What are 'Residuals' or 'Adjustments' and why do they matter to actors and stunt performers?

While we perform and act out of a passion for the craft and the industry, it's important to ensure we're taking care of business and maintaining a healthy income, so we can afford to continue! In this article, we'll explore the concept of 'Residuals' and why they matter for actors, stunt performers, and other creatives in the industry.

What Are Residuals?
In the film and entertainment industry, residuals refer to payments made to actors, stunt performers, writers, directors, and other creatives for the reuse or rebroadcast of their work. These payments are made when a film, TV show, or commercial is distributed after its initial release—be that via television reruns, online streaming platforms, DVD sales, or syndication to other networks.

Residuals are a form of ongoing compensation that continues long after the initial project has been completed. They are calculated as a percentage of the revenue generated by the project and serve as a way to ensure that creatives continue to earn from their contributions to a project that is still generating income for studios, production companies, or distributors.

Why Residuals Matter
Residuals are a key source of income for many actors and performers, especially in the TV industry, where shows can be aired repeatedly for years. This extra income can be particularly beneficial when work is scarce, and it provides financial stability, which is often missing in the unpredictable nature of the entertainment industry.

For example, let’s say a performer worked on a TV show that’s now being streamed on Netflix or aired in syndication on another network. Each time that show is viewed or broadcast, the actor or stunt performer earns residuals based on the revenue generated by that medium (such as subscriptions or advertising).

The Origins of Residuals
Residual payments were first introduced in the 1950s as television was growing into a dominant form of entertainment. Initially, shows were broadcast live, but as reruns and recorded content began to be resold to networks, it became clear that performers should be compensated for the continued use of their work.

The Screen Actors Guild (SAG), along with other industry unions, played a critical role in establishing residual payments for actors and performers. This ensured that those who contributed to successful projects would continue to earn income, even after their primary work on the project had ended.

How Are Residuals Calculated?
Residuals are calculated based on various factors, including:

1. The medium of distribution: The amount of residuals varies depending on whether the project is being rerun on cable TV, sold as a DVD, or streamed online.
2. Union agreements: Most residuals are based on union contracts. For example, actors who are members of SAG-AFTRA (Screen Actors Guild - American Federation of Television and Radio Artists) have specific residual structures that guarantee a minimum residual amount for different types of media.
3. Role and Contribution: Lead actors, supporting actors, and stunt performers may earn different percentages of the residuals, with higher payouts generally reserved for more prominent roles or larger contributions.
   
   

Example of Residuals in Action
To illustrate, let’s say a lead actor in a film negotiates to receive 3% of gross box office revenue as residuals. If the film grosses $100 million, the actor would receive a residual payment of $3 million. However, background actors, extras, and certain stunt performers might only receive a one-time payment or lower percentage, depending on their union contracts and level of contribution.

The Importance of Residuals for Stunt Performers
Stunt performers can also earn residuals, especially for projects that involve frequent reruns or home video sales. Since stunt work often involves intense physical risk, residual payments serve as compensation for ongoing use of their image and performance. However, residuals for stunt performers may vary based on union agreements and the nature of their contract. For those in SAG-AFTRA, residuals are a key part of ensuring long-term financial stability beyond just their day rate for dangerous, physically taxing work.

What Are 'Adjustments'?
In the entertainment industry, adjustments refer to additional payments or corrections made to a performer’s salary or residuals to account for changes in the project’s revenue or usage. For example:

• Contract adjustments: If a project becomes more successful than anticipated or reaches new distribution markets (like international streaming), actors and performers may receive a contractually agreed-upon adjustment to their pay.
• Residual adjustments: If residuals were initially calculated based on inaccurate numbers, a correction might be issued to reflect the proper amount owed to performers.
  
  

Adjustments ensure that performers are fairly compensated if the financial success of a project changes significantly after initial distribution.

How Residuals Affect Long-Term Financial Stability
Residuals can provide lifelong financial support for actors, stunt performers, and other creatives. Projects that are widely syndicated or become cult classics can continue to generate income for years—even decades—after their original release. For example, actors who starred in shows like Friends or Seinfeld still receive millions in residual payments, as those shows continue to be syndicated and streamed globally.

For stunt performers, residuals are an essential way to continue earning from their hard work, as many projects are replayed or re-aired long after the stunts are performed.

Why Residuals Should Be Part of Your Contract Negotiation
Whether you’re an actor, stunt performer, or creative contributor, it’s essential to negotiate residuals when discussing contracts for a project. Here’s why:

1. It provides income beyond the initial payday: Residuals are the financial lifeline that can continue to pay out long after the project wraps.
2. They reward you for the success of the project: As the project earns more revenue, residuals give you a share of that success.
3. They offer financial security during downtime: Given the uncertain nature of the industry, residuals provide ongoing income, particularly during periods of unemployment or career transitions.

Many union contracts automatically include residuals as part of their agreements, so being part of unions like SAG-AFTRA is advantageous.

Final Takeaway: Always Think Long-Term
The lesson for actors, stunt performers, and creatives is clear: Don’t just focus on your day rate. When negotiating contracts, think long-term and ensure that residuals or adjustments are included. The continued income from residuals can make all the difference in achieving financial stability in a profession known for its unpredictability.

Residuals are not just an afterthought—they are your investment in your own future success!