SAG ULB guidelines, residuals, and due diligence

Sorry...double posted so deleting one

I produced my feature under the SAG ULB contract. I don't yet have distribution but there is NOT a non-profit requirement. My lead actors get 1 point each, above their regular pay, if the movie makes a profit.

Here's a short article on the subject
http://www.cgllpblog.com/2008/11/calculating-sag-results/

If you are going after an A list (or B list or even C list) actor, you will need a lawyer in order to get the contract done, because their manager is highly unlikely to negotiate the deal memo with you unless you have one. And that lawyer can give you good insight on this issue.

Ugh....

Well that was a disappointing reply, not only because you didn't have the experience I specifically asked for given the response I said I need for this, but you are also WRONG about the point you made.

Paragraph 1 of the Ultra Low Budget agreement says, in part:

“It, (the Ultra Low agreement) is not intended for pictures produced for television broadcast, cable use, video/DVD markets or otherwise produced primarily for commercial exploitation.”

Now, I don't know if "not intended" can be argued in court effectively against SAG lawyers. But that's why I'm asking for people who have ran the gammut of time with a film and KNOW how this plays out in the end.

SO, back to the drawing board. If anyone can offer insight, it's much appreciated.

I've also done a little more reading in the meantime, and am getting further conflicting information. Supposedly "distributor gross receipts" is what the distributor pays the producer for rights, and that in turn is what SAG bases it's calculations of residuals on. However, the article in question (http://www.easy-budget.com/articles/articles.asp?article=ultralow) mentions there have been many cases where a producer will OWE SAG money because the distributor ended up bringing in so much in revenues, that this overshadowed the amount initially paid to the producer. And it seems this dispute relates to whether or not a distributor assumption agreement is signed.

Ultimately, it sounds as though SAG wouldn't chase you down over $10M if they know you're worth $50K, but the question lingers.

I don't know what you're quoting, but it's not the ULB agreement. I have signed copies from every one of my SAG actors, and I just re-read it.

I think that might be the student film contract

Paragraph 1 of the ULB agreement says, and I quote:

Subject to SAG approval, the following shall apply to this agreement:
A. weekend premiums are waived.
B. consecutive employment requirement is waived provided scheduling of calls is subject to Performer's availability, except whle on overnight locations.
C. Daily overtime is payable and time and one half. No work is permitted in excess of 12 hours on any one day.

Here is the paragraph about exhibition and distribution:

"Producer shall have the right to exhibit the Picture theatrically. Should the initial release not be in the theatrical market, the picture shall remain a “theatrical motion picture” for all purposes of the Basic Agreement, as modified herein, and shall not be reclassified as a “Made for Pay” or “Free Television” motion picture. If the Picture is distributed outside of the theatrical market, residuals will be payable in accordance with General Provisions, Sections 5 and 5.2 and Sideletter 22 of the Basic Agreement."

Here is the Ultra low budget agreement

Thanks Directorik. What I was quoting from was the agreement that the actors signed, which back-stops what you posted.

I've made two ULB features that have received distribution. The first was acquired by a small distributor in an all rights deal and played theatrical in several cities in US and overseas too. It then went to dvd and even had a run on Showtime. Not one penny of residual has been paid to any actors, nor have I heard anything from SAG about it. This film came out in 2002. The second feature had a theatrical run in one city and is now on dvd here, and starting to sell territories overseas. Same situation as the first feature in regard to residuals. Nothing paid out and nobody seems to care.

Note the fact that nobody has received residual is not an attempt to cheat the actors (I actually acted in both films and would love to get residuals!). For the first film, we received a small advance from our distributor which was quickly spent on delivery costs. After that, you would think that the distributor would be the ones responsible for any residuals owed, but they are not because they did not agree to sign a Distribution Assumption Agreement which would officially make them responsible for residuals. We signed with them anyway because it was our only chance to get a theatrical run. So in theory my company that produced the film is still responsible for paying residuals on any sales that the distributors make. Crazy huh? But should SAG come after us I would just tell them we have no money. What else could I do? So if you ask me I would say don't let the fear of residuals keep you from making your film.

For the second film, we put it out ourselves for the theatrical run and for the dvd deal, I honestly don't even know if the distributor signed an Assumption Agreement as the deal was done through a sales agent who still has most of the paperwork. I guess I didn't ask because I didn't really care, having seen that non-payment of residuals for a small film is nothing to be worried about. And should SAG ask me about residuals on this film, it is the same thing as the first. We have no money left at the moment.

Regarding actors complaining to SAG on a small film, I guess that not many of them want to be "that guy" that causes trouble. I treated all the actors very well on both shoots, and when one considers that complaining to SAG might result in fewer opportunities of exposure for the film, is it really worth it?

I have a buddy who has produced close to 30 films in some capacity, including Sudance winners. He has been asked by SAG once or twice about residuals, but has pleaded poverty and he was left alone.

SAG ULB Theatrical Release Requirements

I'm glad to hear this about the residuals. We just got distribution for our Indie Film and because it has no stars and we played over 15 festivals already, we opted out of doing a theatrical release with our distributors. It just seems to be a costly endeavor for a film with no stars when we could just go straight to TV, DVD, VOD etc.
Now, all of a sudden our producer came up to us and said she thinks you are REQUIRED to do an initial Theatrical Release for the SAG ULB contract and that if you don't, you incur some sort of step up fees on the actors wages? Is this true?
Does anyone know definitively if you have to do this theatrical release first and what it actually saves you from? Because if it doesn't save us from anything, we'd prefer not to go out of pocket for a one week release that will just end up costing us money we absolutely don't have at this stage.

No, it's not required.
Go to www.sagindie.com
the contracts are all posted there.

mlesemann said:

No, it's not required.
Go to www.sagindie.com
the contracts are all posted there.

Click to expand...

I have read the contracts. The reason I am asking is because other filmmakers that had SAG ULB contracts and played the festival circuit with me this year all said that they HAD to have an initial theatrical release or they would have had to pay some sort of charges to SAG (not clear on exactly what charges, which is why I'm posting) I believe it has to do with this part of the contract:

4. Exhibition Rights

Producer shall have the right to exhibit the Picture theatrically. Should the initial release not be in

the theatrical market, the picture shall remain a “theatrical motion picture” for all purposes of the

Basic Agreement, as modified herein, and shall not be reclassified as a “Made for Pay” or “Free

Television” motion picture. If the Picture is distributed outside of the theatrical market, residuals

will be payable in accordance with General Provisions, Sections 5 and 5.2 and Sideletter 22 of the Basic Agreement.

I think that they are referring to the part that says "all purposes of the basic agreement" which I think means that if you DO NOT have your initial release in a theater, you must pay the SAG actors the rate/day they worked they would have gotten in the BASIC agreement as opposed to the $100/day they got with the ULB agreement.
I also have calls in to SAG, but they have a problem with calling back.

Obviously, with this many producers saying they paid out of pocket for a one week run at the Arena Theater in Hollywood to avoid a ULB problem with SAG, there must be something to it.

Don't have any specific experience with this, but the way that is worded sounds to me like they're saying it's a "theatrical motion picture" regardless of whether you actually release it theatrically. It's not saying the lack of a theatrical release changes the classification; the opposite, in fact - the classification may not be changed. So it doesn't really matter whether it actually ever hits a theater - it's always considered a "theatrical motion picture". So in your situation it has no bearing on what you'll be liable for in terms of residuals.

BurtFarp said:

I think that they are referring to the part that says "all purposes of the basic agreement" which I think means that if you DO NOT have your initial release in a theater, you must pay the SAG actors the rate/day they worked they would have gotten in the BASIC agreement as opposed to the $100/day they got with the ULB agreement.

Click to expand...

You're missing the line after that - "as modified herein". ULB is a modification of the Basic agreement - they're not saying it reverts back to the standard Basic agreement, they're saying it remains a "theatrical motion picture" as defined in the Basic agreement which forms the basis for the ULB.

What IDOM said.
And yes, I've done the SAG ULB contract.

Reading over the basic agreement, here's what I see as the two relevant parts I'd be concerned about in your situation:

Section 1, Pictures Covered: It is not intended for pictures produced for television broadcast, cable use, video/DVD markets or otherwise produced primarily for commercial exploitation.

Section 4, Exhibition Rights: If the Picture is distributed outside of the theatrical market, residuals will be payable in accordance with General Provisions, Sections 5 and 5.2 and Sideletter 22 of the Basic Agreement.

In my reading of those two clauses they are saying the modified terms of this contract cover films exclusively for their theatrical distribution. ANY other commercial distribution beyond theatrical will require you to pay residuals in accordance with the Basic Agreement.

The other clause in Section 4 makes more sense in light of these two sections. What it's saying is that when you do distribute on VOD, or television, or whatever else (other than theatrical) you will be required to pay those residuals according to the schedule for a "theatrical motion picture" - you can't say "oh, well since we didn't release it theatrically it's really a 'Made for Pay' production" and therefore not subject to residuals that would normally be required for a theatrical film which is subsequently distributed non-theatrically.

In other words, no matter what you do you're responsible for residuals according to he schedule spelled out in the Basic Agreement if you distribute the film commercially in any manner other than theatrically.

Thanks DonnedOnMe

ItDonnedOnMe said:

Reading over the basic agreement, here's what I see as the two relevant parts I'd be concerned about in your situation:

Section 1, Pictures Covered: It is not intended for pictures produced for television broadcast, cable use, video/DVD markets or otherwise produced primarily for commercial exploitation.

Section 4, Exhibition Rights: If the Picture is distributed outside of the theatrical market, residuals will be payable in accordance with General Provisions, Sections 5 and 5.2 and Sideletter 22 of the Basic Agreement.

In my reading of those two clauses they are saying the modified terms of this contract cover films exclusively for their theatrical distribution. ANY other commercial distribution beyond theatrical will require you to pay residuals in accordance with the Basic Agreement.

The other clause in Section 4 makes more sense in light of these two sections. What it's saying is that when you do distribute on VOD, or television, or whatever else (other than theatrical) you will be required to pay those residuals according to the schedule for a "theatrical motion picture" - you can't say "oh, well since we didn't release it theatrically it's really a 'Made for Pay' production" and therefore not subject to residuals that would normally be required for a theatrical film which is subsequently distributed non-theatrically.

In other words, no matter what you do you're responsible for residuals according to he schedule spelled out in the Basic Agreement if you distribute the film commercially in any manner other than theatrically.

Click to expand...

Thanks for this reply DonnedOnMe. That's how I interpreted this as well. It's amazing how many producers have no idea what is going on with this contract. I am still going to find out definitively from SAG (once they finally decide to call us back) and when I do, I will post here for sure. There are so many threads about this question.