Principal Performers: Holding Fees
What are holding fees?
Holding fees are paid to a performer in “fixed” cycles, every 13 weeks from the session date, if the producer wishes to retain the rights to air the commercial and wants to hold a performer exclusive to the product. During this 13-week period, a performer cannot accept work in a commercial for a competitive product. For example, if a performer has received a holding fee for a Pepsi commercial, he/she may not accept work for a commercial advertising Coca-Cola during that period of time.
What if a performer does not receive a holding fee?
If the producer has not paid a holding fee to a performer by the first day of the new holding fee cycle, he/she is released from exclusivity and may audition for, and accept employment in, a commercial for a competing product.
Is the producer obligated to send a notice releasing a performer from the commercial?
The producer is not obligated to send a notice releasing a performer from the commercial. If a performer does not receive a holding fee for a new 13-week cycle, the performer has been released from the commercial.
What if the holding fee payment has been postmarked late?
Holding fees are due (and must be postmarked) no later than the first day of the holding fee cycle. There are several choices if the holding fee is not paid on time. The performer may ask for late payment damages and accept the holding fee. Or the performer may reject the holding fee payment and consider him/herself released from exclusivity. Or the performer may reject the holding fee payment and renegotiate the terms of his/her contract pertaining to the commercial if the producer wishes to continue to use it.
How long is a performer “held” to a commercial?
The “maximum period of use” of a commercial is 21 months (a total of seven 13-week holding fee cycles). Provided the producer continues to make timely holding fee payments, the performer is held exclusive to the product for the 21-month period. If the performer (or his/her representative) does not send a timely renegotiation letter, the producer can extend the maximum period of use for an additional 21 months at the same rates as for the original 21 months.
When must a renegotiation notice be sent to the producer (or advertising agency)?
A renegotiation letter must be sent 60 to 120 days (two to four months) prior to the end of the maximum period of use. Check your pay stub to find the end date of the maximum period of use (MPU), and count back 60 to 120 days to establish when you or your agent must send the notice. The letter should be sent to the producer (ad agency) listed on your employment contract. Sending the letter gives the performer the right to renegotiate new rates or to say he/she does not grant the right to continued use of the commercial. It is advisable to send a copy of the letter to the Guild at the same time.
If your agent does not send a renegotiation letter, and the commercial is renewed for an additional 21 months at the minimum scale rate, he/she may not take a commission.
