What is a Pay or Play Contract?
A “pay or play” contract is the informal term for a unique legal guarantee agreement used in the entertainment industry. Producers can use this type of contract to retain the services of an individual, such as an actor, director, or other key role in a film. Unless explicitly limited in the terms of the contract, the key aspect of this agreement is the producer’s unconditional promise to pay the individual, even if the film never goes into production.
To break down the meaning and legality of the term pay or play, Assemble reached out to Brent Turman, a partner at the full service firm of Bell Nunnally & Martin. Turman is a trial lawyer and entertainment attorney based in Dallas, Texas.
The Purpose of the Pay or Play Clause
The purpose of this clause is to get key talent services, such as an A-list actor, on board with your project when the producer may not have any other viable way of doing so.
The Contents of a Pay or Play Contract
The contract can include almost any term, as long as both sides are able to agree on it. The producer will want to include specific conditions to give themselves flexibility or limit the legal obligation to pay the talent. The legal term for this is “conditions precedent.”
Turman went into more depth.
“For example, these conditions could include language explaining that certain conditions—such as the project being fully funded—have to be met in order to trigger the producer’s legal obligation to pay the talent. Admittedly, this type of condition undermines the ‘pay or play’ concept of the agreement. But, if both sides agree to the terms and sign the contract, then the contractual language dictates how their business relationship works.
The producer may also want to tailor the agreement to give her flexibility with the timing of how long talent must be available for the film or when funds must be paid. Further, there are also other contractual provisions, which are not unique to pay or play agreements, that may be useful. These include moral clauses, force majeure clauses, and others. And let’s not forget the most important term: the amount of money. The producer would be wise to negotiate for a reduced dollar amount that she would be required to pay the talent in the event the film does not go forward for any reason.”
The Pros and Cons of the Play or Pay Contract
Can you use a Pay or Play Contract Template?
With any film and TV industry legal document, it’s most advisable to utilize the services of an entertainment law firm. Although templates or boilerplate contracts do exist online, Turman stressed that producers should rely on them at their own peril.
“Every business deal is unique, and the specific considerations relating to the producer’s deal may or may not be addressed in any “sample” or “template” a producer may be able to obtain. I’m a trial attorney, and I have had multiple situations where my clients have to go to court over contracts based on a “sample” or “template” contract that was not a good fit for the specific business arrangement. Seeking an attorney’s assistance on the front end is going to be more expensive than using a free template. But, if things go sideways, it could save a lot of money (and stress) in the long run.”
Recent Example of the Pay or Play Clause
Actor Johnny Depp might have 99 problems in regard to his personal life, but money isn’t one of them. Attached to the third installment of the franchise Fantastic Beasts and Where to Find Them (Fantastic Beasts 3), Depp had a pay or play contract, under which he would be paid $16 million, even if the film was never made, or if he was recast for any reason.
In 2020, Depp lost a highly-publicized libel trial in the United Kingdom, which included allegations of domestic violence when married to his ex-wife Amber Heard. Publicity relating to Depp’s trial was obviously not helpful for the marketing and promotion of this film. However, Warner Brothers did not have an “out” in the contract, primarily because the contract did not include a morals clause that they could argue Depp violated.
As a result of the trial, Warner Brothers made the business decision of asking Depp to leave the film franchises, and be replaced by another actor. Despite shooting only one scene for the film, Depp received $16 million.
Actor Debra Winger revealed her experience with cashing in on a pay or play clause in a recent interview with The Telegraph. Her circumstances were much different than Depp’s. Winger was originally cast in the Geena Davis role in A League of Their Own, the 1992 Penny Marshall film about the All American Girls Professional Baseball League, but it was her desire to exit the project.
According to Winger, she had spent three months training with the Chicago Cubs in order to play pitcher Dottie Hinson. However, when Madonna landed the role of “All the Way” Mae Mordabito, Winger left the movie after accusing director Penny Marshall of “making an Elvis film.”
While Geena Davis was ultimately cast in the role, Winger divulged that she still received a paycheck due to her “pay-or-play” contract. She exited the movie, but the pay-or-play clause made sure she was not released from the contract obligations. She got paid.
“The studio agreed with me, because it was the only time I ever collected a pay-or-play on my contract. In other words, I collected my pay even though I did not play, and that’s very hard to get in a court,” said Winger.
Pay or Play Provisions Wrap Up
While a contract that guarantees the actor will get paid may help you land top notch talent, it comes with inherent financial risks. Weigh the risk vs. reward and as with anything legally binding, it’s advisable to have an entertainment industry lawyer create or at least review the pay and play provisions found in the contract before it is put into use.