SAG-AFTRA and the Joint Policy Committee (“JPC”) have announced changes to the popular Low Budget Digital Waiver (the “LBDW”) under the SAG-AFTRA Commercials Contract (the “Commercials Contract”).  You can find the full text of the 2020 LBDW here.

The LBDW was issued in 2017 to much (and deserved) fanfare.  In its original form, the waiver gave JPC-authorizers, signatory brands and signatory advertising agencies (but not third party signatories) free reign to negotiate all talent fees (rather than pay the mandatory minimum rates in the Commercials Contract) for qualifying low budget commercials produced for digital media.  The waiver was intended to help “level the playing field” between signatories and non-signatories – at least with respect to digital productions.  And many signatories (especially agencies) saw it as a godsend. 

While the updated 2020 LBDW follows the general structure of the original, there are some important changes.

• The Budget Threshold:  The budget threshold for the LBDW has been changed from $50,000 per commercial to $100,000 per production day.  While, at first blush, it may appear that this will expand the number of productions that will be eligible for the waiver – after all, $100,000 is twice as much as $50,000 – closer scrutiny reveals that this is not necessarily the case now that the budget is measured by production day instead of by commercial.  It is true that if you are producing a single commercial on a single production day for a budget of $100,000, you now qualify for the waiver (whereas you wouldn’t have before).  However, it is quite common for agencies and brands to produce multiple digital spots during a single production day.  A signatory producing five digital spots during a single production day for an aggregate budget of $150,000 would have qualified (with room to spare) under the “old” LBDW; that same signatory will not qualify under the 2020 LBDW.  Instead, that producer will have to explore other options –  perhaps splitting the production over two days (which, of course, would be inefficient and inconvenient), producing under the Social Media Waiver (if applicable) or using the ACS Digital Upfront bundle.  (See the chart included in this post.)
• Connected Shoots:  The 2020 LBDW makes a distinction between “Connected Shoots” (i.e., “low budget digital productions that are also shot on the same day as a production that is not produced under the Low Budget Digital Waiver”) and “Unconnected Shoots” (i.e., standalone productions under the LBDW).  The waiver imposes new requirements on Connected Shoots.
  • First, producers must email an “attestation of the budget” to the union prior to the shoot.  The LBDW doesn’t specify a format for the “attestation” or what level of detail the union expects.  Agency producers should make their clients aware of this new requirement, since most clients consider production budgets to be highly sensitive confidential information.  
  • Second, certain fees for performers appearing in Connected Shoots are no longer fully negotiable.  This chart summarizes which fees are negotiable, and which are not, under the new 2020 LBDW:
• Which Talent Fees Count Towards the Budget?:  The 2020 LBDW clarifies that the threshold production budget includes session fees but excludes use and edit fees.  Excluding use and edit fees makes a lot of sense since you can’t calculate those fees until you know which performers will end up in a final cut and how many edits you will create – in other words, until long after the shoot is completed.
• No Celebrities.  The 2020 LBDW provides that celebrities cannot appear in spots produced under the waiver.  While the 2017 LBDW didn’t state this expressly, it was generally understood that it would difficult to qualify for the budget threshold when a celebrity (especially a celebrity paid under a hefty multi-service agreement) was engaged to appear in the digital spot.
• Casting Notices and Performer Contracts:  The 2020 LBDW requires that “session, use, and edit fees must be broken down separately on the casting notice, noted at time of booking, and separately enumerated on the principal employment contract.”

The union and JPC left intact the other requirements of the original LBDW – including no exclusivity from performers, a one-year MPU, waiver of the Taft-Hartley fine, unavailability to third party signatories, and certain payment (and performer consent) requirements if the producer later wishes to use the digital spot in broadcast and other media.

The 2020 LBDW goes into effect on January 1, 2020.