A "pay or play" clause in an entertainment contract guarantees that the artist or talent will receive their payment, regardless of whether the project moves forward or is ultimately canceled. This clause ensures financial security for the talent by obligating the producer or studio to compensate them even if their services are not utilized.
Producer owns the exclusive screen rights to adapt the Book into a feature film or series and thereby makes the following pay or play offer to Writer pursuant to the following proposed terms: The first step is guaranteed, with the 2nd step conditionally guaranteed as defined below in paragraph 2.b.i and the 3rd step and 4th step being optional and being subject to the bonus provisions below at paragraph 3a, b & c.
Notwithstanding anything to the contrary contained herein, if the Safehaven series is actually produced, the minimum guaranteed executive producer fee and development fee shall be Four Hundred Thousand Dollars ($400,000), on a pay or play basis.
Effective January 1, 2015, “pay or play” requirements applied to large employers with at least 50 full-time and full-time equivalent employees in the prior calendar year (“Applicable Large Employers” or “ALEs”). ALEs who fail to offer “minimum essential coverage” satisfying minimum value and affordability requirements may be subject to a penalty if a full-time employee obtains coverage from an Exchange and receives a subsidy or tax credit for such coverage. While clients are responsible for employer pay or play health care mandates under the CSA, the Insperity-sponsored group health plan qualifies as minimum essential coverage and is designed to satisfy the minimum value and affordability requirements. Clients are not required to use the affordability safe harbor utilized by us.
Compensation: In consideration of the Services and rights granted herein, Company shall grant Licensor the following compensation, on a pay or play basis: a. one hundred fifty six thousand five hundred (156,500) Class F Units (as defined in Company’s limited liability company agreement dated as of March [*], 2020 (“Operating Agreement”) upon: (i) full execution of this Agreement; and (ii) Licensor’s execution of the Operating Agreement and b.vA license fee of $300,000 per year starting on the first anniversary of the Effective Date.
Additionally, the pay or play penalties on Applicable Large Employers were fully phased-in by 2016.
The regulation adopted a “pay or play” mechanism for compliance with the mandatory contribution to the SU Fund.
Pay or Play; Development. (a) Enter into (or allow to exist) any pay or play commitment for an Item of Product which has been “green-lit” prior to establishing a Production/Acquisition Cost Reserve for such pay or play commitment. (b) Pay or incur any development costs with respect to any rights or scripts in any potential content contemplated to take the form of a Picture or a Program in any fiscal year in excess of the following amounts with respect to the fiscal years set forth below (the “Development Cost Cap”) (it being understood that once an Approved Completion Bond, if required, has been received for a Picture or principal photography has commenced for any other Item of Product, all costs included within the Budgeted Negative Cost) will no longer be treated as development or production costs for purposes of this Section 6.24(b): Fiscal Year Ending Amount September 30, 2016 $8,000,000 September 30, 2017, and in each calendar year thereafter $10,000,000 provided that, if for any fiscal year development costs are less than such year’s Development Cost Cap (the difference being referred to herein as the “Picture/Program Development Carry-Over Amount”), then the Development Cost Cap for the immediately succeeding year shall be increased by the Picture/Program Development Carry-Over Amount; provided further, that the Picture/Program Development Carry-Over Amount shall be deemed the last dollars spent toward development costs in any fiscal year and, for the avoidance of doubt, the Picture/Program Development Carry-Over Amount may not be carried over for more than one fiscal year; provided further, that the Credit Parties may pay or incur development costs in excess of the Picture/Program Development Cost Cap in any year to the extent of any amounts recouped from the sale or license of any development property (such amounts not to exceed the Credit Parties’ actual development cost with respect to such development property), and once used, such recouped amount shall no longer be available to pay or incur additional development costs.
Pay or Play. In the event that PAPA JOHN’S fails to utilize any or all of the Services as and when the same are allocated and/or scheduled pursuant to the above (e.g., within a particular Contract Year), then: (A) the same shall not result in a reduction in any amounts due and/or payable to ABG hereunder, and (B) PAPA JOHN’S shall be deemed to have waived its right to utilize those particular Services (e.g., Service Days that are allocated for a particular Contract Year may not be carried into future Contract Years, or beyond the expiration or early termination of the Term) without ABG’s Approval.
Pay or Play. Company will not be obligated to produce, release, or otherwise use any Materials produced hereunder, and Company only obligation to Furnisher and Talent hereunder shall be to pay Furnisher/Talent the compensation set forth herein (including without limitation all Guaranteed Payments) and in the Operating Agreement.
Pay or Play is a contractual clause commonly used in the entertainment industry, predominantly in film and television production agreements. It guarantees the talent (actors, directors, writers, etc.) that they will receive payment even if the project does not proceed or if they are released from the project before it commences. This clause provides financial security to the talent by ensuring compensation irrespective of the project’s fate.
You should consider using a Pay or Play clause in situations where:
When drafting a Pay or Play clause, it is essential to be clear and explicit about the terms. Important elements to include are:
Example of a Pay or Play Clause:
“The Producer agrees that in the event the Artist is released from the project for any reason not attributable to the Artist, or if the project is canceled before principal photography commences, the Producer shall pay the Artist a fee of $X, as full compensation for the Artist’s commitment.”
Pay or Play clauses are typically found in the following types of contracts:
These clauses reflect the unique risks associated with the entertainment industry and help mitigate uncertainties involved in project development and production.
Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The "Payment for services rendered" clause outlines the terms and conditions under which payment is made to a service provider for the work completed or services provided. It typically specifies the amount, payment schedule, method of payment, and any conditions or penalties related to payment delays or disputes.
Payment provisions outline the terms regarding compensation for services or goods, specifying the amount, currency, method, and schedule of payments. They also detail conditions for late payments, such as interest or penalties, and any requirements for invoices or documentation.
Payment terms and conditions outline the specifics of how and when a party will be compensated for goods or services provided. They typically include details on the payment method, due dates, any interest or penalties for late payments, and any discounts available for early payments.
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