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Dealing With the Implications of Pay-or-Play Agreements for Talent

BY Sunny Brenner
September 13, 2003

Disputes arising out of 'pay-or-play' deals between film producers and talent are among the most fertile and reliable breeding grounds for litigation in the entertainment industry. In the last year alone:

  • Sharon Stone filed a lawsuit against two producers based on an alleged pay-or-play agreement to pay her $14 million to star in a sequel to the movie 'Basic Instinct';
  • Sean Connery sued Mandalay Pictures and its chairman for allegedly breaching an oral agreement ' which presumably entailed a pay-or-play or 'pay-and-play' commitment ' to pay the actor more than $17 million to star in and produce a thriller called 'End Game';
  • Sean Penn and producer Steve Bing exchanged lawsuits in connection with an as-yet-unproduced motion picture, with Penn accusing Bing's company of breaching a pay-or-play commitment of $10 million; and
  • Kathy Bates reportedly settled a lawsuit that accused a producer and his production company of breaching a pay-or-play guarantee to pay the actress $1.25 million whether or not her services were utilized in the film 'Carolina Torn Asunder.'

And for every dispute that results in the filing of a lawsuit, one can safely assume that there are several more being fought out behind the scenes, and either arbitrated or settled.

From a practitioner's standpoint, it might be asked why the same basic deal point gives rise with such frequency to high stakes lawsuits, particularly given the widespread agreement in the industry on its meaning. Simply put, and as various courts that have been called upon to construe pay-or-play language have found, a pay-or-play commitment generally entails a promise to compensate a person whether the person's services are used or not.

Yet as straightforward as this concept may seem at first blush, pay-or-play agreements between talent and producers or studios frequently involve nuances and applications that, in combination with the monetary amounts at issue, can create flammable situations. While each pay-or-play dispute is factually unique, many conflicts in this area tend to share certain common traits that allow for some general observations about why misunderstandings concerning the meaning and effects of pay-or-play deals recur, as well as some ways that such disputes may be prepared for or avoided.

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