The hard-fought SAG-AFTRA agreement with the studios is causing tension between actors and their representatives. A new provision aimed at providing clarity for actors on residual payments has created confusion among agents and managers. This has raised concerns that smaller agencies may be wiped out and up-and-coming actors will struggle to find representation.
At the center of the issue are advance paid residuals, which are a portion of a performer’s per-episode fee check that counts towards future residual payments.
Previously, pre-paid residuals were part of an actor’s initial compensation, negotiated by their agents. However, under the new agreement, all advance paid residuals will be delivered to the union for processing and forwarding to performers. This change has sparked controversy among talent agents who will no longer automatically receive commission on the initial payment they negotiated for their clients.
The potential 15% decrease in commissions for talent agents and managers comes at a difficult time, as they are already dealing with the impact of the production shutdown caused by the Hollywood strikes. This has left them feeling betrayed, as they stood by the actors during the strike but now feel overlooked by SAG-AFTRA.
The studios’ practice of bundling advance residual pay into episodic fees has long been a contentious issue. Instead of reflecting an actor’s value and rewarding their work, the episode fee includes a pre-payment for future residuals that have not yet been earned.
While the common sense solution would be to eliminate advance residuals and only start residual payments once a show starts reruns, the studios are unlikely to agree to this. Instead, SAG-AFTRA sought to bring clarity to performers on the issue.
The breakdown between initial compensation and residuals is clearly stated in actors’ contracts, but it is not always listed on the checks. This can lead to confusion for some actors. SAG-AFTRA handles all other actor residual payments, so performers may wonder why they are not receiving checks after their episodes air.
The upfront residuals will be processed in the same way as traditional post-run residuals, but agencies argue that they can process and send clients their checks much quicker than SAG-AFTRA due to the large volume of payments the union handles.
The strained relationship between SAG-AFTRA and the agencies is further exacerbated by the lack of a franchise agreement. The guild has not had a franchise agreement with the Association of Talent Agents since 2002. This adds to the animosity between the two parties.
There is concern about the impact the new rules will have on mid-size and small agencies. Smaller agencies rely solely on commissions, so any decrease in revenue could be detrimental to their survival. This could make it harder for up-and-coming actors to secure representation and for newcomers to find agents.
Overall, the SAG-AFTRA agreement with the studios has created tension and confusion among actors and their representatives. The new provision regarding residual payments has raised concerns about the future of smaller agencies and the ability of up-and-coming actors to find representation.
