Welcome and introductions

Catie Colucci: Hello everyone. Welcome to our webinar on the SAG-AFTRA 2025 Commercials Contract changes. I am Catie Colucci, the VP of Client Services at CMS Productions, and I am joined by Boryana Marquez and Lori Hunt from ART Payroll. CMS and ART work closely together on SAG-AFTRA productions, and we are going to share how our services complement each other toward the end of this presentation. I will turn it over to Boryana to introduce yourself.

Boryana Marquez: Thank you, Catie. Hi everyone. I am Boryana Marquez, talent payroll manager here at ART Payroll.

Lori Hunt: Hi everyone. I am Lori Hunt. I am the talent payroll manager at ART Payroll. Nice to be here.

Catie Colucci: Today we are going to talk about the key updates to the 2025 Commercials Contract, including AI rules, wage increases, use fee changes, pension and health updates, and more. We will also cover cost saving tips and answer some frequently asked questions throughout. First we will talk about what is new, the most impactful contract changes, weaving frequently asked questions through each topic. Then we will discuss top tips for reducing production costs, and give a quick summary of who CMS and ART Payroll are, how we partner together, and how we can help support your production.

Wages and fees

Catie Colucci: Every three years, the Commercials Contract is renegotiated by SAG-AFTRA and the Joint Policy Committee, or JPC. For 2025, wage increases are staggered across the term. This is new. Prior to 2025, the rate increased at the beginning of each three-year contract term and stayed at that rate throughout the three years. This is the first time under the Commercials Contract that the rates increase each year. April 1, 2025 is the start of the current contract, and the rate increased 5 percent. On April 1, 2026, the rate will increase an additional 4 percent, and in 2027 an additional 3 percent, for a total of 12 percent over three years.

There were also increases to other fees throughout the contract. Certain use types increased, which we will cover in the usage section, and allowance fees also increased, from wardrobe allowances to hazard pay. What did not increase are Class A rates, cable rates, streaming rates, and the new traditional digital plus paid YouTube category, which we will also cover under usage.

Question: Do the increases apply to renegotiations?

Catie Colucci: Yes. If a commercial spot is renegotiated under the new contract, the new rates apply. Now I will turn it over to Boryana to talk about the maximum period of use.

Maximum period of use

Boryana Marquez: The maximum period of use has increased to 24 months. It now starts 10 business days after the start of on-camera principal photography.

Question: When do the holding fees begin?

Boryana Marquez: The first fixed cycle begins on the first day of production, and holding fees are due 13 weeks thereafter. Something to note: the MPU timing and holding fee cycles do not always align now, so it is important to track both carefully. Next we have restrictions on use and takedowns, which Lori will take us through.

Restrictions on use and takedowns

Lori Hunt: If a campaign has no exhibition and remains tied to the original post date, new use payments are not triggered if the spot is taken down upon request.

Question: If a spot remains online beyond the paid cycle, but within the MPU, are additional payments due?

Lori Hunt: Yes. You must negotiate additional cycles until the MPU is reached. Now Catie is going to walk us through editing.

Editing

Catie Colucci: In 2022, with the contract updates, we saw a whole new editing system. It was much more defined than in prior contract years. That is where we learned about shorter and longer versions, paid edits, and addressable edits. In 2025 there are not too many changes to the editing provisions, but I will take you through a couple.

Performers who record scripted alternate scenes or lines shall be compensated an additional session fee, which may not be credited. Similarly, performers who render services to make paid edits shall be compensated a session fee for each such product change, which may not be credited against use. As part of the CMS Productions process, we review scripts, storyboards, and edits that are not final yet, and we can help determine what is a paid edit, what is a shorter or longer version, and what is an addressable edit. We help make those determinations during the production process.

Another update has to do with shorter and longer versions. SAG has added the words "same length versions," so you could have a 60-second spot with a 30-second shorter version and another 30-second same-length version, and that is allowable. To quickly summarize the shorter and longer version rule, which has been in effect for some years: the first two shorter or longer versions are free, the third is an additional session fee, and the fourth and beyond are 30 percent of a session fee.

The last update to the editing rules has to do with advertiser libraries and expanded editing rights. A producer may submit a commercial to an advertiser's advertising library or other platform used to manage ads, and the performer will receive four additional session fees for unlimited shorter, longer, or same-length versions during the maximum period of use, on traditional digital only. The producer also has the option of paying the principal performers seven additional session fees for unlimited editing rights during the MPU, beyond shorter, longer, and same-length versions, for traditional digital only. Next, Boryana will talk about late payment penalties.

Late payment penalties

Boryana Marquez: Producers must now be notified in writing if payment is not made by the 25th day after the due date. This means that late fees accrue after the 25th day, and email counts as written notice.

Question: Are late fees due without union notice?

Boryana Marquez: Yes. Notice is not the trigger; the late status is.

Catie Colucci: I have had similar situations where invoices ran past the 25 days, and late fees start to accrue at $13.09 a day per performer. Those add up quickly, especially with a large cast. So it is more important than ever to get payments made on time. Now we are going to talk about updates to pension and health, which Lori will touch on, and then I will expand a little further.

Pension and health

Lori Hunt: The pension and health rate increased from 20.5 percent to 23.5 percent, and that is quite a big increase, especially with large guaranteed deals.

Catie Colucci: I am going to talk a little about multi-service contracts. There are a couple of updates. The first has to do with what is included in gross compensation when calculating pension and health. Gross compensation does not include publicist fees, hair, makeup, and wardrobe costs, travel expenses, or other allowances. With the new contract, agency fees are no longer included in gross compensation, provided they are specifically carved out as separate compensation in the multi-service contract. As long as the agency fee is clearly itemized and not bundled into the performer's base compensation, it will not be subject to SAG pension and health contributions.

However, if a contract includes a "plus 10 percent" agency fee, which we often see with scale talent, and there is no indication that the 10 percent will be paid directly to an agent, then the full amount is treated as gross compensation and is all pensionable. This breakout of agency fees is something we usually see in celebrity, influencer, and overscale agreements, where the agency fee is specifically itemized and clearly not included in the gross compensation that goes to the talent.

The next change has to do with allocation. Under the Commercials Contract, the standard multi-service allocation, according to the guidelines published by SAG-AFTRA, is 50 percent when SAG-covered and non-SAG-covered services are part of the same contract. In 2025, there is a new option for a 40 percent allocation for commercials produced without linear, paid YouTube, or streaming. If the sole use of the commercial is traditional digital and/or theatrical/industrial, and no other SAG-covered services are included in the contract, we can take advantage of that 40 percent allocation. This can be a big savings, especially on large deals. Now I will turn this over to Boryana to speak on per diem.

Per diem

Boryana Marquez: Per diem is now paid on the first workday, which includes travel days, and the performer may choose cash or digital as the form of payment.

Minors, zones, and extras

Lori Hunt: In the new contract, there are stronger protections for minors, which is a good thing, including required background checks for teachers, tutors, and welfare workers, and the option to run background checks on other adults interacting with minors, including talent. The age of a minor has been increased to 17 years of age or younger. It used to be 15. There is also new language that reflects the number of hours minors must be schooled based on their age, and several other changes in the MOA dealing with minors and school requirements. If this is a type of production you do often with children, you might want to spend some time on that section.

Austin, Texas was added as a preference zone and an extra zone, with a 100-mile radius from the city center. Under the extras section, there used to be an option to pay a slightly lower session fee for a 13-week limited use rate, and that was eliminated. It was rarely used.

Catie Colucci: In 15 years of me being at CMS, we had never used that limited extras rate. So there is now just the unlimited use rate, which is what everybody is used to anyway.

Use structure changes

Catie Colucci: There are several use types where rates did not increase. Class A and cable rates remain the same as they were in 2022, which is nice, because they were raised quite a bit then. Wild spot now includes Chicago as a major market. It was a major market prior to 2022, was removed, and is now being added back.

There is a new category of cable use for single cable networks. There are quite a few network exclusions, but it is a discounted rate and a nice alternative to paying the national cable rate. The exclusions include ESPN, TNT, TBS, USA, Fox News, and several other major networks. When CMS is involved in the initial estimating phase, this is something we need to know if the media plan is set: exactly which cable networks are going to be used, because we cannot take advantage of the single cable network rate if one of the exclusions is included.

There are also now local cable rates tiered by the number of subscribers. There are three categories: up to 1 million subscribers, 1 to 2 million, and 2 to 3 million. The rates scale between those three, so up to 1 million subscribers is a little cheaper than the 2 to 3 million category.

The last update is to traditional digital, which now has two tiers. Traditional digital is websites, social media, and unpaid YouTube.com. The new category for 2025 is traditional digital plus paid YouTube, which covers ad buys on YouTube.com, and this is more expensive than traditional digital. Streaming, which was introduced as a category in 2022, remains a separate, higher-priced category, but it does include traditional digital and YouTube. YouTube TV, for example, falls under the streaming category. When we are estimating costs for your commercials, it is important to know whether you are going to include paid YouTube.com, YouTube TV, or unpaid YouTube, because those are all different categories and different rates. Holding fees may not be credited against traditional digital or traditional digital plus YouTube unless linear or streaming use is purchased.

Question: Can a producer upgrade from use payments for a single cable channel to national cable use?

Catie Colucci: Yes. Provided you are in an active single cable channel cycle, you can upgrade by paying the difference, and the cycle end dates remain the same.

Question: If a commercial is produced on the linear plus streaming side of the contract, launches within one year on traditional digital, a holding fee is paid, and thereafter the advertiser's intended use changes so that no linear or streaming will occur, can you release the commercial and initiate a new traditional digital use cycle?

Catie Colucci: Yes. You may initiate an additional consecutive traditional digital use cycle, but the performer will no longer be exclusive and must be released. Moving on to the next new category, artificial intelligence, which Boryana will discuss.

Artificial intelligence

Boryana Marquez: These are very new categories. Under artificial intelligence, we have two new categories: digital replicas and synthetic performers. Digital replicas are based on a performer's likeness and performance. The use of a digital replica requires notice and consent from the performer, and the performer receives a payment of 1.5 times the scale session fee, plus scale use and holding fees. These are payments issued to the performer.

Synthetic performers are fully digitally created assets that are not based on any single individual human performer. A synthetic performer may only be used in a commercial that also has a human on-camera principal. The producer pays pension and health based on 1.5 times the scale session fee, plus pension and health on scale use and holding fees, all contributed to the SAG-AFTRA plans.

This is all very new. We are still learning the ins and outs of how to apply the AI rules to commercials. We do know that the union has made it very clear that consent is essential, and if a synthetic performer appears without a human performer, the producer has to negotiate contributions directly with SAG-AFTRA. Next up, Lori is going to talk about audio commercials.

Audio commercials

Lori Hunt: Audio, also known as radio, has the same staggered increases per year that the TV contract has: 5 percent in the first year, 4 percent in the second year, and 3 percent in the third year. They updated the terminology by eliminating the "made for" and "move over" language for internet and new media and combined them into two types of digital use. Traditional digital covers use on social media and websites, and digital plus covers traditional digital plus streaming audio platforms like Spotify, YouTube Music, and Pandora.

The MPU has also been extended to 24 months. The audio flex rates, which are not new and have been around for some time, are now incorporated into the contract. They offer a slightly higher session fee but more flexible use structures, and you can credit the session to digital use, unlike digital uses under the regular audio provisions, where you cannot.

Tips for reducing production costs

Catie Colucci: We at CMS Productions love to help our clients save costs wherever they can. One way is to leverage multi-service contracts. This comes into play with celebrity, influencer, and overscale talent who are paid a lot of money. We can maximize the value from talent by structuring usage across multiple assets and deliverables. If a performer shows up to a production day to film a commercial and does no other services, 100 percent of their fee is subject to SAG pension and health. But if their contract is structured so that non-SAG-covered services are part of it, which is anything not on camera or voice recording, such as a photo shoot, social media posts (although there are separate, tricky rules about social media posts), product collaborations, or media days, it qualifies as a multi-service contract. The plans and SAG-AFTRA have published allocation guidelines. As I touched on earlier, 50 percent is the most common allocation for multi-service contracts, and there is now the new 40 percent for commercials with traditional digital and/or theatrical/industrial use only. CMS does this in the very early stages of production, reviewing multi-service contracts and helping structure them so we can take advantage of these rules.

Another strategy is using editorial flexibility. The editing provisions for shorter and longer versions and paid edits can extend the life of your creative. If budget is tight but you want to create multiple assets, you can take advantage of the editing rules to make shorter, longer, or same-length versions, or paid edits, which change the color or size of something to make it slightly different without changing the message of the commercial. This is definitely something that gets taken advantage of quite a bit.

The last one is to plan ahead. Share scripts and storyboards with CMS and ART so we can review up front, estimate costs, and give you the correct use categories. All of this helps manage future residuals and holding fees and helps the efficiency of the production process all the way from pre-production through post. Planning is very important.

How CMS and ART Payroll work together

Catie Colucci: That ends the updates to the 2025 Commercials Contract. I will quickly give you a rundown of who CMS and ART Payroll are and what we do. CMS Productions is a third-party SAG-AFTRA signatory. We are signatory to the Commercials Contract, the Corporate/Educational agreement, and the Interactive Media contract. We support productions end to end, from pre-production through post. We prepare talent cost estimates, review scripts and storyboards to help determine the number of talent that need to be included in your commercial, get involved in talent contract negotiations, review talent contracts, and handle all SAG compliance, including residual and holding fee tracking, making sure the full process from pre-production through post is SAG compliant.

ART Payroll is an advertising and entertainment payroll service. They assist clients with navigating talent and crew payroll across various types of productions, including SAG-AFTRA and Actors' Equity. We work very closely with ART for payroll processing, tracking guarantees, and other SAG compliance. We love the knowledge that we both bring each other when it comes to SAG-AFTRA, and especially navigating the quite complicated Commercials Contract.

Closing

Catie Colucci: If you have any questions about anything from this presentation or any of the other contract updates, please feel free to reach out to me, Catie Colucci. My email is catie@cmsproductions.com. You can also check out our website, cmsproductions.com. Thank you so much, Boryana and Lori, and thank you to everyone else for joining.

Lori Hunt: Happy to be here. Thank you.