Why Financial Assurances?
SAGAFTRA’s Financial Assurances program is designed to help ensure performers are paid what is owed to them under our contracts.
The program has two primary areas:
- To establish responsibility for residuals payments; and
- To obtain a secured interest — often called a “mortgage” or “lien” — in the film and proceeds from its exploitation
HOW DOES IT WORK?
When you produce a film under a SAG-AFTRA contract, you submit documents that let us review the chain-of-title, corporate, financing and distribution structure of your project.
After the review, we will request:
- Security Agreements signed by anyone who owns rights in the film, its copyright and exploitation;
- Intercreditor or Subordination Agreements from other parties with secured interests;
- Guaranty Agreements from parent companies of the signatory producer, copyright owners or other financially responsible parties enabling production;
- Assumption Agreements from existing distributors; and
- If there are distribution territories where distributors will not sign assumption agreements:
- A residuals reserve cash deposit toward future residuals, or
- A collection agreement to administer residuals payments.
HISTORY IS IMPORTANT
The history of your working relationship with SAG-AFTRA, and that of the others involved in your project can affect the level of financial assurances we require.
We look at:
- Initial compensation and residuals payments;
- Claims history and responsiveness to claims; and
- Willingness to provide requested financial assurances documents.
Who Handles Financial Assurances?
Your SAGAFTRA Contracts Department business representative will receive all documents and is your central point of contact. They work with:
- A Contracts Department Financial Assurances specialist to help review; and
- A Financial Assurances Counsel in our Legal Department to assist with negotiation of requested documents, such as collection agreements.
Financial Assurances & Security Deposits
We encourage you to have all financial assurances in place before the start of principal photography.
You must complete the financial assurances process as one condition to the return of the deposit. Please do not wait until you need your security deposit back to provide the required financial assurances. This will delay the return process.
Stay in touch with your SAG-AFTRA Contracts Department business representative and any Financial Assurances Counsel with whom you are negotiating documents to resolve outstanding issues as soon as possible.
Need more Help?
- SAG-AFTRA Contracts Managers and Financial Assurances Counsel are happy to meet with you or speak by phone. Help us learn about your company, and discuss the types of Financial Assurances that may be most appropriate to your project structures.
To request a meeting, contact:
Legal Department / Financial Assurances Counsel
TOP 3 THINGS TO KEEP IN MIND
- For the best service, submit all paperwork 3 weeks before the start of principal photography.
- Budget for a residuals reserve or draft a collection agreement if your distributors will not sign assumption agreements.
- A positive history of compliance with your SAG-AFTRA payment obligations impacts the level of financial assurances we will require.