SAG or Non-SAG--That Is the Question? Six FilmmakersWorking Title:

The excitement of his 25-year-old dream was rushing Larry Fishman into an October production. His first film, "Zchlom," would skewer the New York City art world. It would also cost a lot of money. Too much to allow him to pay his actors. So Fishman did what most first-time filmmakers--and many independents--do: He hired non-union talent.

"It all boils down to money, really," he says. "I suppose I was limiting myself from a large group of people [union actors], but money was the main consideration."

Although the Screen Actors Guild offers low-budget agreements to motion picture producers, many independent filmmakers, like Fishman, employ non-union talent. In fact, after an in-house review of film festivals, SAG discovered "that only 20 to 25% [of the films submitted] seemed to be SAG," reports Ron Bennett, the union's executive administrator of theatre and television contracts. On Oct. 1, 1996, this fact prompted the guild to revise three of its five low-budget contracts: Experimental, Limited Exhibition, and Modified Low Budget. The other two low-budgets--Affirmative Action and standard Low Budget--and the Basic Theatrical (or "Codified") contract remained intact. Theoretically, the revisions have made guild members accessible to all filmmakers. Despite these options, the question remains: SAG or non-SAG?

SUB: Too Much Paperwork for Fishman

For many first-time filmmakers, like Fishman, the revised guild contracts are unsatisfactory. There exists an application process; corporate papers; legal documentation and contracts; an authorized copyright form; weekly time reports; restrictions on stunt work, nudity, animals, and children; potential financial penalties, and other expenses. Plus, after all, the deferments and residuals required under the contracts represent lost money for the investors and production companies.

Aware of the guild's contract revisions, and of the preparation required to meet them, Fishman concedes that several conditions contributed to his decision: First, he had not done efficient preproduction work, so he was unprepared to negotiate with SAG. Second, he was not able to complete in time a budget and other guild application requirements. Third, he would have needed to hire a lawyer or accountant to incorporate his production company. Fishman decided that these factors added up to no option but non-union actors for the short film he produced, co-wrote and directed, and starred in. Although he had waited since 1972, Fishman rushed into production.

"I did get information from SAG, but I was under a severe time constraint," he says. "As a first-time filmmaker, it seemed too cumbersome a procedure. They needed proof of copyright. I had time constraints because I didn't plan the production well enough to consider any SAG low-budget as an option. It was more a matter of me not being prepared than something inherently wrong with their contracts.

"I don't know enough about them to go on record criticizing them," he adds. "But the application did seem kind of cumbersome after a quick review. I think they [SAG] should make it a little less involved for people like myself."

Under the revised Experimental agreement, Fishman could have employed guild actors and deferred their entire salaries for his short comedic work. The new contract is applicable to films of any length, shot in 30 days or fewer, only in the United States, and with a budget of no more than $75,000. The union allows the producer to release the film to festivals, solicit further distribution, seek qualification for an Academy of Motion Pictures Arts and Sciences award (the Oscar), and show it on one public access channel for a year.

A theatrical release of "Zchlom" would require Fishman to negotiate with the actors for a rate equal to that required by the standard Low Budget contract. Those rates are $466 per daily performer, $1,620 for a weekly, and $99 daily for an extra. Singers and stuntpeople have higher rates. Also, an actor's residuals for profits gained from the ancillary markets of free television and pay cable are 7.2%. This rate is double that of the Low Budget, Affirmative Action, and Basic Theatrical contracts. For video cassettes and discs, the residual is 9% on each million dollars gained according to the distributor's gross receipts. This also is higher than the Low Budget, Affirmative Action, and Basic Theatrical contracts' 4.5% rate.

To Fishman, all of this seemed too complicated. Despite his impetuous approach, he completed his production on schedule, and is now in postproduction. Like many novice filmmakers, he hired non-union personnel as well as actors.

SUB: Saving With SAG

In contrast, independent producers Gibson Frazier and Adam Abraham employed union performers for their first feature film, "Johnny Twennies," a slapstick romance-comedy that recently wrapped production in Manhattan. As the star, Frazier felt obligated to SAG. He has been a member of the guild for three years. He and co-writer Abraham admit that other factors contributed to their decision, and even rationalize they will eventually save money. The film is under a Modified Low-Budget contract. Abraham is also the director. Robert Vaughn and Frank Gorshin have featured roles.

"We said from the beginning that if we do this film, we want to do it correctly," says Frazier. "Adam and I talked about saving money by not going SAG. But it just started feeling shady. This is a legitimate film and should be taken so."

How does Frazier believe they will save money under the Modified Low-Budget contract, which requires paying actors at least $248 a day and $864 a week?

"I think it saves money in the long run by hiring professionals who know what they're doing, instead of non-professionals who are getting their feet wet," he replies. "It comes down to the professional factor. They [SAG actors] will come in with their lines prepared. The little things like that. We won't be wasting time on set. Also there's a large volume of actors to choose from. I wouldn't be able to do the film myself, or get the actors we want, if we did it non-union. There was no other option for me."

SUB: More Indies Go With the Guild

SAG's Bennett attests that during the last year the five low-budget contracts have prompted more independent filmmakers to sign with the guild. "I know they've increased, especially the low-budgets--Limited Exhibition and Experimental," he says. "Yes, we certainly have felt the impact internally in terms of how many films have come in. As for film festivals, I don't know yet, because those contracts are too new for the films [produced under them] to have been entered."

The union has a lock on Hollywood productions. SAG represents almost all of the talent performing in U.S. theatrical productions with budgets above $2 million--the minimum needed to qualify for the Low Budget agreement. In contrast, the recent proliferation of independent films has fostered a substantial body of work for non-union--and some union--talent. Although the guild forbids its actors to work on non-union films, some do cross the line for the sake of creative, if not lucrative, experiences. (Still, in almost all instances, an established actor will not perform in a non-union motion picture.) A large pool exists of non-union actors, although it's not nearly as expansive as the ocean of guild performers. SAG made its significant revisions to the three low-budget contracts in an effort to corner the entire market.

First, the union upped the ceiling on the Modified Low-Budget agreement, from $300,000 to $500,000. Second, it raised the cap on an Experimental film to $75,000 and removed a limit on running time. Third, it reintroduced the use of the Limited Exhibition agreement--with a $200,000 budget cap--for films shot in Los Angeles. (The union had revoked the Limited Exhibition contract in the L.A. area six years ago because many producers there had abused contract restrictions on distribution.)

Each of these contracts (Modified Low-Budget, Experimental, and Limited Exhibition) offers benefits concerning consecutive employment, overtime, and payment for extras. Despite the concessions, under these three contracts, more than likely the guild will get back over time the equivalent of its basic theatrical rates in deferments and/or residuals during a signatory film's release period. The biggest boom to the independent filmmaker for signing a union contract is that it gives him the opportunity to cast, not only professional, but name talent--and that improves the motion picture's distribution chances.

Bennett believes the revisions make SAG "user-friendly." "It used to be that our agreements knocked people into the 'let's see what else we can do?' category," he says. "These agreements were created and altered to address the inflexibility that we couldn't address before. We want to give SAG members more of an opportunity to work. We want to be more independent-friendly."

Katherine Moore, SAG's national director of communications, declares, "There's no question that the number of low-budget signatories is absolutely up. Since the revisions were introduced in October '96, we've seen about one-third to half again as much as before." This, she notes, is an aggregate increase for all five low-budget contracts, and has been achieved in part thanks to "a very aggressive outreach effort in the film community."

SUB: Two Cops Turn Producers

Obviously, despite the revisions, many independents, and most novice filmmakers, still decide upon the non-union option. For Rich Ornstein, however, the new SAG contracts came at the right time.

For 25 years Ornstein, like Fishman, has dreamed of making his movie. He has shared that dream with Jerry Smollen. Both talked about it many times when they worked the streets as New York City police officers. They want to produce their cops movie, "The Desk Cop" (working title), a raucous comedy that's a cross between "Barney Miller" and "A Funny Thing Happened on the Way to the Forum." Since their retirement from the force, Ornstein has been a producer of "The Joe Franklin Show," the former television and current radio program. Franklin is an executive producer for "Desk Cop," now in development, and the three men will make the film in association with Bruce Kivo of Eastwood Talent Corps. Since the producers plan to cast, upon their availability, a multitude of "friends"--comedians such as Professor Irwin Corey, Henny Youngman, and Pat Cooper, as well as Academy Award-nominated Sally Kirkland--they will need to become SAG-signatory. Ornstein plans to sign a Limited Exhibition agreement ($200,000 budget cap).

"We want to bring it in at this budget," he says. "I'm going with a realistic budget to make sure it goes out there to the public. I don't want to try to raise four million and let it sit around for four years. I want to get going and get it out. Everyone is excited about the potential of this movie as a cult film and TV series--something like 'The Odd Couple.' We feel with the people we have involved, we'll do very well."

SUB: "Limited Ex": Facts and Figures, Give and Take

The Limited Exhibition contract is accessible to many independent filmmakers. The performer's daily rates are $100 with a guaranteed one or two days of work, and $75 with a guaranteed three or more days. The contract offers the option of noncovered extras and performers when acceptable, six-day work weeks with no premium, reduced overtime rates, and no "consecutive employment" (except on overnight location). Consecutive employment means that a performer is paid from the first day he works to the last, regardless of whether or not he is actually on the set. There is no duration limit to this stipulation.

In any of the five low-budget agreements, the union waives consecutive employment, but in return the producer gives up "exclusive rights" to the actor for his project. This means that if an actor receives a better offer, he has the right to cancel out on a low-budget film, making scheduling subject to the performer's availability.

Along with greater restrictions on unpaid performers and extras, the Modified Low Budget agreement has benefits similar to those of the Limited Exhibition agreement. So does an Experimental film--though for this, actors are unpaid. The residual payments for all three of these contracts, however, are twice that of the standard Low Budget agreement's rate for distribution to free television and pay cable (7.2% as compared 3.6%) and videocassettes/discs (9% as compared to 4.5% of the first million).

A commercial release anywhere in the world of a Limited Exhibition or an Experimental film will result in deferments equal to those of the standard Low Budget contract. In the same case, a Modified Low Budget agreement maintains its base salaries. There is, however, a Catch-22. In all cases, a prior release to the above ancillary markets (including overseas) will trigger deferments approximately 20% higher. These are equal to deferments under the Television agreement--which is similar to the Basic Theatrical agreement. The higher deferment rate becomes effective upon distribution to television markets (free TV, basic and pay cable, and videocassettes/discs) here and around the world.

SUB: Low Budget and Affirmative Action

The Low Budget and Affirmative Action contracts, with ceilings of $2,000,000 and $2,750,000 respectively, carry the same residual payoff as the Basic Theatrical contract--a range of from 3.6% to 6%. Under Low Budget and Affirmative Action, producers pay salaries of $466 daily, $1,620 weekly, and $99 extras in the New York zone; as opposed to $559 daily, $1,942 weekly, and $99 extras under the Basic Theatrical contract.

Unlike the Basic Theatrical agreement, Low Budget and Affirmative Action offer benefits similar to those of their three sister agreements--except for the six-day work week without a premium. There are also various minor conditions to be satisfied.

Films that are signatory to any of the five SAG low-budget contracts must be shot entirely in the U.S. Included in any SAG union contract is a payment of 13.3% to the pension and health plan and a security deposit of 40% of the actors' budget, or two weeks' salary--whichever is higher. The basic differences among the five low-budget agreements are in salaries and in deferred and residual payments. Another difference concerns distribution restrictions and requirements.

SUB: Oops: "Initial Theatrical Release"

To avoid an upgrade for the three most lucrative contracts--Low Budget, Affirmative Action, and Modified--the guild requires an "initial theatrical release." SAG defines such a release as a two-week run at a paying theatre anywhere in the world. Without a theatrical release, it's inevitable that financial success will trigger a deferment payment equal to that of the Basic Theatrical agreement. The deferment could also include consecutive employment and overtime penalties which are waived during the production of any low-budget signatory motion picture.

But the odds of an independent film, in particular one without a name actor, gaining such a release are one to three percent. This Catch-22 can discourage some indie filmmakers.

For standard Low Budget and Affirmative Action motion pictures, distribution to ancillary markets is the same percentage as the Basic Theatrical rates (ranging from 3.6% to 6%).

SUB: Distribution and Deferred Payments

Any SAG-signatory producer must obtain from the union an executed Distributor Assumption Agreement form upon finalization of a deal. The producer is responsible for reporting profits to the guild and fairly paying performers. Payment starts immediately upon a distributor's payment to a producer. If such a payment does not cover deferred salaries, the union will discuss options with the producer.

"We have worked out deals when the producer didn't get enough from the distributor to pay deferred salaries," says SAG's Ron Bennett. "With the performer's consent, the producer may pay less. But the production shouldn't get any dividends until the actors are paid off."

Release restrictions on Limited Exhibition and Experimental films are more cumbersome. Limited Exhibition films can only distribute to film festivals, art houses, basic cable, public television, and for Academy Award consideration. Any further distribution will cause an upgrade in deferments to at least the standard Low Budget contract rates. Ancillary market residuals are double or markedly higher than the standard Low Budget's rate.

Experimental films have the same deferred and residual payments. The union restricts such works to distribution to film festivals and "limited markets," and for Academy Award consideration. Under all five low-budget contracts, signatory producers also may face deferred overtime and consecutive-day payments plus various expenses and penalties.

For "The Desk Cop," Ornstein believes the pluses far outweigh the minuses. He realizes that gifted SAG performers and name talent increase a low-budget film's distribution clout. He understands that success will at most upgrade the salaries or will have at least paid back the original savings in residuals. This price is paid by knowledgeable producers.

Ornstein is comfortable with the bond between filmmaker, guild, and actor. "Beyond any doubt, if we hit a home run or get a single, the actors are in for the ride," he says. "They're doing us favors as friends and have been major names in show business for many years. If we are successful, we feel everyone in the family will make out. It's a two-way street."

Under all of the low-budget contracts, a union actor can bid for a higher salary. "Anyone has the right to negotiate over the minimum," says Bennett. "The low-budget contracts are really handled no differently than the basic agreement. If an actor can negotiate for more within the budget of the production, and the producer feels the actor's presence will bring more interest to the film, the actor will probably get more." In other words, Brad Pitt, despite his multi-million-dollar salary, could feasibly perform in an experimental film with a budget cap of $75,000. Ornstein expects his "friends" to work for the Limited Exhibition scale ($75 to $100 daily)--with the incentive of a payoff in the future.

SUB: "Swan" Experiments; "Dogs" Go Low Budget

Two more low-budget signatories are the motion pictures "Swan Dive" and "Dish Dogs." The former is a SAG Experimental short film, while the latter is a feature under a Low Budget agreement, produced by Michael Candela and Richard Mann. With principal photography beginning next month in New York and second unit in San Francisco, Jean Joson will direct "Swan Dive," a coming-of-age piece based on the short story "Safe," by Cherylene Lee. Jodi Barias is the executive producer. They faced a unique casting situation because the main characters and their family are Asian-Americans. Along with Jan Sassano and Sig De Miguel, the casting directors, Joson weighed both the union and non-union options. Ultimately, the team decided to become signatory.

"There were a couple of reasons," explains Joson. "The pool of American-Asian actors is, unfortunately, limited. In order for me to find more established and experienced ones, we felt we needed a SAG contract so we could get submissions from agents through our cast breakdown. Simultaneously, we tried other options. Jan and Sig called all their agent friends and contacts. This was all done in tandem. We were attacking from all different angles."

Certainly, the guild is the country's largest organization of professional performers and represents most of the world's greatest motion picture and television actors. The pool of non-union performers, on the other hand, also boasts many talented thespians. Eventually, most of these want to join the guild; at this point in their careers, however, few have any value in the marketplace.

Joson cast one union and one non-union performer for his main characters. DeeDee Lynn Magno is a SAG member; Matthew King is not. Sassano and De Miguel found King through a mail-in submission of his photograph. The Experimental contract allows for less stringent casting of non-professional performers than do the Low Budget, Modified Low Budget, and Affirmative Action agreements.

"Sig and Jan strongly encouraged me to go with a SAG Experimental contract," says Joson. "I felt the caliber of actors was higher. Many agents would not submit their best clients without a SAG Experimental contract signed. Sure, they would send me people they were hip-pocketing or who were brand-new, but not the more experienced actors. Sig and Jan did call [casting directors] for favors, but we got a better response once we were signatory. Going with a union contract brings legitimacy to the film. Although it was a viable option to go non-union, we felt it would not be taken as seriously."

During their productions, both Joson with "Swan Dive" and Candela and Mann with "Dish Dogs" had to keep their fingers crossed, because as low-budget signatories they did not have exclusive rights to their actors. An actor's cancellation, especially at the last minute, could possibly dissolve an independent production company in which money is excruciatingly tight. Usually, the company must pay staff and technicians as well as studio and equipment rentals, despite a loss of days. Upon successful distribution of a film, the producer is liable for all consecutive-day and overtime payments, among others. This could be a substantial amount if scheduling is handled haphazardly.

In October, "Dish Dogs" wrapped without calamity in Los Angeles. The "anti-romantic comedy" concerns two young men who are pseudo-philosophers searching for personal epiphanies while traveling and washing dishes at restaurants. Sean Astin, Matthew Lilliard, and Brian Dennehy star. Robert Kubilos is the director, and Ashley Gott Meyers and Nathan Ives are the writers. Producers Candela and Mann hired a sales agent to help distribute the film.

Their motive for using the guild was twofold: "All the good people belong to SAG," begins Candela. "Well, let's put it this way--99% belong to SAG. In today's market, it's become very hard to sell a product without some sort of recognizable talent attached. The other reason for going SAG is not only the use of name talent, but also the use of good actors."

SUB: Honesty Is the Preferred Policy

The union expects a filmmaker to negotiate in good faith. This includes submitting an honest budget. The projected figures should include everything from finders' fees and contingency costs to office and miscellaneous expenses. The union also expects a producer to complete all paperwork on time and to pay actors accordingly. Failure to do so can result in financial penalties.

The guild tries to avoid further concessions regarding the five low-budget agreements. "Well, listen--we've already given huge breaks to these producers," says Bennett. "Occasionally, in certain areas, we will negotiate, but not the low-budgets. This is where we gave. In general, these are the numbers. It's difficult to bend the rules.

"It should be pointed out that if a production goes over the budget limit, the producer must pay up to the higher agreement," he adds. "If a budget is close to the limit, we'll [also] have the producer sign the next higher agreement. The budget must include everything it costs to get ready to release the film. All factors must be included."

Despite the good intentions of the union and most filmmakers, some producers try to scam the system or find cracks in it. For instance, the guild initially introduced the Limited Exhibition contract to accommodate the many New York filmmakers who were creating a proliferation of art works. The work of Los Angeles producers also increased under the contract, but they created commercial products and sometimes failed to pay required salaries, deferments, and residuals. Believing it now knows how to address these abuses, SAG has reinstated the Limited Exhibition.

A related producer dodge concerns the payment of extras for low-budget signatories. This is often at the discretion of the producer--whose priorities, of course, include keeping his budget as low as possible. Some convince themselves that it's better not to pay extras if they can talk their way out of it. Noncovered extras do not have deferred salaries. Still, SAG's contracts stipulate that a producer "negotiate in good faith prior to the start of principal photography."

A third possible scam is to cast a SAG actor and not become signatory. The producer might tell the actor that he will pay any fines if the guild discovers the deceit--rationalizing that it's better to pay the fine for one than the salaries for all. Union actors are forbidden to perform in non-union films. Some do, however, to keep working. If found out, the actor will face a trial board of his peers; penalties can include fines, probation, or loss of membership. The L.A. office reports that only once has it excommunicated a member.

SUB: Moving to the Union

All in all, the movement of independent producers, especially first-time filmmakers, from non-union to union is gradually increasing--maybe too gradually for the guild and its representatives. Many novice producers are unaware of the revised contracts. Most do not have the savvy to comprehend that professional performers and name actors can help increase a motion picture's chance for artistic and financial success. Others are turned off by the paperwork involved. For almost all, the decision ultimately to choose the non-union option is based on saving money.

Presently in postproduction, BumSoo Kim produced and directed his first feature film, "Dead Guy's Son," using non-union talent. Robert Matthew Dolan wrote the script, a black comedy loosely based on "Hamlet." Kim, like Larry Fishman with "Zchlom," could not afford to pay his actors. Although he knew about the SAG contracts, his budget was too low to meet requirements for a Limited Exhibition agreement.

"I just didn't have enough money to do it," he says. "I know of the SAG low-budget agreements, but I would have had to still pay actors a thousand dollars a week. I just couldn't afford it. I did set up a bonus plan for my actors upon distribution."

Was Kim satisfied with the actors he employed?

"I was very satisfied with the actors I got," he replies. "Not all of them, of course. I would love to work with SAG if I have more opportunities in the future."

Fishman agrees. He, like Kim, will submit the final print to festivals. Fishman hopes to gain distribution for his film, or recognition that will lead to professional opportunities.

"Even though I have described some problems, I would probably go with SAG or seriously look into it in the future," he says. "If I were not as much concerned with money as I am now, I would seriously look at going with SAG."

¥ ¥ ¥

The future between the union and independent filmmakers is uncertain. Perhaps SAG needs to make more concessions. Perhaps first-time producers need to become more knowledgeable before making motion pictures. Unfortunately, so many beginners are blinded by delusions of grandeur that they can't comprehend the big picture.

The division between the guild and independents concerns two disparate sub-groups: novice filmmakers (the majority) and penny-wise (some might say "-pinching") producers of commercial products. It may be difficult for SAG to fully develop a relationship encompassing both sectors of the independent film community.

For the few novices who do succeed, however, their next work is almost inevitably as SAG signatories. Those who hope to succeed with their first shots definitely increase their chances with union performers. Brad Pitt or no Brad Pitt.

DAVID: PLEASE SURROUND THE FOLLOWING WITH A HAIRLINE OR SOMETHING TO MAKE IT STAND OUT. THANKS, MLR.

New York-area filmmakers can contact SAG about its low-budget agreements at: 1515 Broadway, 44th floor, New York City, NY 10036; (212) 944-1030. Ask for the Contracts Department.

THE END

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