What to Know About Commercial Contracts + How Much You Can Expect to Make

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Photo Source: Photo by Lê Minh from Pexels

You’ve always wanted to work in commercials, be the televised face of a national brand, and the opportunity has finally arrived! But before you sign any contracts—and definitely before you step foot on set—there are some rules you should know regarding commercial work. 

How to Get Cast in a Commercial + Read Your First Contract

If you’re union, it’s important to know what’s in your commercial contract and what type of contract you’re signing. This year, SAG-AFTRA approved new agreements, resulting in a few different options for commercial contracts: the traditional approach and a set of newer options—Upfront Use Packages—that reflect the changing face of advertising and media platforms (Upfront Use Plus, Upfront Use Flex, and Upfront Use Digital). 

As outlined by The Hollywood Reporter, the traditional approach includes an initial session fee and then handles subsequent payments periodically. The session fee “secures the right to use the commercial for a single ‘cycle,’ typically 13 weeks but sometimes extendable to 17 weeks.” If the client wants to continue using the commercial beyond the initial cycle, additional holding fees are due. The holding fee also “grants limited exclusivity” to the client but can’t stop you from appearing in commercials for noncompetitive products. (If the client did want to prevent you from doing so, additional exclusivity fees would be necessary.) Additionally, use fees (aka “residuals”) may be due based on the type of commercial and usage, though are dependent on the initial session fee. 

With the newer, ACS options, fees are prepaid in a lump sum that covers a stated range of uses. 

For an Upfront Plus contract, a guaranteed payment of $20,000 and a session fee allows advertisers to use a spot on all types of media for one year, to be paid within 15 business days of first use or 60 days from production, whichever happens first. This contract covers the first 10 uses of the ad (assuming it’s Class A), after which you’re owed $100 for each additional use.  

When it comes to exclusivity, the standard is that an advertiser will not want you appearing in a commercial for a competitor (i.e. you do an ad for Coca Cola and are therefore barred from appearing in an ad for Pepsi). That will almost always be worked into a commercial contract. Things get a bit more complicated for non-competitive products as, in addition to a block on direct competitors, advertisers can also request, via contract, that you not appear in commercials for other subsets of products and therefore are required to pay you for potential loss of work. 

Coca Cola definitely does not want you advertising for Pepsi, but they also decide they also don’t want you as the face of a wireless provider. If agreed to, they would be required to pay an additional 25 percent of your fees for this non-competitor contract stipulation. If they also want to make sure you don’t show up in a commercial for a restaurant chain, that’s another 15 percent for a second non-competitive product. A third non-competitive product requires an additional 10 percent, and then 200 percent for anything beyond that.

Like an Upfront Plus contract, Upfront Flex requires a session fee and the same exclusivity rules. However, Upfront Flex features an $8,000 upfront payment for one year of use. If the advertiser places the commercial enough to go over the initial $8,000 fee, those appearances require additional payments. 

For Upfront Digital contracts, advertisers can use spot-on digital media for a flat $3,825 plus a session fee. With this type of contract, there is no automatic exclusivity and if the advertiser wants to use the ad on a non-digital platform—like television—they must obtain the performer’s permission and pay.

Keep in mind that these are the basic, minimum contract requirements for union commercials. You are always free to try to negotiate. 

Ready? Check out Backstage’s commercial audition listings!

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and do not necessarily reflect the opinions of Backstage or its staff.