For many, SAG-AFTRA’s offered waivers for independent films made without major studio backing have been seen as a way to power up the Fall Film Festival schedule with a touch or two of normalcy. What knock-on effects will they have on sales from these festivals, however? We have a local expert entertainment attorney working in all areas of the USA, Brandon Blake, from Blake & Wang P.A, to offer some expert guidance.
The Film Sale Question
For most, it’s the potential effects on sales resulting from this year’s festival circuit that raise the biggest question. After all, any streamer or studio that puts money on the line for a project currently using an interim agreement with SAG-AFTRA will have to comply with any residual or subscription revenue asked under said agreement. At least until a new guild contract is finalized.
While most buyers will be aware of this facet of the waiver process, it may have some unintended effects for those who have signed waivers merely to allow publicity to go ahead as originally planned. Currently, the interim agreements are using a requirement that streaming actors receive 2% of subscription revenue generated by their projects. Any agreement around residuals will likewise need to be honored, at least temporarily.
This requirement will, of course, fall on the distributors. For most projects, it’s reasonable to assume that streamers, at least, will be steering clear of projects working with this revenue share. While the strikes are still actively underway, it’s near guaranteed.
The ‘Going-Forward’ Basis
These set conditions only last as long as the strike, of course. Once a deal can be reached with the guild- whether individually, as we saw happen in the now-notorious packaging strikes of 2021, or through collective bargaining.
Regarding residual payments, not only is there an increase (as is to be expected), but there are additional reporting requirements. Domestic and foreign grosses have to be separated to correctly determine residual liability and the proportion due to stunt actors. The SAG-AFTRA minimum wage sees an 11% increase, with performance-capture artists now included as union members.
The loss of the major buyers who fall under the AMPTP banner (think Netflix and Disney among others) will likely have a big impact on the Fall Festival buying climate. To add to some of the confusion, Venice and Toronto’s iconic festivals are thronged with projects which have applied for interim agreements, but without clarity on which have been granted (yet). Additionally, it was announced last week that SAG-AFTRA will not be offering waivers to US-produced projects with a Writer’s Guild of America contract, either, which could further impact some lineups.
Of course, not every film on offer will be under these waivers. Nor are AMPTP members the only buyers active in the markets. Ferrari, directed by Michael Mann and set to show at Venice, for example, has already been acquired for distribution by Neion, which is not an AMPTP member. Under the waiver, Penelope Cruz and Adam Driver will be able to appear on the red carpet and handle press for the film during the festival.
However, it’s near-inevitable that there will be a knock-on effect on the distribution and marketing of these projects going forward. This will be an interesting year indeed for the festival schedule- but let’s hope these disruptions can soon be minimized with a favorable agreement for all.