August 12, 2021

Know Your Rights in a Deferred Payment Agreement for Film Crews

Deferral of payments incurred over the course of production is a common practice in filmmaking. Entertainment law allows for deferred payment agreements for film crews. Provided all parties involved are satisfied with the arrangement and sign a deferred payment contract. Since the deferred payment agreement for film crews is engaged between the crew member and the production company. It’s important that all parties involved know their rights.

WHAT ARE DEFERRED PAYMENT AGREEMENTS FOR FILM CREW MEMBERS?

The filing of a deferred payment agreement for a film crew member represents the outlined contractual agreement made between the film crew individual and the film business. To allow an extended time between when services are rendered and when services are actually paid for.

The deferral of costs that would otherwise be paid out during the course of production are instead paid out after the production is finalized. And the film is nearing distribution or has already been distributed. This all depends on the terms of the original agreement that is made.

PRODUCER RIGHTS WITH DEFERRED PAYMENT AGREEMENTS FOR FILM CREW MEMBERS

As a producer, you certainly have the right to ask crew members if they would consider providing their services. Such as editing, camera operating, or some other specialty services. In exchange for a set compensation package which is deferred for a specified period of time.

Many film crew members will request that they be paid a higher compensation. Or that interest accrue on their balance of budget owned. Resulting in higher payouts than what they would have otherwise been entitled to. Had they been compensated immediately or earlier on in the production.

Keep in mind that as a producer you have the right to ask any of your film crew workers if you can defer payments. But you must follow all of the legal obligations that are set forth in the agreement and they must all be in writing.

If you fail to pay the crew member once you have entered a deferred payment agreement, that crew member may have the right to sue you for payment. As well as to place a line on the copyright of any work that they were involved in as part of the production.

FILM CREW MEMBER RIGHTS WITH DEFERRED PAYMENT AGREEMENT

Are you a film crew worker, such as a cinematographer or a film editor that has been offered a deferred payment agreement. Upon which you would provide your services and compensation would be provided to you sometime in the future?

If you’re considering a deferred payment agreement, for film crews that accept such an arrangement. We always recommend that you first consult with a production attorney or entertainment attorney. To ensure that all of your rights are under protection.

Know that you do not have to enter such an agreement! Unless you are satisfied with the details. And that you should never sign a contract that has details that you are unsatisfied with.

Instead, make sure that you are very clear, and concise, with all of the arrangements included in the agreement. And that you are prepared to wait the full duration that is listed within the contract before you will be paid.

PRECISION

Your decision to enter into a deferred compensation plan will be very important for you to carefully consider. Since the payment for your services will be deferred into the future.

It is very important that the details of exactly when compensation will be provided is clearly stated within the contract.

Precision is key here, as the film production company will be under no obligation to provide advanced payments of compensation. Unless the contract specifies that such arrangements have been made.

UNTIL PROFITS ARE MADE

It’s also important for you to understand that you will not necessarily be paid as soon as the film recuperates any form of compensation. It’s possible, based on the individual wording of your deferred payment agreement.

That you will not receive compensation until after other expenses and debts have first been paid. In fact, most deferred payment agreements will defer compensation to crew members. Until profits from exploitation of the film are generated.

And a surplus revenue (the money left over after expenses and other obligations are paid) is achieved. Many deferral arrangements provide payment as a percentage of surplus revenue.

But in such a case the percentage that is owed to the film crew will not be disbursed. Until after the film is distributed, profits are generated from exploitation, other expenses and debts are paid. And there is adequate surplus to cover the percentage agreed.

HOW MUCH ARE DEFERRED PAYMENTS FOR A FILM CREW?

Just like only the film crew and the production company can determine whether a deferred payment agreement is the right choice for their individual needs.

These are the only two parties that can determine how much will be paid out in deferred payments per the deferred payment agreement. Determining the actual amount that will be paid out in deferred payments for crew members is absolutely vital to the deferred payment agreement.

CLARITY IS ESSENTIAL

It’s easy to get tied up working with friends in the industry. Or to otherwise feel like you can be vague about the total payment that will be provided in the future. This is not ideal! A lack of clarity in a contract will give rise to a lot of confusion and frustration among crew members.

Or any others potentially involved in the arrangement. Therefore, it is very important for crew members to negotiate the terms. And to make sure that exact figures, whether in terms of percentages or otherwise, are specified in the contract before signing.

Additionally, crew members should be fully aware of what the different costs are that will be covered before their compensation will be paid. Each film production company will have different “expenses” or “costs” that will be paid out before there is a “surplus” budget.

If you’re unaware of these costs you could easily mistake a production for being profitable and having a surplus when it does not. Again, this could cause confusion, frustration, and other problems if the terms are not clearly specified in the deferred payment agreement for the film crew.

IN SUMMATION

As you can see, there’s a lot to think about. And a lot to review when it comes to entering into a deferred payment agreement. For film crews that are considering the deferment of compensation into the future. Knowing the rights and responsibilities of the crew.

And of the production company can alleviate a lot of potential risks or possibly even mitigate lawsuits in the future.

For this and for many other reasons, we recommend you work closely with an entertainment attorney! Before you finalize any details of a deferred compensation agreement for yourself or anyone else on your film crew.

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