Guarantee (filmmaking)

Not to be confused with Pay to Play.

In filmmaking, a guarantee is a term of an actor, director, or other participant's contract that guarantees remuneration if, through no fault of their own, the participant is released from the contract. Such an arrangement is known informally as a “pay-or-play” contract.

Many stars insist on guarantees in their contract due to the major time commitment agreeing to appear in a film can mean. For example, Kurt Russell's decision to appear in the film Soldier, for which he was paid $15 million, had a commitment of 18 months where he was not able to appear in another film. If the film was cancelled, or if he were replaced but not if he withdrew of his own accord, Russell would be paid $15 million, or a large part of that fee, to compensate him for clearing his schedule.

Studios are reluctant to agree to guarantees but accept them as part of the deal for signing major talent. They also have the advantage of enabling a studio to simply remove a participant under such a contract with few legal complications.[1]

Examples of “Play-or-Pay”

Similar clauses outside of filmmaking

Additionally, elements of guarantee clauses can be found in other industries, under different names. In the sports world, standard player/coach contracts are guaranteed for the life of the deal, regardless of whether the player or coach actually works for the full duration; hence the name for such contracts being guaranteed contracts. In another example, if a baseball player is signed to a 5-year, $30 million deal but is cut by his team after year 3, the team will still owe the player the balance of the $12 million due, regardless of whether the player is performing services for that team or another team. For example, in 1996, when Kirby Puckett suffered a career-ending glaucoma in his right eye, he was only two years into a five-year, $15 million contract; he was then paid for the subsequent three years. The balance owed can be mitigated if the player signs with another team, with the balance owed by the cutting team subtracted from the amount paid by the new team. A notable exception to this rule is in the NFL, where only the bonuses outlined in player contracts are guaranteed. NFL players are not guaranteed the salaries outlined in their contracts; they are only paid the salaries outlined while they are actually still employed by their team.

In the business world, high-level executives are often guaranteed to receive their salary for a specified period of time outlined in their contract, regardless of whether the company continues to employ them or not; a so-called golden parachute. Similar clauses are often negotiated during mergers and acquisitions to protect the management team that is being merged or acquired into the new company.

References

  1. Navigating The "Pay Or Play" Minefield, The Business Of Film October 1997.
  2. Bob Hoskins paid not to play Capone
  3. Maurice LaMarche, Tom Ruegger et al. (2006). Steven Spielberg Presents Animaniacs: Volume 2. Special Features:The Writers Flipped They Have No Script (DVD). Warner Home Video.
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