet they certainly want the actors to be comfortable and happy.

 B. The typical star trailer has a, bed, shower, bathroom, and a living area, as well as  Satellite TV, VCR, Stereo, Cellular Telephone, and other amenities. You can’t afford them.

 C. Instead, Negotiate a provision that says that the Star will receive the best available dressing facility within the parameters of the budget.

 D. Put in a Clause that no other star will receive a more favorable dressing facility.

 E. Try to work out a deal where you can provide, if the budget permits, a trailer that is divided into 2, 3, or possibly 4 small but comfortable dressing facilities.

  a. This saves on equipment costs and also requires only 1 driver -- so it can save you a lot of cash on labor costs from your budget.

XI. HAIR MAKEUP AND WARDROBE -- are important because Actors are very concerned about their images onscreen.

 A. Stars generally like to have approval or at least meaningful consultation on the hair, wardrobe, and makeup personnel engaged on the Picture.

 B. Obviously, consultation on these matters is preferred over approval by Producers so that they don’t get forced to hire personnel they might not like or can’t afford.

 C. Approvals, if given, should be subject to the financial parameters set forth in the budget of the Picture.

XII. DOUBLES, DUBBING, OUTTAKES, NUDITY -- Since Actors try to control the manner in which their image is portrayed, these issues are also customarily negotiated.

 A. Actors try to get approval over the use of a body double, particularly when any nudity is involved.

 B. Strict controls on the use of nudity in films has been codified by SAG

  1. There must be written consent for any nudity.

  2. There must be a closed set with only essential personnel present

  3. No outtakes of the Nude Scene can be used.

  4. No photographers or journalists can be present during the filming of the scene.

 C. Dubbing -- Actors usually require that they have the first opportunity to dub their voice in English.

  1. Some international Stars whose first language is not English also require that they have right of first refusal to perform any dubbing in their native language.

 D. Outtakes -- Actors generally want to restrict any use of outtakes of footage not used in the film.

XIII. MERCHANDISING/SOUNDTRACK -- Toys, T-shirts, Greeting Cards, Clothing, Record Albums: These items can be big business --

 A. Sometimes this revenue can be more than the theatrical revenue of the movie itself (Batman, ET, and Jurassic Park are examples).

 B. Actors customarily try to get a separate piece of the action on this revenue stream.

 C. The royalties for actors range from the 5%-15% of Net Revenue. Big Stars (like Jack Nicholson on Batman) can sometimes command a gross merchandising participation.

  1. Net Revenue is usually gross receipts less a 50% distribution fee plus expenses

 D. Merchandising royalties are typically limited to those items where the Actor’s images appear and not those items that simply list the billing block credits or the title of the movie.

 E. Soundtrack Album Royalties -- are also customarily negotiated where an actor’s voice is used on a soundtrack album. The royalty is usually in the 2%-5% of wholesale price range, pro-rated for the amount of time that the artist appears on the soundtrack album. So if the Artist’s voice is on 1/2 of the tracks, the Artist would then get 1/2 of the royalty.

XIV. ASSISTANT, NANNY, GYM, SECURITY PERSONNEL

 A. These are perks which are usually accouterments which Stars are accustomed to on studio deals and have to be dealt with up front.

 B. Since these extravagances are rarely available on indie productions, its a good idea up front to make it clear whether or not these amenities are available and can be accommodated in the budget of the Picture.

 C. You don’t want an unhappy Star on your hands, so make sure the deal is clear on these points before the star arrives on the set.

XVI. PREVIEWS/PREMIERES

 A. Stars are typically negotiating provisions regarding invitations (including travel and expenses) to premieres -- both European and North American -- as well as all film festivals and previews.

 B. Since these are expensive items that the producer can’t control or afford, it’s important to make these types of commitments subject to the distributor’s approval.

XVII. OTHER MATTERS

 A. Free Videodisk, Laser Disc, Videocassette, 35mm Print

  1. All must be given, if at all subject to Producer’s and Distributor’s anti-piracy, private use only agreement.

  2. Generally one copy of each media as requested.

 B. Free Tax Indemnity -- When a foreign country withholds taxes from payments made in the territory, the actor customarily asks for an indemnity by the Producers for tax withholdings

  1. Since the Producer rarely has the money to cover this indemnity, The Producer must go to the distributor network or other Financier to cover this obligation or resist it altogether.
2. This is easily given and doesn’t cost anything.

 C. Insurance

  1. The actor will typically ask to be covered on the Producer’s Errors and Omissions and General Liability policy and wants a Certificate of Insurance providing such coverage.

XVIII. CONCLUSION -- Negotiating the Actor’s Deal is a real specialty that requires substantial  knowledge and experience in the filmmaking process. Hidden mistakes in the deal can cost a lot of money later on. Don’t do this alone: get some experienced help either from an experienced producer, producer’s rep, or an entertainment attorney.