How to know what a buyout is
Buy outs are basically a flat fee for all the work done on a production. This means that the actor will recieve no residuals or repeat fees if the work is used/shown again after the original contract. Also, the company has complete ownership of your image/voice to use as they please.
There is much debate over the fairness of buy-outs and many maintain that fees are getting lower and lower. However, some buy-outs for commercials with high audience exposure or for a multi-national campaign can be very lucrative.
There is a very useful website http://www.usefee.tv which is supported by the Personal Managers' Association, the Association of Model Agents and British Actors' Equity. This website calculates commercial fees based on TVRs (TeleVision Ratings) and is useful to visit if you are offered a buy out fee for a TV commercial. The difficulty comes when trying to establish the correct TVR information without ruffling too many feathers!
usefee.tv states that:
The accepted method of paying a featured performer for his/her services in a British television commercial is a Basic Studio Fee ("BSF") for studio work plus use fees (or "repeat fees") based on the size of the audience seeing the commercial ("TeleVision Ratings" - or "TVRs").
This method of payment is the only one approved by the actors' union Equity, the Personal Managers' Association (the PMA) and the Association of Model Agents (the AMA).
The Casting Directors' Guild (the CDG), comprising the vast majority of reputable casting drectors, also supports this method of payment and even the Institute of Practitioners in Advertising (the IPA) during their dispute with Equity acknowledged that the use fees paid to visual performers (by this method) were "about right".
They go on to say:
If you are offered a lump sum for usage then try to establish what the TVRs are so that you can judge whether what you are being offered is appropriate.
Ideally, for UK commercials you should only accept a lump sum if it is expressed on the contract as as an advance payment against an agreed number of TVRs. If the commercial is brought back at a later date, and it has exceeded the agreed number of TVRs, you should then receive further use fees. You will need to ask how many TVRs are being bought for the sum offered.
usefee.tv provide an online calculator to help you work this out where you simply enter the Basic Studio Fee and the number of TVRs.
Also Equity produces a booklet "Equity Guide to Working in TV Commercials" which is full of useful advice. If you are an Equity member you can ring for a copy or read it on the members only area of the Equity Website under TV Commercials.
Buy out contracts can be complicated and it is a good idea to seek advice from your union (such as Equity) and your Agent. Equity will always give members advice on contracts whether they are Non Equity or Equity contracts.