INTRODUCTION

Whether you’re a studio executive, an independent producer, an agent, lawyer, or manager, or an international sales executive, making the star deal is perhaps one of the most crucial negotiations in the financing and production of a motion picture. More and more in today’s name-driven marketplace, closing a deal with a star has become the critical step toward getting a film into production. This is primarily because the star commitment -- with all of its accompanying visibility, hype, promotional and world wide market value along with the various and sundry press releases -- can be the trigger that sets the financing and the production in motion. The terms and conditions of the star deal can be the determining factors in obtaining a commitment to finance a picture, the ultimate greenlighting of a picture, as well as the release date of the picture, and in shaping how and to whom the picture will be marketed, distributed, and promoted.

Since the star deal and perhaps the director deal are the key creative components in getting studios, distributors and financiers to commit to production, the parties on all sides of the table are acutely cognizant that the outcome of the negotiation will weigh heavily on whether or not the particular film gets made. An additional issue that weighs heavily in the negotiation process is the fact that the actor is the only creative element that appears in front of the camera and on the screen as well as in the advertising, promotion, marketing, and publicity materials. Additionally, the star is generally expected to be the individual who will travel all over the world in support of the picture’s release. Like it or not, the star is invariably the “face” of the movie.

Accordingly, much of the negotiation has to do with the manner the actor’s name, likeness, image, and photograph are marketed and sold, as well as what the star’s rights and responsibilities are after shooting has concluded. Also of note to producers are the restrictions the actor and his representatives may place on the use of the footage and other images of the actor taken in connection with the picture.

START DATE
Of course, the budget, schedule and the general atmosphere of the production can fluctuate dramatically depending on that initial commitment from a star. And naturally, the schedule of a star actor has constant and continuous demand for changes. As such, the producer is constantly looking for that sweet spot on the calendar when production can commence without rocking the star’s schedule of personal appearances, charity events, family commitments and other acting assignments.

Since the star has so many demands on his time -- and yet all the star has to sell is his time --considerable negotiation goes into the setting of an actual start date for the commencement of the actor’s services. Where there are two, three, or more than four stars in a movie who all have to appear in the same scene, setting a start date and a definitive schedule for a movie can become a virtual juggling act. From the independent producer’s point of view, the start date has to be significantly determined in advance, so as to insure that all of the financing, investment, bank loans, distribution deals, insurance policies, and other key components of the financing arrangements have been concluded and the production can actually meet its cash flow schedule. Producers want the start dates to be as flexible as possible, many times wanting the start date to commence on  “approximately” a given date or within two weeks before or after a particular date.

Obviously, an actor’s representative will want the start date to be locked down and definitive, so that the actor can schedule additional work, vacation or other commitments before or after the shoot as tightly as possibly. However, the world of independent production rarely allows this kind of chronological precision. One can only hope that the material is of such a high quality that an actor will gladly suspend his vacation or other personal business to star in the film.

As such, many deals specify that the start date will be “on or about” a certain date. The Screen Actors Guild Basic Agreement has codified “on or about” to mean one day before or after the specified date. Unless an independent producer is absolutely certain of his start date, he should avoid specifying the “on or about” start date until he is absolutely certain he is proceeding with that particular actor and the production of the picture.

Sometimes the star will have a pre-existing, overlapping commitment to another, larger or studio film, and the star’s representatives will likely not let you forget this. In this case, the star’s reps will demand language in the contract that reflects that pre-existing contractual requirements will take a priority over the work on the project currently being negotiated.  The sudden and temporary departure of your lead actor is something  a producer will want to carefully schedule around and protect against in the language of the contract.

LOCATION OF SERVICES/TRAVEL PERKS
The location of the services to be performed is an important issue in the negotiation of an actor’s agreement -- particularly when the location is outside of the radius of fifty miles from an actor’s principal place of residence. If the location is beyond that radius, then the production will be required to budget for and pay travel, lodging, and per diem expenses for each day that the actor is required to be away form his or her principal place of residence. The Screen Actor’s Guild provides as a minimum fifty three dollars for per diem for an actor in SAG feature. Additionally, the actor must be furnished with first class transportation, if available, and hotel accommodations. In the star deal, usually more than one first class airline ticket will be required. The star will also generally require a first class suite in a hotel and anywhere from two thousand to four thousand dollars a week in additional reimbursements, for meals, entertainment, and other incidental expenses while on location. Stars will also require an exclusive car and driver to take them to and from the set and to and from the airport. These expense provisions may also apply not only during production, but if the actor is required to travel in connection with any re-shoots, and the looping and dubbing of the picture.

The actor’s representative will also attempt to negotiate similar expense reimbursement provisions to apply to travel in connection with the marketing and publicity of the picture. It is generally dangerous to commit to those reimbursement provisions up front, as the independent producer will often be at the mercy of whatever distributor picks up the film, and decisions about premieres, festivals and other important publicity and marketing matters are often made by the marketing department of the distributor and therefore out of the producer’s hands. This potential conflict is many times solved by including a provision in the agreement stating that the actor will be reimbursed for those expenses on the terms to be negotiated in good faith at the time the actor is required to travel for marketing and publicity.

It is significant to note that particularly since the actor is not being paid a salary for marketing and promoting the film per se (other than perhaps the profit participation, if any, that the actor may later receive), it is generally understood by distributors that if they want the star to travel they are going to have to make an offer the star will not want to refuse. Hence the often amusingly luxurious surroundings and perks of the typical movie press junket with which stars and journalists alike are provided.

Where the actor maintains a residence remotely near the location, in order to meet the demands of the lower budgeted production, many times the actor and producer will informally agree that the actor will not receive hotel and per diem on the picture, and will be deemed based in the city where the production is taking place. In these cases, passion for the material, not personal wealth, is the motivating factor.

THE WORK PERIOD
The work period is generally divided into three classifications of work to be performed. The first is the pre-production period where the actor may be required to participate in rehearsals, wardrobe fittings, hair-dressing and makeup tests, photographic and recording tests, readings, conferences, publicity stills, and interviews. The second is the production services period which generally includes acting services during principal photography, as well as any stunts, trick shots, singing, playing musical instruments and other services required to be performed in the actor’s role in the picture, as well as appearing in documentary or “making of” featurettes and the electronic press kit which may be used to help promote the picture in conjunction with its release. Depending on the contract and the negotiation of the terms, production services may also include services performed during re-takes and added scenes, which are required after the completion of scheduled principal photography. The third classification is the post-production services period which generally include services required for looping, dubbing, recording of the soundtrack, and additional services which may be required for trailers and foreign versions as well as publicity services.  In some agreements, retakes, added scenes, and trick charts are included in the post-production section of the contract.

A typical star deal will be negotiated to include a flat-fee i.e. $1,000,000.00 (one million) for a specified period of pre-production i.e. two weeks of rehearsal, wardrobe fittings, make up and hair appointments; ten weeks of principal photography, plus two additional “free weeks” (in the event principal photography is extended or the actor services are required for a period of time longer than anticipated), and 3-5 “free” looping, dubbing, and post-production days.  The finer points of the negotiation will deal with what happens if the services required of the actor go beyond the contracted period during principal photography and what will each day of overage services cost.  In our example above, will an overage day cost $100,000.00 (one million divided by ten weeks) or $83,333.00 (one million divided by 12 weeks)?  Additionally, if the Producer needs the services of the actor beyond five days of looping and dubbing, will the Producer have to pay the actor $83,333.00 a day, or will the actor do those additional days at SAG scale?  If the actor travels, will the travel day or days be included in the compensation package, or will they be treated as extra work days and paid at the full rate?  Will the services required of the actor be “consecutive” work days or weeks or can they be “non-consecutive” or split up?  Can there be a gap between the pre-production / rehearsal period and the production period, or must the actor be paid for any interim period between the  pre-production / rehearsal period and the production period?  All of these points will be specifically delineated in the contract so that presumably there will be no misunderstanding as to exactly how much the actor will be paid for what services are rendered.

COMPENSATION: CASH, DEFERRED, PROFITS
There are generally three types of compensation that are payable to actors: (1) the cash up front compensation discussed above, (2) deferred compensation, (3) and profit participation.  Many times when an actor wants to do a part and has an existing quote for his services for a picture, yet the budget does not support that quote, and actor will be amenable to deferring a portion of his compensation.  For example, if the actor’s quote is $1,000,000.00 and the budget supports $750,000.00  in cash compensation, the actor may agree to defer the $250,000.00.  A considerable degree of negotiation centers around the definition of the point at which the deferred compensation is payable and how it is paid.  The best position for an actor is that the deferment is guaranteed at a certain point in time i.e. one year from the completion  of principal photography, one year from the initial release of the movie.  This is a dangerous position for a independent producer to be in unless he knows that a studio or distributor will honor the contractual commitment for the deferment up-front.  Other methods of calculating and paying a deferment include the point in time when the picture reaches a certain level of U.S. box-office receipts as reported in Daily Variety or the Hollywood Reporter (i.e. $10,000,000.00). This is also risky as the picture may generate a certain level in box-office gross, but the cost  in print and ads and the deduction of the theater owners’ percentage and the distributors’ percentage may not result in sufficient revenues back to the Producer to pay the deferment.  Accordingly the deferment based on U.S. box-office gross should be set at a point sufficiently high to allow for the revenue back to the Producer necessary to pay the deferment.  Another method of paying the deferment would be the point in time the picture is licensed to cable television, network television or into video distribution. Again, these provisions can be dangerous, as the independent producer may not generate sufficient revenue from those licenses to pay the deferment.

A more typical way of defining the point in time at which the deferment is paid is a scenario in which a “pool” of money is available for all deferred players, and that pool is divided up and paid among all the deferred players on a pro rata and pari passu basis. Of course, all of this is subject to negotiation, but the definition may provide that the deferment pool will start to be paid when the producer has received somewhere in the range of 1.5-2.5 times the negative cost of the picture. From the producer’s point of view, this is a safer position, in that all of the distribution fees and the print, ad, and marketing costs will have been recouped prior to the payment of the deferred compensation pool. It is also important to understand that the term ‘pari passu and pro rata’ means that if there are four deferments included in the pool -- say, one for $250,000.00, one for $150,000.00, and one for $100,000.00, then for each dollar that comes in to the deferred pool, the actual payments will be divided in the same ratio as the amount of the deferments, (i.e., 50%, 30% and 20%) respectively. Perhaps the most typical method of defining the point at which the deferment is paid is to make all deferments payable pro rata and pari passu at the point immediately prior to the payment of any net profits.

The third type of compensation payable to actors are profits measured as a percentage of the gross receipts, the adjusted gross receipts, or the net profits. Pure gross receipts participations are rarely paid, and are often mythologized on the front pages of the trades by the A-List stars and select, top-tier directors who can demand the so-called “first dollar gross.”  Of course, even the biggest stars who get these “gross points,” have to cope with some deductions -- like taxes, trade association dues, residuals and similar small deductions. Still, on a blockbuster, the payoff can be enormous. In what may be a trend-setting deal, both Steven Spielberg and Tom Hanks gave up customary up front monies on “Saving Private Ryan” in order to each respectively take home a reported 20%+ piece of the first dollar gross receipts. While this lessened for the studios the short term pain of an inflated budget, by the same token this arrangement instantly carves a huge chunk of the profits away from the picture the moment the revenue begins to flow.

Adjusted Gross Receipts definitions are a more typical profit definition,  where a star may receive a percentage of the gross after the deduction of a reduced distribution fee (i.e. reduced from, as an example, 35% down to 15 or 20%), the deduction of some or all of the prints, advertising, and marketing expenses, and perhaps a portion of the negative cost of the film. Net profits, or as some studios call them, “Defined Proceeds” are profit participations that are payable after the studio has deducted its customary 30%-40% distribution fee, all of any gross or adjusted gross participations, all of the deferments, all of the costs of marketing and distributing the motion picture, plus advertising overhead on top of that number of somewhere between ten and fifteen percent, plus the negative cost of the picture plus an overhead figure on top of that of anywhere from ten to twenty five percent, plus interest on the negative cost and sometimes on the print and advertising costs as well.

After all these deductions, it is understandable why “perceived” hit films like “Coming to America,” “Home Alone,” “Forest Gump” have reportedly never paid any net profit participations because the domestic and international distribution fees, gross participations, the advertising and marketing costs, the negative cost, and the interest will forever prolong the point at which net profits or defined proceeds are payable.

Where there are several key players and a high profile director and producer involved, many times the specifics of these negotiations will be avoided by tying a particular star’s definition of Net Profits or Defined Proceeds to the most favorable profit accorded any person or entity in connection with the motion picture.

CREDIT
A considerable amount of negotiation centers around credit issues. Stars want to make sure that their credit is generally above or before the title, and on a separate card on the screen. Depending on the nature and extent of the role and the stature of the star, early on in the casting process, there will usually be some jockeying for position as to which star’s name appears in the first position. Particularly in an ensemble cast where a  number of prominent stars or name actors are included in the cast, and there is not one predominant role, the cast positions will be settled on the basis of the credits appearing in alphabetical order. Sometimes if the alphabetical order scenario does not work, for political or other reasons, the credits will be listed in order of appearance.

The next important issue will be the size of the credit. Stars will want their credit to be at least one hundred percent of the size of the title of the picture, including width, thickness, height, and boldness as factors. They will also want to be listed in the artwork title of the picture, usually in a size no less than 25-30 % of the size of the artwork title. Stars will also want protection in the advertising and promotion of the picture such that if any other star’s likeness appears in the advertising then this star’s likeness will also appear and that the star’s likeness will be no smaller than any other star’s likeness. The same type of protection is usually required for the size of the artwork credit accorded to the star.

Sometimes, when a there is a big star from a particular territory, such as, for example, Gong Li, from China, a special credit provision will be arranged for the Far East territories such that the particular artist will receive a more favorable credit in those specific territories in which she is popular, whereas, in the rest of the world the credits may or will be configured in a different manner.

Stars will also want to have assurances that all distributors are contractually required to meet all credit obligations on a worldwide basis, and a failure to credit in a proper manner will be promptly cured.

While representatives for stars spend a considerable amount of time negotiating the credit provisions, producers also want to be sure that they actually have the right to use the artist’s name, likeness, photograph, image, and biography to the maximum extent possible in the exploitation of the picture. At the same time they also understand that distributors have restrictions on the size of the advertisements in which they can actually accord credits. As a result, over the years the distributors have developed a number of exclusions where customarily the credits need not be given. Some of these exclusions include such advertising as teasers, group and list advertising and publicity, trailers, sometimes radio and television advertising. Also among possible exclusions are posters and certain other types of advertising  including so-called ‘24-Sheets,’ ‘7-Sheets,’ 6-Sheets,’ ‘30x40’s’ and ‘40x60’s,’ as well as exclusions for merchandising items, point-of-purchase displays, lobby cards, record album jackets (if allowed), video box jackets, as well as and other packaging or advertising of eight column inches or less, as well as film festival and film market listings and award, nomination, or congratulatory advertising lauding a particular person who is not the actor to whom the contract actually pertains.

In the star deal, these exclusions are also heavily negotiated and usually cut down to a bare minimum. It is typical for a star to have a provision that if any other star is included in an excluded ad, so will the star, except in the case of award, nomination, and congratulatory ads.

STILL APPROVALS
While stars need and want to have their names, photographs, and likenesses publicized in order to continue promoting their careers, they also need to control the nature and scope and use of their image -- whether that image be a picture, a portrait, a charicature, or even a computer-generated visual effect, in connection with a motion picture and the many ancillary avenues of exploitation that picture offers.

As a result of a newfound caution in this age of nude celebrities on the internet and fully computerized “actors” that live and breath like real-life monsters, ghosts, and bad guys; stars’ representatives very carefully negotiate the still and likeness rights -- often as vigorously as the negotiations for the cash and contingent compensation.

With respect to stills, stars are typically accorded the right to approve 50% of the still photographs submitted to the actor for use in connection with the promotion, marketing and publicity of the picture. When a star appears with one or more other persons in a still, generally, the star will be required to approve at least 65%-75% of the stills submitted. The approval process can take quite some time, so producers generally require that the approvals be exercised within five business days or, in the event of exigent circumstances, three business days. It is customary to include a clause providing that the failure to receive notice of disapproval will be deemed approval of the stills submitted.

LIKENESS APPROVAL
The star will also want the right to approve any non-photographic likenesses that are drawn, electronically manipulated or otherwise created for use in connection with the advertising, publicity, promotion and exploitation of the picture. The producer would be required to submit such likenesses for approval, generally within the five or three business day period. Many times those likenesses will not be approved, and generally what is built into likeness approval clauses is that the star will have the opportunity to review at least three different submissions of a likeness. Once an artist has -- for example -- approved the nose, hair, eyes and dimension as presented, then he would not be able to disapprove those items that had been previously approved.

COMMERCIAL TIE-INS AND ENDORSEMENTS
Another restriction that stars will want to place on their name, likeness and photograph will involve their use in connection with any commercial products, endorsements, or promotional tie-ins with restaurants, goods and services and the like. No such uses are generally allowed without the expressed written consent of the star, which generally may be refused for any reason.

DRESSING FACILITY
Negotiations for dressing facilities are notorious. Stars obviously want to be comfortable and have as many amenities and conveniences as possible while they are waiting to be photographed and preparing to perform. Trailers and dressing facilities come in numerous sizes, shapes, and degrees of luxury, and you can be sure that the star’s representative will be well versed in all of the ‘lingo’ on this count. The typical star dressing facility will be a large trailer while on location (and often, when at a studio sound stage, as most facilities no longer have the 40’s and 50’s-style dressing room buildings of the studio heyday). The trailer will be fully equipped with a bed, kitchen, shower, living area, satellite television, VCR, stereo, and cellular telephone. Many times the budget for a film will not be able to accommodate all of these amenities. As a result, a variation of these amenities are sometimes negotiated, or , a provision stating that the star will receive the best available dressing facility within  the parameters of the budget. Another provision customarily negotiated concerning dressing facilities in order to ensure equality on the set is a restriction stating that no other actor will receive a more favorable dressing facility than the particular actor.

Another issue that comes into play concerning dressing facilities is the condition that the dressing facility need not be shared with any other actor. Sometimes, large trailers are split in half in what are customarily and affectionately known as “two-bangers,” which provide separate facilities in each compartment but which only require one driver rather than two. This is a way of saving money and still providing a reasonably comfortable dressing facility.

On tighter budgets, stars will sometimes agree to use what is called a “honeywagon” where one driver will tow a trailer which includes three, four, or five rather small dressing facilities, again, saving on transportation costs. While stars generally do not prefer honeywagons, they will sometimes agree to them to accommodate the budget of the picture, provided, of course, that no other actor is provided with a more favorable dressing facility.

HAIR, MAKEUP, WARDROBE
Because a star’s image is so important, stars will often have provisions negotiated concerning hair and makeup personnel. This may include hiring the people that the star customarily uses to handle makeup and hair duties, and as a result will require specific and strict approvals of the hair and makeup persons engaged, subject to budgetary and availability issues.

Additionally, stars may require approvals over the wardrobe they are required to wear, and further require that they be allowed to keep any and all wardrobe purchased for their use in connection with the role they play. When a star has less leverage or when a production simply cannot afford it, another way to handle these issue is to provide the star with full and meaningful consultation in connection with the hair and makeup with the producer having the final say.

DOUBLES, DUBBING OUTTAKES, AND NUDITY
In order to further protect the star’s image, stars will generally require the approval of the use of a body double, unless the double has been engaged as a specialty or stunt performer. As with makeup and hair personnel, stars generally have doubles with whom they work regularly. Additionally, if the star’s voice is to be dubbed in his native language, then generally the star will require at least the first opportunity to perform any such dubbing. The dubbing issue becomes generally more important particularly when the star is multi-lingual. When the star is well known in a foreign territory and, for example, performs his role in English for the movie, he certainly would not want his voice dubbed by another actor in Spain if he were originally from Spain. With international co-productions becoming more prevalent, the dubbing issue has become a more important term in recent years.

Outtakes are sequences shot for the film which are not used in the final cut. Many stars now restrict the use of any outtakes for any reason without their prior written consent. Negotiations concerning nudity are a serious important concern among actors involving a series of rather extensive protections concerning the use of nude, sex, or simulated sex images; as a result a separate and extensive article on  the nudity issues by this author is available in a previous issue of MovieMaker Magazine (Issue #29).

MERCHANDISING/SOUNDTRACK ALBUM
Merchandising items such as toys, T-shirts, posters, clothing, greeting cards and the like, have become a major ancillary revenue source in the motion picture business. In many cases the revenue from such films as “E.T.,” “Batman,” “Jurrasic Park,” and “Titanic” can amount to hundreds of millions of dollars and can exceed the box office revenue. Stars are accustomed to participating in this merchandising revenue stream, where the stars’ photograph or likeness appear on specific merchandising items.

Stars’ participation in merchandising revenue can range from 5% to 15% of merchandising revenues after the deduction of various distribution fees and expenses. Merchandising distribution fees many times are negotiable but are customarily are in the 50% range. Similarly, when a star’s voice is used on a soundtrack album, either in dialogue or in a song, the star will typically negotiate a soundtrack album royalty for use in connection with the star’s voice on a soundtrack album.

ASSISTANT, NANNY, GYMNASIUM, SECURITY
Many stars have special needs that are also typically negotiated into a star’s agreement in order that their lifestyle particularly while on location is comfortable and they are ready to work without additional and unneeded distractions. Most stars typically negotiate to have a personal assistant on the payroll, mostly to meet their various business and creative needs. Additionally, stars with children will typically negotiate for the right to bring their children to the location at the expense of the production along with their nanny, housekeeper or baby-sitter. Since stars have to keep in shape, they many times will negotiate that a gym facility will be made available and a special exercycle or other special training needs are covered while on location, including a trainer. Major stars are concerned with their personal safety and security, and will typically negotiate provisions which allow the star’s security personnel to travel with the star and have their salaries covered by the production. Some stars also have special dietary needs and requirements, and can negotiate provisions concerning special food for on-set consumption and/or a cook, which is made available to the star while on location at the expense of the production.

PREMIERES AND PREVIEWS
A typical provision in the star deal will have the star and a companion being invited to the North American premiere screening of the film and perhaps the European premiere of the picture. Of course, these provisions invariably include provisions for first class transportation, accommodations and a per diem allowance. Many actor’s representatives are now negotiating provisions concerning the star not only being invited to the premiere but also to previews as well as film festival screenings of the picture.

VIDEOCASSETTE, VIDEODISC/DVD, 35 MM PRINT
A customary provision for stars includes a free copy of the picture on videocassette, videodisk/DVD, and laserdisc when same is commercially available, subject to the signing of an anti-piracy private use lending agreement. Major stars can sometimes negotiate as well for a free 35mm print of the picture, subject to the same anti-piracy and private use restrictions.

TAX MATTERS
When a star is required to travel to a distant location and is paid outside of the United States, many countries have tax a withholding statute which can significantly reduce the cash compensation payable to the star for services rendered in that particular territory. A relatively common provision in star agreements is a tax indemnity provision whereby the producer is required to cover or indemnify the star from any of those tax withholdings. The terms and conditions of such a tax indemnity are highly detailed, specialized, and require expert tax advice from international tax specialists.

INSURANCE MATTERS
Most star agreements have a provision which requires that the stars submit to a physical exam for insurance purposes. Generally the exam is provided by a doctor engaged by the productions’ insurance carrier or the producer. Of course, the star will also want to have his or her personal physician present during any such examination, in order explain or otherwise challenge any erroneous medical reports which may be furnished by the carrier-appointed physician. The star will also want a special provision in his or her agreement providing that in the event that the insurance carrier has a special exclusion or deductible or extra premium as a result of the star’s medical condition, that the star would be allowed to pay that additional premium, cover that deductible or otherwise deal with any insurance problems that may exist. Additionally, the star will want to be an additional insured on the Producer’s errors and omissions insurance and general liabilities insurance policies.

CONCLUSION
In the last several years, landing a star has become more important than ever for producers working outside of the studio system to finance a film. Once the star has accepted to take the role in principle, a delicate and intricate balancing act begins. The above set of guidelines should be helpful in the relentless give and take that is the  negotiation process for the star deal. With any independent picture, the collaborative, sometimes scrappy  nature of a lower budget, the fiercely refined vision of the director and the screenplay he has chosen to film, and the seemingly unending mechanics of the contract negotiation can, if properly coordinated, result in a film that makes sense financially and is artistically and critically acclaimed. How the star -- and his deal -- fit into this apparatus is a challenge that only the most judicious producers meet with any regularity. Of course, consultation with an agent, manager or experienced entertainment attorney in making these deals is essential to avoid the many pitfalls and roadblocks that can ensue.