Receiving residuals is a big part of what motivates actors to take certain jobs. If you’re considering auditioning for commercials, here’s what you need to know about residuals.
Non-union commercials do not pay actors residuals. However, on union commercials, actors receive residuals in one of two ways. Under the traditional structure, residuals for commercials (called Use Fees) are paid to actors after the commercial has aired. Under the Alternate Compensation Structure, in addition to their session fee, actors receive a significant upfront fee that is designed to cover residuals.
In 2019 the SAG Commercials contract was updated to allow for two methods for compensating actors. “Lane 1” is the traditional method of payment that pays an initial session fee plus residuals after airing for 13 weeks. “Lane 2” is the Alternate Compensation Structure that provides for three methods of paying actors’ fees. Let’s take a closer look at these methods.
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Understanding The Traditional Compensation Structure (Lane 1)
Residuals are paid based on the type of commercial and the amount of the commercial’s use. There are multiple different types of use that pay in different ways. These types are as follows:
- Wild spots – Wild spot commercial are broadcast on individual non-interconnected broadcast stations. These commercials are paid by the unit. This means fees are calculated by adding up unit weights assigned to each cable network or media market based on the number of subscribers or television households. There are also minimum and maximum fee amounts set forth in the SAG Contract.
- Dealer A – A Type A Dealer Commercial is one made and paid for by the manufacturer or distributor of a product which is delivered to dealers of the product to use as a wild spot or Class B or C commercial. Residuals for actors in Dealer A commercials are the difference between the original session fee and the 6-month rate specified in the current SAG Commercials contract.
- Cable – Cable commercials are broadcast on cable networks. Actors are paid for cable commercials by the unit with a maximum amount as set in the current SAG Commercials contract.
- Class A, B, & C Network – Class A commercials are broadcast on major networks simultaneously in 21 + cities; Class B commercials are broadcast simultaneously in 6-20 cities; and Class C commercials are broadcast simultaneously in 1-5 cities. Actors are paid for each use in reducing amounts each time the commercial is run.
- Internet – There are two types of internet use addressed in the SAG contract: commercials initially made for television and subsequently used on the internet (“move overs”) and commercials made for use on the internet (“made fors”). Use fees paid for “move overs” are negotiated directly with the actor; however, there are minimum amounts that must be paid. Actors in “made for” commercials are paid a session fee at a minimum rate set forth in the SAG contract. Instead of the usual 13-week cycles, cycles are either 4-week, 8-week, or 1-year cycles.
In addition to residuals, Lane 1 provides other types of fees:
Session fees: The session fee is a fee paid to actors for each day of shooting. These fees encompass the first holding fee and the right to use the commercial for one cycle. A cycle is usually 13 weeks. Additional holding fees are due for each cycle thereafter until the maximum period of use is reached.
Lift fees: These fees are paid to actors whenever a producer “lifts” the actor’s footage onto a second commercial spot that the actor wasn’t original cast in. Lift fees are paid at the same rate as session fees.
Downgrade fees: These fees are paid when an actor’s face is out of focus or completely cut from the commercial. When this happens, an actor will not be entitled to residuals. The actor is still paid at the session fee rate, but cannot expect to receive any additional payments.
Holding fees: Actors are paid a holding fee to remain exclusive to a brand. This is done to avoid conflicts with the actor appearing in commercials for competing brands. The rate of the holding fee is the same as a single session fee which is paid every 13 weeks for as long as the producer chooses to hold the actor. Once the producer stops paying the holding fee, the actor is released from any conflicts with other brands.
Late fees: All residual payments are due 15 business days from the first date of the use of the ad. A late fee is due to an actor each day a payment is late after these 15 business days.
Understanding The Alternate Compensation Structure (Lane 2)
The Alternate Compensation Structure provides simplified use fee structures through 3 options. Under a Lane 2 deal, session fees are not credited, there are no holding fees paid to actors, and the maximum period of use is one year.
Upfront Plus The Upfront Plus option gives advertisers 10 Class A uses and an unlimited number of other types of uses. Each on-camera principal actor receives a session fee plus $20,000 for appearing under this option. Each off-camera principal receives $15,000 plus a session fee. After the 10 uses, actors get an additional $100 for each Class A use.
Upfront Flex: Advertisers pay $8,000 upfront per on-camera principal and $6,000 per off-camera principal, for one year of use. Advertisers pay $100 per Class A use. Advertisers pay a flat fee on 5 platforms: cable and local cable ($3400/cycle), wild spots and local cable ($2000/cycle), digital ($1300/cycle), Spanish language ($2000/cycle), and other domestic use ($1000/cycle). The uses are credited against the upfront fee until that fee is exhausted. Once the $8,000 fee is exhausted, actors get paid for the uses over that amount.
Upfront Digital: The Upfront Digital option gives advertisers unlimited digital uses. Digital platforms are internet, new media, and OTT (over-the-top). On-camera principal actors are paid a session fee plus $3,825. Off-camera principals are paid $2,868 plus a session fee.
Watch the video below for an explanation of Lane 2 (with examples).
Additional Fees SAG Commercials Actors Receive
- Mileage reimbursement. If actors drive outside the studio zone they should be reimbursed for their mileage. The studio zone is a set radius around a city that is established by SAG.
- Cleaning reimbursement. If actors are asked to use their own clothes for a shoot, they are entitled to receive reimbursement for their cleaning.
- Overtime. If actors work more than eight hours, they are eligible for overtime payments. Overtime is paid at time and one-half for the ninth and tenth hours and at double time for the eleventh and twelfth hours.
- Fittings. If actors are scheduled for a fitting on a non-shooting day, they should receive payment at an hourly rate.
How do you track commercial residuals?
Residuals for commercials are difficult to track because of the multiple cities and platforms commercials are shown on. A couple of basic tips for tracking residuals …
First, track the start of each 13-week cycle of your commercials. Second, whenever you see your commercial, make note of the date and television network. Finally, ask a few close friends and family members in different areas of the country to help you track by keeping a log of the dates when they saw the commercial and the networks the commercial was shown on.
Having this information may be helpful if there’s ever a dispute about the residuals you are owed.
Commercial residuals are mailed directly from payroll companies (usually Talent Partners), so they are not tracked by SAG on its Residuals Tracker. If you have a question about commercial residuals, SAG recommends you contact the Commercials Department at (323) 549-6858, or by email: email@example.com.
What is the SAG Social Media Waiver?
The Social Media Waiver (which now includes YouTube for an additional 15% of the session fee) allows producers to create an unlimited number of commercials from a shoot and pay only a session fee for the number of days of shooting. The use fee is paid every 30 days. If these spots are moved over to television or onto the internet, the standard principal rates and residuals will become effective.