Monthly Archives: December 2012

Survivors Guide to Profit Share

Profits afloatI recently obtained a County Court Judgement against a director who decided it was acceptable to defraud his actors by some very creative book-keeping. Eventually he discovered that he had stolen from the wrong person and had to pay the price – well more than the price once the interest and court fees were added. See my blog “Cautionary Tale of Profit Share.”

Sadly, young and less experienced actors are hungry for work and so directors like Sean Fields (not his real name) continue to get away with these practices. After all, earning what amounts to less than half of the national minimum wage is better than earning nothing.

Thankfully, directors and produces like this are few and far between. Still, following that blog, I thought it a good idea to post a guide for actors so that they may not be treated the same way.

For the following guidance, I will use the term “director” when referring to whoever calculates the finances or whoever is in charge of the company; this should simplify the txt somewhat.

What is profit share?

Quite simply, “profit share” is, as it says, a scheme that allows for the whole cast and crew of a production to earn an equal or proportional share of the profits. The better ones will ensure that those with smaller roles take on extra responsibilities that will justify them receiving the same as the main cast members; another, less fair but still acceptable, method is to make complex calculations based on stage time etc.

Either way, you need to know before you agree.

In the current climate where the arts are underfunded and there is no guarantee of audiences, profit share has become a common practice. This way the producer, the director or company, while still being responsible for underwriting the expenses, will share the risk with the cast and crew so there is no guarantee for anyone of making any decent money. However, the up side is that the cast can, if the tour goes well, make a lot more than they would if they had a contracted rate.

The Contract

This is a tricky one. Many profit share arrangements are made on a handshake. This is fine in many respects. Remember that, in British law (and I think US law – please correct me if I’m wrong) a verbal contract is just as valid as a written one. A word of caution is necessary, however; make certain that all the cast members discuss the agreement together with the producer or director (or whoever will be responsible for the payments) so that there are witnesses and everything is out in the open.

Watch out for inconsistencies among the cast. I know of a project, involving the same director, in which one cast member was on a contracted rate while the others were on a profit share! The contract contained a confidentiality clause, meaning that the cast member was not allowed to disclose the details of her contract to anyone else. She ignored this and, eventually, the director agreed to give everyone involved the same contract.

So, make sure that all the cast members have made the same agreement. If one will not discuss this, then hear the alarm bells.

Another trick to use is this: make notes during the meeting; type up the notes and email them to the director and cast opening with something like “following our meeting on [date], I made the following notes. Can you please confirm that I have correctly recorded the details”.  Make sure you mark your email to receive a delivery receipt and a read receipt.

Licences

Unless the author of the play has been deceased by more than seventy years, then the company must have a licence (or permission if a new writer) for each performance. Licences vary from amateur performances to lavish, national tours; all you need to ask is, has the director/company got a licence/permission to perform.

Counting the Costs and Income.

Expenses

From the outset, you should know what the likely costs will be. There will be variable costs, such as fuel, toll fares, refreshments (if provided as a company). There will be fixed costs such as costume hire, rehearsal space, advertising, printing, theatre hire (unless they take a percentage). Make sure you ask what these are likely to be.

If the company has its own building, find out if they are charging for rehearsal space. The director mentioned had his own theatre school and charged us for the rehearsal space. This amounted to about £450 that we didn’t expect.

Theatres

You will know what theatres you are going to. Look them up on the Internet. Find out how many seats there are. What they charge for each level of audience member (adult, child, disabled, carer, group bookings) should be on the webpage. You can make a rough estimate of potential revenue from that. Don’t be optimistic – take the average price and multiply it by half the number of seats; this way, should it be a sell out, you’ll be pleasantly surprised, and you won’t be as disappointed if it falls short.

Don’t forget that the theatre will want its cut. If it hasn’t charged a flat fee, it will take a percentage of the box office takings – usually between twenty and thirty percent.

Don’t be afraid to ask the box office when you get to the theatre for a breakdown of bookings. Some theatre audiences are renowned for just turning up and paying on the night, however; in this case you can ask someone in your crew to estimate the number of attendees or, for smaller venues, you’ll be able to ask the box office later.

Never be afraid to ask a theatre what the arrangement is between them and the company. Many of them will tell you straight; the worst they can do is refuse on grounds of confidentiality.

Theatre in Education

More and more schools are opting to have theatre companies bring plays to their halls. It is less trouble than arranging a trip to the theatre and could be cheaper. It  can also be a lucrative venture for a theatre company.

What is not appreciated by a lot of people is that schools are publicly funded bodies and, as such, are subject to the terms of the Freedom of Information act. This means that they must tell you exactly how much they are paying the company. So, if you ask and they don’t tell you, send a letter or email to the head and ask for the information under the terms of the act.

Totalling it Up

Eventually you will have come to the end of the run and it’s time to get paid.

Hold on. It’s not always that simple. Theatres are not always in a hurry to part with their money and schools certainly won’t be. It is not unheard of for a school to take sixty days from issue of invoice (although not so common). Nor will the director or company be in a massive hurry to let all the cash go from their account.

While revenue would have trickled in after the first month of the tour, the company will not think it unreasonable to hold back until all of the venues have paid in full. This is likely to be about four weeks after the end of the tour. However, you may want to do your calculations and ask for a part of it. Your wish may or may not be granted.

Sooner or later you will be sent the profits breakdown from the director or producer. Now’s the time to compare your detailed calculations with the official version. There will be a discrepancy since no-one is perfect; you may have miscalculated or not taken into account all of the costs. Time to make a decision. If the difference is only a few percent, you will need to weigh up the pros and cons of challenging the figures; for such a small amount, it probably isn’t worth bothering. However, if the official version is getting on for twenty percent or more, time to ask for a detailed breakdown.

Now, in my case (see previous blog) the company director refused to discuss details. That sounded an immediate alarm bell and told me that this was no minor error and the director was hiding something. What he was hiding were two incidents of only one performance accounted for out of two, most of the revenues being under stated, a theatre hire charge that seemed to appear twice plus an additional member of the company that was never mentioned!

If the director refuses to reveal the details, then it is time to gather your evidence. Ask every venue for a complete breakdown of what was paid. Some will comply immediately, others may refuse initially and may need coaxing, others will just refuse full stop. The schools must tell you and even the theatres that will not give you the full details will provide enough information for you to do fairly accurate calculations. The rule is, always be polite and respectful.

Having gathered your evidence and made the calculation, politely contact the director and tell them of your findings and that, failing their evidence to the contrary, this is the figure that you will be invoicing for. If there is an agreement all well and dandy. If no agreement and no evidence to support their calculations then send an invoice to correspond with your calculations stating that you will expect an amount corresponding to their calculations immediately and the rest after seven/fourteen/twenty-eight days (you decide what is reasonable).

A Last Resort.

It is possible that the director will pay you the amount in full. It is equally possible that they will not. The ultimate resource you have to get your money is the court system. While this may seem like a frightenng prospect, it is quite a simple process, it costs only £35 and is fully explained on https://www.moneyclaim.gov.uk, where you can also register your claim (obviously, this is for the UK; presumably other countries will have similar processes).

In a later blog, I may describe the court process. However, I think I’ve kept you long enough. See you in the next blog.

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