The Top 10 Mistakes Actors Make When They Sign a Contract

Below is my “top ten” list:

  1. They fail to read it.

You’re an actor. You make you living through your craft. So when you book that role and a deal comes your way, your first instinct may be to start pumping your fists in the air and sign whatever document is put in front of you before the hard and fast contract deadline passes. But take a moment to read it. The black and white letters on this thin piece of parchment governs the relationship between your money, your art, and your career. In a business filled with chicanery, the contract can be a veritable life preserver. You worked so hard to get it, so take the time to read it.

2. They don’t get an attorney’s opinion.

As an entertainment lawyer, I’m a bit biased. But whether the contract is with a studio, network, or theater producer, you can bet your bottom dollar that those on the other side will have a lawyer advising them. In an effort to level the playing field so that you are on equal footing with the “big boys,” so should you. Don’t get me wrong. I’m not naïve enough to believe that you may have leverage to negotiate a better deal. Indeed, your agent may have already pushed the agreement as far as it will go. At the same time, you still need to read the contract and discuss it with an attorney so you understand what the heck you’re agreeing to.

3. They overlook the exclusivity clause.

Exclusivity provisions are like the Grinch that stole Christmas. They can prevent actors from performing in various commercials, television shows, films, and even Internet projects. The good news, if there is any, is that exclusivity provisions are usually negotiable if done at the outset.

4. They don’t confirm the union status.

The contract should clearly and unambiguously state whether the agreement is governed by the Screen Actors Guild, the American Federation of Television and Radio Artists, or Actors’ Equity Association. And when it comes to independent films, the actor should not take anything for granted. He should call SAG to confirm that the producer actually is a SAG signatory.

5. They don’t get most-favored-nations language.

The producer may have assured you that all actors are getting the same salary, the same credit, the same-size dressing room, and so on — this is often referred to as “most favored nations.” To ensure that this is an ironclad condition of the agreement and not just lip service, the contract should clearly state that the actor’s terms are on a most-favored-nations basis. As Ronald Reagan once said, “trust but verify.”

6. They don’t get a merchandising clause.

It’s common for producers to provide actors with profit participation when it comes to merchandising — 5 percent of the net profits associated with any merchandising that uses the actor’s image. Don’t forget to ask for it!

7. They don’t use a loan-out corporation.

If an actor is grossing anywhere in the neighborhood of $150,000 annually, he or she may be able to reduce their tax liability by forming a corporation that contracts directly with the producer for the actor’s services. This is commonly referred to as a loan-out corporation. I recommend speaking to a tax attorney to determine whether the benefits outweigh the costs when it comes to your individual circumstances.

8. They don’t understand how long the contract may last.

With respect to a test option agreement for a television show, the broadcaster may have the option to engage the actor at a pre-determined price for a number of years (six years is not uncommon). Make sure you understand how long the agreement may tie you up.

9. They don’t get pay-or-play language.

Suppose you don’t get along with the director and you’re promptly fired for no good reason. Do you still get paid? If you have pay-or-play language, you still get paid. A pay-or-play provision means that even if the producer kicks you to the curb, you still get paid your contract rate.

10. They don’t check the perks.

Who doesn’t like perks? They’re like the Bertie Bott’s “Every Flavour Beans,” a delectable and popular treat right out of the wizarding world of Harry Potter. Desirable perks in acting include first-class travel to the premiere of your film and a luxurious dressing room (no less favorable than those of your co-stars, of course), a dedicated assistant, a free DVD copy of the project, a first-class ticket to the location for your significant other. The list might even go on. You work hard. If you have the leverage to get these perks, you deserve it!