Knowledge of Actors’ Issues Should be Producer’s Priority

Depending on the financial resources of your independent production company, you, as producer, may not have the benefit of being able to obtain
the assistance of an entertainment lawyer. Consequently, the following are some of the issues that you should take into account when negotiating with agents for your talent. (This article will focus solely on above-the-line cast for feature length motion pictures.)

In BC, regardless of whether you are employing Canadian or American actors on your picture, in most cases, you will have to become well-versed in the provisions of the 1999-2002 Union of British Columbia Performers Master Production Agreement ("UBCP Agreement").

Deal Memo
Normally, the deal memo, which first sets out the particular actor's deal, will be forwarded by the casting director or the producer to the actor's
agent. The deal memo should be as clear as possible, as many negotiations have gone astray when the agent or actor claimed that the long form actor's agreement did not contain the same terms as the deal memo or, worse, that the deal memo was misleading in some manner. Deal memos, at a minimum should contain the following: name of actor; name of production company; UBCP Production number; name, address, phone and fax number of the agent; the name of the actor's loan-out company, if any; the minimum compensation;the number of days or weeks worked (the "Guaranteed Period"); the daily or weekly rate; the declared use of the production (i.e., cable television, free television, theatrical, etc.); the buy-out (residual) provisions, including the amount of the buy-out and the number of years of the buy-out (see below); whether the actor is a minor (i.e. under 19 years of age); the name of the minor's guardian or parent; travel and accommodation; ground transportation; expenses (per diem); on-set accommodation, etc.

Depending on the "star power" of your actor, the agent may request any one or more of the following items. If your company, as a matter of policy,
agrees to such terms, they are called "gives". Each production company will also have deal terms to which it will not concede. At the end of the day, whether you will agree to certain demands will depend on your picture's budget and the cache of the actor you wish to employ. Assuming your actor carries some weight in the industry, the agent may ask for: a star trailer with full amenities (vs. a compartment in a double or triple banger"); exclusive ground transportation to and from sets and accommodations; use and payment of a cell phone; use of a rental car; approval over the producer's use of the actor's name, voice and likeness; stills (photo) approval rights (see below); inclusion of the actor's credit on paid
advertising and artwork for the picture; the right to have the first opportunity to dub in English; special nudity provisions; invitations and
transportation to the picture's premiere; the right to purchase the actor's wardrobe; the right to decline certain types of advertising (such as
tobacco, alcohol, firearms, intimate wear, geriatric products, etc.); a merchandising and/or soundtrack royalty (see below); contingent theatrical
compensation (see below). This list is by no means exhaustive, but will give you an idea of the number of issues astute agents may ask for on
behalf of their clients.

Once the deal memo has been agreed to by the agent, the casting director will then forward it to the producer or production counsel for preparation of the long form agreement.

Contract
Under the UBCP Agreement, the producer must provide the actor with a written contract. This can take the form of Appendix "E" to the UBCP
Agreement, a simple 2-3 page rider (which you would attach to Appendix "E") or a multi-page long form agreement. Whatever form of contract you use, make sure that the actor also gets Appendix "E". Below is a non-exhaustive list of some of the more esoteric and powerful mechanisms you, as producer, can employ in preparing long form actor's agreements.

Over-Scale Actors
If you are paying your actor less than 200% of scale (the minimum daily rate under the UBCP Agreement is $CDN500.0 per day), you will have the right to "credit" (or offset) the extent to which the actor's compensation is in excess of scale against the following items for which you would
normally have to pay additional fees: overtime; work on 6th and 7th days and encroachment on rest periods. If you are paying over 200% of scale, you may credit against all over-scale fees. This is an extremely powerful money saving mechanism for producers and is unique to the UBCP Agreement (crediting is not permitted under ACTRA agreements prevalent in the rest of Canada). Consequently, the actor's contract (if not the deal memo) must indicate that the producer will credit over-scale fees. If the contract does not so provide, you will lose the ability to offset.

Pre-Payment (Buy-Out) on Residuals
Under the UBCP Agreement, the producer has the option to pre-pay the actor for the right to use the proceeds of the actor's performance in certain ancillary markets. Normally, the producer will indicate on the actor's agreement that portion of the aggregate actor's fee which is attributable to the net fee or guarantee (for example, this could be 48.78% of the actor's total fee.) The producer may then indicate that 105% (for cable, free, and pay television) or 130% of the net fee (for theatrical) constitutes a prepayment or buyout of the certain other media in addition to the declared use of the picture. For example, in our case, we have declared the use of the production to be "theatrical". We therefore pay the actor 130% of his or her net fee at the same time the net fee is paid. The buy-out lasts for five years. Therefore, the producer does not have to keep track of residuals for at least five years. What many agents and actors don't realize is that the prepayment will entitle the producer to use the actor's performance world-wide in all of the following media: free TV; pay TV; cable TV; compact devices (i.e., videocassettes, laser discs, CD-ROMs, etc.) and educational programs. Many agents will attempt to negotiate additional fees for producer's use of the actor's performance in those media, but, as indicated, the producer has no obligation to do so.

Merchandising Royalty
Many agents will attempt to extract a royalty for their clients for use by the producer of the actor's name, voice and likeness for merchandising
purposes. If this is a "give" for your company, the usual formula is to provide a royalty of 5% of producer's "net merchandising receipts" when the
actor's name voice and likeness is used alone. The royalty may be reducible to 2.5% when used with other performers.

Stills (Photo) Approval
Some agents will demand that their clients have the right to approve a certain number of photographs used in connection with the exploitation of
the picture. Most producers will want the actor to approve 100% of the photos presented to him or her. In reality, the more likely formula
requires the actor to approve 75% of those photographs in which he or she appears alone and 50% of those in which he or she appears with others. The actor may be given one or more opportunities to deny approval (called "passes").

Contingent Theatrical Compensation
If the declared use of your production is cable, free or pay TV and it is anticipated that the picture may have a theatrical release either before or
after its broadcast on the relevant network, the agent may request that the actor receive additional compensation upon such theatrical release. Astute agents will ask for a formula based on 100/50/50 or more. Producers will want to give something less than that; for example 100/50/0. Using the latter formula, this would calculate as follows: if the picture receives a theatrical release (say, domestically) prior to broadcast on TV, the actor will receive an additional payment of 100% of his or her gross remuneration (fee for the picture). If the picture is released theatrically (again domestically) following TV broadcast, the actor will receive an additional fee of 50% of his or her fee. Finally, if the picture is released
theatrically in a foreign territory either before or after its initial TV broadcast, the actor would receive no additional compensation.
As one can see, there is a plethora of issues that an astute producer must keep in mind when negotiating actor's agreements. Producers behoove
themselves to become well-versed in the intricacies of the relevant collective agreement covering actors in their province. Remember, knowledge
is power.