The Rules on Residual Payments

residual paymentsTaking a look at residual payments

Stars of television shows often receive continued payments once their roles have ended and the sets have been shuttered, if reruns of the program continue airing.

Inevitably, all great runs of programming have to come to an end. However, these television shows often end up replayed over again nightly or weekly for people’s entertainment. Viewers aren’t giving up “Seinfeld” any time soon. Those reruns draw people back to the network to watch the programs they loved during their original runs. Compensation for the entertainers in those shows is typically required – the reruns of the programming they helped create still generate revenue long after the final scene is shot. Rebroadcasted films, just like television shows, also result in this compensation.

When and how much to expect when it comes to residuals

The payments are referred to as residuals. When individuals create a film or television show, they are paid a larger amount during the process, and smaller totals each time the work is reshown to a broadcast audience. The Screen Actors Guild and American Federation of Television and Radio Artists each successfully argued for residuals decades ago, and now the merged union takes a lead in the process of ensuring residuals are paid and educating television and film creatives on the residual process. SAG-AFTRA has myriad responsibilities when it comes to residuals. For example, the organization is available to head up lawsuits on behalf of individuals who believe they are owed payments, such as the recent case against Empire co-creator Lee Daniels. 

How much actors, writers and others receive in residual payments is based on a number of factors. For example, what sort of work are the residuals covering? Rates for commercial, film and television residuals differ. Additionally, the way a contract approaches these payments will differ depending on whether the material is shot for feature films, cable television or another medium. Union representatives or an entertainment law attorney could explain more about what sort of residual rates to expect depending on the role played and intended medium.

Always confirm whether a job calls for residuals

There are numerous cases where people should not expect to receive a residual check in the mail sometime in the future. For example, background players in film or television do not receive residuals. In addition, due to SAG-AFTRA’s role in managing these payments, if a project is not a union job, participants also should not expect to receive residuals, barring certain circumstances. 

If you have a question about residual payment totals or whether you should be receiving these royalty checks, speak with an entertainment law attorney for more information. It is also important to engage in discussion with an entertainment lawyer if you believe you are owed residuals. With an attorney you will be able to work out a plan on issues such as going to court and whether to seek the assistance of SAG-AFTRA. 

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Anthony R. Caruso is a business transactional attorney in New York and New Jersey with experience in structuring, negotiation and completion of legal deals involving business, entrepreneurs, athletes and performers.

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