Pay or play
A pay or play clause guarantees an actor, director or other talent their agreed fee once certain conditions are met, whether or not the producer actually uses their services. The producer can choose not to "play" them, but must still "pay".
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Sample Pay or play clauses
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.
Source
INSPERITY, INC. (NSP)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.
Source
FRESH GRAPES, LLC (VINE)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.
Source
INSPERITY, INC. (NSP)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.
Source
Endexx Corp (EDXC)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.
What is a pay or play contract?
A pay or play contract is an agreement in which a producer or studio guarantees to pay an actor, director, writer or other talent their agreed fee, whether or not it actually uses their services. The producer keeps the right not to use them (“play”), but once the deal is pay or play, it must still pay.
It is standard in film and TV deals. Talent turns down other work to keep dates free, and the guarantee compensates them if the project is cancelled or they are replaced.
How does pay or play work?
- The deal is signed with a fee and the dates the talent must keep free.
- Conditions are met, usually full financing, approval of the script, budget and start date, or a specific date.
- The deal becomes pay or play: from now on, the fixed fee is guaranteed.
- The producer decides: it can use the talent (“play”) or not.
- Either way, it pays the fixed fee. It usually does not owe contingent payments, such as bonuses or backend, if the talent is not used.
What does pay or play mean in a contract?
It means the producer’s obligation is to pay, not to use. The talent cannot insist on appearing in the film or demand damages for lost publicity; its remedy is the guaranteed fee. This protects the producer’s creative control, because it can still recast or cancel, while protecting the talent’s income.
Pay or play vs. other guarantees
| Deal type | What is guaranteed | Where it is used |
|---|---|---|
| Pay or play | The fixed fee, whether or not the talent is used | Film, TV, music |
| Take or pay | Payment for a minimum volume, whether or not it is taken | Energy, commodities, supply |
| Minimum commitment | A minimum amount of purchases or fees | SaaS, supply, services |
“Pay or play” is also the name used for the employer mandate under the US Affordable Care Act, where large employers (50 or more full-time employees) either offer health coverage or pay a penalty. That is a legal rule, not a contract clause.
What a pay or play clause should include
- Trigger: the conditions or date when the deal becomes pay or play.
- Guaranteed amount: the fixed fee, and how it is paid if the talent is not used.
- Excluded payments: bonuses, backend and credit obligations that only apply if the talent is used.
- Dates and exclusivity: which dates the talent keeps free, and when it can accept other work.
- Credit: whether the talent gets credit if not used (usually not).
Pay or play clause example
Sample clause: Pay or play
Add this clause to a contract, send it and get it signed in fynk.
Use it in fynk for freeHow to track pay or play triggers
A deal that turns pay or play on a date nobody noticed can cost a production the full fee. In fynk, trigger dates and guaranteed fees are fields in each talent agreement, the contract calendar shows every upcoming trigger, and dashboards total the guaranteed commitments across a slate.
Which contracts contain a pay or play clause?
Actor, director and writer agreements, first-look and overall deals, music and touring agreements, and some sports and event contracts. This free template refers to pay or play commitments:
Free templates with this clause
Related clauses
- Minimum Commitment A Minimum Commitment clause in a contract obligates a party, typically a buyer, to purchase or use a specified minimum quantity or level of services within a defined period. This clause ensures a baseline level of engagement or business for the provider, and often involves financial penalties or adjustments if the commitment is not met.
- Termination for convenience The "termination for convenience" clause allows one party to unilaterally terminate a contract without cause, typically requiring specified notice and potentially incurring a penalty or termination fee. This provision provides flexibility by enabling parties to exit agreements for strategic or unforeseen reasons without alleging breach or fault.
- Liquidated damages Liquidated damages are a predetermined sum agreed upon by the parties to a contract, payable in the event of a specified breach, serving as compensation for losses that are difficult to quantify. This clause aims to provide certainty and avoid lengthy legal disputes over actual damages while discouraging breach of contract.
- Exclusivity An exclusivity clause is a contractual provision that restricts one party from engaging in certain activities or dealings with other parties outside the agreement. Typically used to secure a commitment, it ensures that the party provides services, products, or rights solely to the other contracting party, often to maintain competitive advantage or preserve confidentiality.
Frequently asked questions
That an actor or director gets their agreed fee even if the studio decides not to use them or cancels the film, once the deal has become pay or play.
When the conditions in the contract are met, often when financing closes, the start date is set, or the talent approves the script and budget. Some deals are pay or play from signing.
Yes. The producer can replace or not use them, but still has to pay the guaranteed fee. That is the point of the clause.
Pay or play guarantees talent their fee. Pay for play usually means paying to get something featured, such as paying for radio airplay, and has nothing to do with this clause.
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