Commercials Contracts for a New Era

Upfront Use Packages: A New Way to Get Paid

SAG-AFTRA’s Commercials Contracts have received a major overhaul, with new provisions that reflect how business is being done in today’s quickly evolving media landscape. The agreements are expected to cover more than $1 billion in annual earnings for professional performers and were ratified by 97% of voting members on May 8, after being overwhelmingly approved by the National Board in April.

“While the fight continues, together with strategy and solidarity, nothing is impossible,” said SAG-AFTRA President Gabrielle Carteris, who chaired the Commercials Negotiating Committee.

With the growth and proliferation of social media and streaming platforms has come the rising need for brands to exhibit commercial content in a multitude of ways and the emergence of new companies competing to meet those needs, particularly in the digital space. The innovative new terms of these contracts are a well-timed response to these significant changes.

Contracts Deliver Significant Gains

The negotiating team achieved across-the- board wage increases of 6% for all performer categories; an estimated $22.2 million in increased funding to the pension and health plans; coverage for stunt coordinators; and new gains for group dancers and vital protections against sexual harassment. In addition, the contracts allow for a new renegotiation process, which benefits both members and talent agents. Employers now bear the responsibility for contacting a performer or their agent to negotiate for consent to use their performance beyond the maximum period of use.

Introducing the New Upfront Use Packages

The most innovative and exciting features of the new Commercials Contracts are the Upfront Use Packages: Upfront Plus, Upfront Flex and Upfront Digital. These options provide the flexibility that advertisers and ad agencies need, while guaranteeing members significant and predictable payments for their work. The terms of the traditional Commercials Contracts will still be available for those employers who prefer them, but the Upfront options are a complete and thoughtful response to the needs of a changing industry.

In his recent appearance on the SAG-AFTRA podcast episode "How the New Commercials Contracts Change the Game," SAG-AFTRA Chief Contracts Officer Ray Rodriguez praised the Upfront Use Packages as a new feature that benefits all players in the advertising industry.

“It was a true win-win: Everybody left feeling like they had gotten what they wanted and, meanwhile, we created opportunities for the membership and the industry as a whole to increase the footprint of the contracts,” said Rodriguez.

Each of the three models require a substantial upfront payment. If the employer chooses Upfront Plus, on-camera principals are guaranteed a $20,000 payment. If the employer chooses Upfront Flex, the on-camera principal gets an $8,000 advance, with continuing payments for all use beyond that guarantee. If the employer chooses Upfront Digital, the on-camera principal receives $3,825 for made-for-digital commercials. Off-camera fees are set at 75% of the on-camera rates for all three Upfront models.

Another revolutionary aspect of the upfront payment options is the 12-month maximum period of use, which allows members and their agents to negotiate for more money, sooner. In another significant gain, session fees are not creditable and are paid in addition to all use fees. The new packages also come with their own set of editing provisions — permitted, unpermitted, paid and addressable — each of which contains different levels of compensation and protections for the performer.

Changes to the Audio Commercials Contract

In addition to an increased session fee of $350, the Audio Commercials Contract also offers a brand-new, simplified use payment structure. The Audio Flex model allows for predictable payments that include compensation for tags and mechanical edits and reflect the way the industry produces audio ads today.

The new 2019 SAG-AFTRA Commercials Contract and Audio Commercials Contract are now more relevant than ever before, and allow employers to hire professional performers for every kind of ad they need. While still very new, these groundbreaking contracts are already being embraced by the advertising industry and will lead to an increase in union work opportunities and member earnings.

“The new upfront use package provisions truly reinvigorate these contracts and undoubtedly will help advance our goal of preserving and growing union commercial work for years to come,” said National Executive Director David White. “From the biggest national campaign to the smallest social media-branded post, every ad can be a union ad.”

This story was originally featured in the summer 2019 issue of SAG-AFTRA magazine.