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Monday, June 16, 2008

More info about deferred pay

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This article is reposted from a filmmaking web blog, posted by someone who wrote a book about what it takes to produce an indie film. The writer then posted chapters from the book on the website. This particular chapter is no longer on the site (they pull a post whenever they add a new one- this appears to be one of the older ones.)

(Note to Web Film School writer- I would be very happy to delete the text of this article and only provide a link to my readers, so as not to violate copyright. Just send me an active link and I will handle it right away. Thank you!)

The reason I pass it on is because it gives you, the actor, some insight on what it means from the producer perspective to get "deferred" pay. A lot of you are without agents or have agents who won't work on these levels of projects, so you need to understand what you would be negotiating for. This, of course, is written in the best interests of the producer...

Salary and Deferrals

The procedure of combining salary and deferrals, although not recommended, is commonly used by first-timers. Beginning producers always feel that to attract competent talent, they must pay large salaries. They accomplish this illusion by offering a deferral agreement, in which a pre-determined amount is paid at a later date.

A first-time filmmaker hearing that a Director should get $10,000 a week, a DP $6,000 a week, an actor $5,000 a week, etc., feels compelled to match that salary. However, knowing that these amounts are unavailable to him, the inexperienced producer tells the Director that he'll get $10,000/week: $3,000 in cash, and $7,000/week deferred. The DP is told he'll be paid $6,000/week: $1,000 cash and $5,000 deferred. The cycle continues until hundreds of thousands of dollars are built up in deferrals.

The upside of deferrals is that cast and crew feel more appreciated. The downside is that if not extremely careful, you will encumber the sale of your finished project to a distributor because the outstanding deferrals, which are actually debts, could be ridiculously high.

IMPORTANT POINT: If you use deferrals with crew, be sure to tell them that deferrals will be paid out of profits. This sounds fair. However, when you write the employment contract, use the phrase Net Producer’s Profits in the place of the more generic “profits”. The reason is, that there probably won’t be Profits, there likely won’t be Net Profits, and there very likely won’t be Net Producer Profits. In effect, you owe them nothing, even though the film got made, distributed and earned revenues.

Finally, a word to the wise: Based on years of hiring non-union, low-budget crews, I recommend not using deferrals. It merely complicates matters. I discovered that I can hire the same person whether I say, "I'll pay you $2,000/week, $600 in cash, with $1,400 deferred," or simply say, "I know what you’re worth. If you’re not doing anything for the next 1-3 weeks please help me….But I only have $600/week." I have always gotten the employee I wanted, if he/she was available, without the bullshit and the complications created by using deferrals.

However, I realize that most first-timers are insecure about negotiating with crew and talent. Therefore, if necessary, use deferrals, but be sure to define deferred until the film makes net producer profits.

Below-the-Line crew are everywhere. They are in every city and state. They are looking for opportunities. Just call the local film commissioner. Get the respective production directory. Budget what you can pay, don’t be embarrassed if it is a low number. For $23,000-$35,500 you are able to obtain a 25 person professional crew for your production. Don’t pay more!



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Erin Cronican's career as a professional actor and career coach has spanned the last 25 years in New York City, Los Angeles and San Diego. She has appeared in major feature films and on television, and has done national tours of plays and musicals. She has worked in the advertising & marketing departments of major corporations, film production companies, theater magazines, and non-profit acting organizations. To learn more, check out http://www.theactorsenterprise.org.

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