SAG Re-Works Their Ultra-low Budget Agreement, And Shoots Themselves in the Face

SAG (short for the Screen Actors Guild) is one of those institutions that as a no-budget filmmaker, you have to learn to deal with. For most of us, that means to quickly accept that you’re going to be dealing with them and then manage the problem. They made great strides in working with smaller-budget filmmakers some 15 years ago when they got rid of their two low-budget contracts—the Experimental Agreement and the Limited Exhibition Agreement—and replaced them with the much-improved Ultra-Low Budget Agreement. For years I have been using this contract on most of my films and while it’s not necessarily cheap or easy to work with, there are ways to make it work more for you than against you.

I was surprised to learn, quite accidentally and with little fanfare, that SAG had completely reworked the ULB Agreement, coming out with the all-new UPA (Ultra-Low Budget Project Agreement) at the beginning of February. Perhaps they were waiting for a pandemic to release this new contract, to distract the industry and escape ridicule, because on first viewing, this contract sucks. And not just for producers like me, but also for actors who want to work freely. 

THE GOOD, THE BAD, AND THE (VERY) UGLY

I’ve read through the now 14 page agreement (previously 5 pages) that I found online and it is indeed, an all-new contract. Some nice things remain the same--the ability to work actors 6 or 7 days in a row without penalties, not having to pay for hold days if shooting locally, the ability to fly actors coach if shooting out of town, an increase in the budget cap from $250k to $300k--but there are other changes that I don’t quite understand. I’ve put a call into SAG Indie for clarification, but because of COVID-19, I haven’t heard from anyone yet. 

I’m not sure, for instance, if you have to put up a security deposit, though I have to imagine you still do. It’s not 100% clear you can use non-SAG actors and extras—an important distinction between this and the next agreement up (which has also been re-worked). From what I can tell, you can still work with non-SAG actors, though the agreement says that SAG is to be recognized as “the exclusive collective bargaining agent for Performers” and that the provisions of the UPA “are applicable to professional performers employed on the Project to the extent such Performers would be covered under the current Basic Agreement.” I interpret this as a re-worded way of saying what they’ve previously said—if you work with “professional” actors, even those not in the Union, SAG's provisions apply to them as well. I’ve always dealt with that idea by maintaining that my non-SAG actors were not “professional” (even if they had an acting resume and a manager, etc), and I’ve kept them off the books. I definitely want to get clarification on this provision because it’s so important. 

It also looks like there’s no more deferred Short Film agreement and that this UPA now rules over short films below the budget cap of $300,000, (but please don’t quote me on that just yet). That would be a huge blow to short films, if that’s true. (Again, I look forward to some clarification).

As far as exhibition, the big difference seems to me to be a “moving up” of residual payments. With the previous incarnation, if you got an initial release in theaters, (like DriverX got at the end of 2018), you did not owe residuals on the revenues received from that release. Residuals didn’t start counting until subsequent windows, like cable and internet TVOD, SVOD, TV, DVD, etc. Now it looks like with a few exceptions (film festivals, an Academy run, a “public access television” run), that you owe residuals on the initial and subsequent distribution windows. This might not seem like a big deal, since residuals seem like such small amounts (between 3.6% and 5.4% of revenues received, depending on the revenue stream and total revenue received). But when you consider how little the producer who owes that money is also receiving out of revenues, it’s a big percentage of the actual money you’re getting back from a distributor. 

AND HERE'S THE UGLY...

The big, big difference between this and the previous agreement, though, is crystal clear—the minimum day rate owed to actors is substantially higher. They’ve increased the rate from $125/day to $201/day (for an 8 hour or less day). That’s a whopping 61% increase! On a film like DriverX, where we had over 50 speaking parts, nearly all given to SAG actors, that would have cost us like $10,000 more. And of course, if you’re familiar with how SAG rates work, you know that $201 is not what you actually pay. If you work an actor who has an agent 12 hours, you will owe them $386.93. But wait, there’s more! Add in the 19% P&H (Pension and Health) and payroll expenses and you’re looking at something like $550/day. The least you’re likely to pay, if you work an actor who doesn’t have an agent, is something like $285/day. OUCH! 

This is a game changer, in a very bad way, for micro-budget films like the ones we want to make. It’s not clear to me why SAG thought this was necessary, other than they must have felt like people were taking advantage of their members with these contracts. But in my experience, and in the experience of my friends making low-budget indie films, no one is making guaranteed money from these projects except the actors. And then if you’re lucky enough to get any revenue back from your distributor, it’s the actors again who are getting paid.

There’s no question that actors are a critical part of a successful no-budget film. In my view, they are probably the most important part. But no one should be going into one of these films expecting to get rich. More likely, the people putting up the money (which often are the filmmakers themselves, or their friends and family), won’t get any money back at all. This looks like a money grab where there is no money to spare, and I have to imagine the net result of this change will be fewer SAG actors getting hired, which is bad for the actors, bad for the films and filmmakers, and ultimately bad for audiences. 

SUBSCRIBE TO THE NO-BUDGET REPORT

© 2020 Mark Stolaroff