Way #1 – Pay-or-Play
Indie producers seem to get very agitated around the topic of pay-or-play, a guarantee which they feel is forced upon them by agents (for the benefit of the actor or director), that the talent will be paid their fee, should the talent not be used in the production.
But, this isn’t a bad thing, nor is Pay-or-Play anything to stress over; there are far more important things to be getting agitated about. For instance, I would be willing to wager that 99% of indie films collapse before their film closing happens. If you don’t secure your financing, you don’t have to pay, because you, the producer, also never got to play. This is one of several Conditions Precedent (CP) that are part of a pay-or-play offer, which protect producers.
Now, if a producer does get to the point of closing the financing on a film, there aren’t a lot of compelling reasons to axe the star, unless the film just landed a bigger star that can significantly elevate the value of the project/budget to warrant jettisoning the old star, and paying them out.
But, it is worth noting that there are several reported instances of stars calling-on these guarantees, where someone got stuck holding the $15m tab.
Way #2 Backing Offers
“Backing offers to talent” is another approach, wherein you can offer a role to an actor and demonstrate proof-of-funds (from your investor) that will substantiate the offer. This is an acceptable way to do business.
Some reps, however, will insist the money be put in escrow/trust while the actor considers the part…that is ludicrous. Nobody separates you (or your investor) from their money. Ideally, if you can demonstrate proof of funds to a reputable, mainstream, packaging agent or attorney, then their assurance will generally sastisfy the reps. This method limits the number of times you have to expose your financial information to 3rd parties.
Way #3 Poorman’s Pay-or-Play
Lastly, I periodically hear about actors that charge fees to read scripts (e.g. $10k is paid to the actor; if they pass, then you get your money back; if they sign-on, then $10k is applied toward their acting fee, unless the project dies, then it’s foreited (sort of a poorman’s-pay-or-play).
I assume the logic behind this (and the escrow offer) is to weed out the feebelest of the 99% of indie projects that are inevitably going to collapse. This is when you know you’re in B/C/D-list actor land. They demand it because they don’t know you.
Nonetheless, it’s silly and a waste of time.
What I’m about to say next is so fundamental and so important,
I mentioned it in the very first paragraph of my very first post, on this site. I am going to stress it again:
“it doesn’t take much…to tell the professionals from the amateurs: one look at a producer’s finance plan (as well as their choice of attorney) tells me right away.”
If you’re going to do business with CAA, WME, ICM, Paradigm, Gersh, Innovative, or any of the other agencies or management companies, then you better come in swingin’, with a lawfirm such as Stroock, Sheppard Mullin, Loeb, Ziffren-Brittenham, Bloom, or another attorney that has a verifiable track record of closing talent deals with the bigger agencies.
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