SAG-AFTRA’s announcement that it plans to release a new “Influencer Agreement” and welcome influencers into its fold (see our prior post) was big news that left the industry on the edge of its seat, but with more questions than answers. When will the agreement be issued? What will it say? Will influencers sign up in masses? What will it mean for influencers, advertisers, agencies, agents, platforms, and other players in the complicated influencer ecosystem?
While we continue to wait to see the actual agreement so we can begin to tackle these and other questions, details have been trickling out, most recently in an Influencer Agreement Fact Sheet published by the union on its website. Much of the information on the Fact Sheet has been previously reported. However there are some new, tantalizing nuggets that only make us hungry for more details.
Here are ten things that we have gleaned about the new Influencer Agreement, based on the information that has been released to date. (Caveat: All of this is subject to change, as we learn more.)
1. The Influencer Agreement can be signed only by a corporation or an LLC. This means that an influencer who operates as a sole proprietorship, partnership, or other form of business cannot take advantage of the new agreement. (Of course, forming an eligible corporate entity is a relatively low entry barrier.)
2. How will it work?
- The Influencer Agreement will be a "one production only" (OPO) contract. This means that an influencer can decide, on a case-by-case basis, whether to cover a particular project under the new Influencer Agreement or whether to go non-union. (Caveat: if the influencer ultimately chooses to become a SAG-AFTRA member, then the influencer will no longer be able to work on non-union projects unless she is prepared to flout the union's Global Rule One. See Section 9 below.)
- The union will host an online portal that will facilitate execution of the Influencer Agreement for each project. The Fact Sheet notes that the "union retains full control to deny, revoke or investigate any project."
- The Fact Sheet explains that the “Influencer’s company is treated similarly to an advertising agency that is paid by an advertiser to produce, edit and distribute content.” In other words, the company is the signatory that acts as the employer of the influencer.
- It is important to note that the influencer does not automatically become a member of SAG-AFTRA just because his or her company has signed on as a signatory to the Influencer Agreement for a project. To qualify for union membership, the influencer must follow the same path that every performer is required to follow to get a SAG card. (Generally speaking, a performer becomes eligible for union membership once she has worked as a principal performer or recording artist for one day, or as background actor for three days, on union-eligible jobs. The union's website has much more information about eligibility requirements.) Until the influencer becomes a union member, the influencer's corporation will have to file Taft Hartley paperwork for each project.
3. There are limits on when the Influencers Agreement will apply. Quite a few, actually.
- If a signatory to the SAG-AFTRA Commercials Contract wishes to engage an influencer, the Influencer Contract cannot be used to cover the project. The union's position appears to be that in that situation, the content would need to be produced under the SAG-AFTRA Commercials Contract. This suggests that the union believes that all (or at least most) branded video content produced by an influencer can and should be categorized as a "commercial" under the SAG-AFTRA Commercials Contract. The industry disputes this.
- The agreement will apply only when influencers produce the content themselves “with no involvement by any third party production entity.” It takes a village to make … well, to make anything. Influencers often collaborate with brands, agencies and other creators. Can others play any role in content creation without running afoul of this restriction? Or does “no involvement” truly and literally mean “no involvement”?
- The agreement will only apply to projects where the influencer is the only person appearing in the content; in the union’s words: “[t]there are no provisions for ensemble use.” This means, for example, that the agreement won’t apply to a makeup demo video that features a makeup artist and a model; it won't apply to influencer couples and families who produce and appear in videos together; and it won't apply to an influencer who attends a live event and interviews attendees (unless the new Influencer Agreement also includes exceptions applicable to non-professionals, similar to those found in the SAG-AFTRA Commercials Contract).
- Hazardous stunts, gratuitous nudity and sexual content are not permitted.
4. The contract between the influencer and the brand must adhere to certain requirements.
- The Influencer must have a direct contractual relationship with the brand. What does this mean for influencer agencies and platforms (including those that many of the social media channels themselves operate) that broker deals between brands and influencers? Are they frozen out? It would appear to be so, unless they permit the influencer to contract directly with the brand.
- Influencers must retain ownership of their own intellectual property. While it is not uncommon for influencers to retain ownership of their work product and license it to the brands that hire them, it is not hard to come up with scenarios in which a brand may not be comfortable with that arrangement. For example, if an influencer is hired to sing a cover version of a brand’s jingle, the brand may insist on owning the influencer’s content entirely, or at least owning any new musical material (such as a new arrangement) that the influencer creates. Are there any scenarios in which a brand can secure ownership of a portion of the influencer’s IP and still comply with this requirement?
- The Fact Sheet states that “Influencer content creation cannot be combined with another covered service.” If an influencer is engaged by a brand to perform influencer services (e.g., video posts on Instagram) and to appear in commercials (which is not unheard of), then the parties can proceed non-union, unless (of course) the brand is a signatory to the SAG-AFTRA Commercials Contract. (But, as covered in Section 9 below, if the influencer is a full union member, the performer will be bound by Global Rule One.)
5. There are limits on where the influencer content can be used. The Fact Sheet says that “no use of the content, in whole or in part, is allowed in other areas of the union’s jurisdiction (e.g., no TV, traditional commercial or industrial use, etc.).” The Fact Sheet doesn’t address what happens if the brand client wishes to use the content in another medium that is within the union’s jurisdiction. Can the parties negotiate for those rights for additional compensation, subject (perhaps) to the minimum rates set forth in the applicable SAG-AFTRA collective bargaining agreement? If negotiation is possible, can the brand negotiate for those rights up front? Or does “no use” truly and literally mean “no use”?
6. There is a maximum period of use. The maximum period of use (MPU) for content produced under the Influencer Agreement will be one (1) year, “unless otherwise negotiated.” In situations where the MPU applies, do both the influencer and the brand have to remove the content from their feed? Presumably not, but clarification on this point would be welcome
7. Compensation is freely bargained. No minimum rates apply.
8. Pension and Health contributions must be made. The influencer's corporation must make pension and health contributions to the guild plans based on the portion of the compensation that is allocated to union-covered services. The Fact Sheet states that “[b]y default, the Influencer pays Pension & Health contributions on a minimum of 20% of their compensation.” The Fact Sheet does not specify what the applicable rate will be, but we understand that the rate will be 19%. Presumably, this additional cost will be passed on to the brand client.
9. Membership has its privileges … and its obligations. The Fact Sheet tells us that “Influencers will be bound by the same membership rules as their fellow members.” This means, among other things, that influencers will be eligible for pension and health benefits, provided they satisfy the eligibility requirements. (You can learn more about those requirements here and here.) It also means that influencers who choose to become full members of SAG-AFTRA will be bound by the union’s Global Rule One. Global Rule One provides, in the union’s own pithy summary, that “a SAG-AFTRA member must always work under a union contract around the globe.” If an influencer with SAG membership violates this rule by taking non-union gigs, she could face disciplinary actions (and possibly a suspension or even expulsion). What happens if an influencer who elected to become a union member wishes to work on a project that doesn't qualify for coverage under the new Influencer Agreement (e.g., a project for a car company that requires her to appear in videos driving in the countryside with her best friend)? The union's position would be that the performer must find a way to ensure that the project is covered under the applicable collective bargaining agreement (in its view, SAG-AFTRA Commercials Contract). Practically speaking, the influencer would have two options. The influencer's company (or the brand) could obtain from the union an OPO contract under the SAG-AFTRA Commercials Contract, assuming they qualify. (For more information on this option, click here.) Alternatively, the influencer company could engage a third party signatory company to co-produce the content in question. (See this post.) This is a complication that some influencers may not be anticipating.
10. There are rumors that a new waiver applicable to influencers may be issued under the SAG-AFTRA Commercials Contract. At this time, we can't confirm the rumors, and the Fact Sheet is silent about this. To say the least, such a waiver would be of great interest to SAG-AFTRA Commercials Contract signatories.
We will continue to keep you updated with related developments – stay tuned.