Talent Issues in Broadcast Advertising

Introduction

A significant percentage of both television and radio commercials produced in the United States use union talent. This means that the actors (both onscreen and off-) are members of either the Screen Actors Guild (SAG) or the American Federation of Television and Radio Actors (AFTRA).

The unions have established pay scales that producers must adhere to in order to use these actors. These payments include session fees, residuals, holding fees and usage fees.

Definitions

Holding fees: A timely payment based on session dates and made every consecutive 13-week cycle, giving the advertiser the right to use the commercial in the future.

Reinstatement: Once a commercial has been released and the client decides that they want to use the commercial again, the commercial must be “reinstated.” A reinstatement requires a minimum of two back holding fees, only one of which can be applied to use.  However, the agents usually try to negotiate for more.

Residuals: Fees paid to talent for continued use of a commercial after the session fee payment.

Session fee: Initial payment to the talent for work performed for a specific purpose and period of time. It is paid by the day or by the hour, depending on the type of employment.

Signatory: Any entity that employs union talent and has signed union letters of agreement to abide by regulations stipulated in specific union contracts.

• Cable use: Any use on cable stations.
• Internet: Commercials used on a website or on the Internet.
• Network use: Use bought on a TV network and usually edited into a network show.
• Public use: Use of a commercial in a public place, such as in a stadium, a bank, on Diamond Vision, or in taxicabs.
• Wild spot use: Use bought for airing in individual markets or non-interconnected stations.

Usage fee: The practice of assigning each city in the United States points based on population. An actor’s residuals on television commercials are calculated based on the accumulation of these points in 13-week cycles.

Issues

Before deciding to either produce or air an existing commercial, it is important to determine whether or not the spot uses union talent. For television commercials, you must also determine whether or not the holding fees are up-to-date or whether the broadcast will require a reinstatement fee. (These fees do not apply to radio).

If union talent is used in the commercial then the signatory (usually the advertising agency), must determine the number of times the spot will air and then calculate the usage fees. For state-specific media, these are considered wild spots and are much less expensive then national advertising.

It is also important to know that changing an existing commercial that uses union talent is considered a new spot by the unions and is subject to additional session fees and residuals. Also, you cannot mix union and non-union talent in one commercial. (Right-to-work states are an exception to this rule. The right-to-work states are: Alabama, Arizona, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Louisiana, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, South Carolina, Tennessee, Texas, Utah, Virginia, and Wyoming. However, the signatory has an agreement to abide by the payment terms specified by the union so the rates are the same for both union and nonunion actors.)

Critical Questions

1. Does the commercial use union talent? If yes, contact the signatory or paymaster for more information on holding and usage fees.
2. Does the commercial require any talent changes (including voice-over changes) in order to be suitable for broadcast? If yes, contact the signatory or paymaster for information on session fee costs.
3. Where and when will the commercial air? Your media plan should provide sufficient information for the signatory or paymaster to determine usage fees.
4. Are the holding fees up-to-date for television commercials? If not, reinstatement fees will apply.