Authors: James Johnston, Samantha G. Rothaus, Jordan M. Thompson and Howard R. Weingrad.
SAG-AFTRA and the Joint Policy Committee (JPC) have reached agreement on a new Commercials Contract, which is now officially in effect. Notably, the deal was reached without a strike — a rare outcome in recent entertainment-related collective bargaining where disputes, particularly over artificial intelligence (AI), have often led to stalled negotiations and significant production disruptions. A summary of the most notable updates is outlined below.
Artificial Intelligence
Digital Replicas
The Commercials Contract now establishes a framework for the creation and use of a performer’s digital replica, which enables producers to generate new performances without the performer’s physical presence or continued involvement. A digital replica may be used under the following conditions:
- A reasonably specific description of the intended use and scope of the digital replica is disclosed to the performer at least 48 hours in advance.
- The performer provides clear and conspicuous written consent (via a Digital Replica Rider or in a separate signed writing).
- Additional written consent — beyond the initial agreement — is required if the producer wishes to use the digital replica in a way that falls outside the reasonably specific description originally provided to the performer. Furthermore, unless it was already explicitly included in the original agreement with the performer, additional written consent is required before using a digital replica in any manner that alters the performer’s physical characteristics (e.g., changing the color of their hair, the movements of their mouth, or the sound of their voice) or depicts the performer fully or partially nude.
- The minimum compensation owed to the performer is 1.5 times the applicable scale session fee, plus use and holding fees at scale, for each commercial that features a performance created using the performer’s digital replica which they otherwise would have performed in person.
Synthetic Performers
The new Commercials Contract also addresses the use of synthetic performers, which differ from digital replicas in that they are not recognizable as any one single identifiable human performer, nor are they voiced by a human performer. In other words, synthetic performers are entirely fabricated by AI and are not based on the traits, mannerisms or likeness of any specific person. The use of synthetic performers is generally acceptable, so long as cost saving is not the primary motivating factor.
While synthetic performers are not humans who are owed wages or other compensation, producers using such technology must nevertheless pay fees into the union’s Pension and Health funds, which ultimately benefits the collective body of the union’s members. The amount of fees owing will vary depending on the number of synthetic performers utilized and whether human performers also appear in the commercial. Where a commercial only includes synthetic performers with no humans, the amount of any fees owing by the producer must be negotiated with the union.
Historical AI
The new Commercials Contract affirms that digital technologies, such as VFX, CGI, and motion capture, which have historically been leveraged throughout all stages of production, remain permissible for their traditional purposes, even to the extent that these tools incorporate AI technologies. No additional permission from, or payment to, performers or the union is necessary. The ongoing use of these ubiquitous tools is not impacted by the new Commercials Contract.
Editing Provisions
The editing provisions of the Commercials Contract have been replaced in full. The new terms clearly define which types of edits to a commercial are considered permissible and which are classified as “Unpermitted Edits” — and therefore constitute a new commercial, triggering standard session and use fees.
Unpermitted Edits specifically include edits that change the fundamental concept of the commercial or the commercial message about the product or service being advertised, as well as edits that add new principal performers or new products or brands to the commercial.
Permissible edits, on the other hand, include the following:
- Changes made during the session (e.g. shooting of alternate scenes);
- Shorter/longer/same length versions using footage from the same production;
- Changes to intro and end tags, dates, factual information, supers, offers and legal;
- Rearrangement of scenes;
- Changes to VO or music;
- Addition of Foreign Language voiceover;
- Replacement of product variant, wardrobe, props, or background.
While such permissible edits would not constitute a new commercial, edit fees along with additional session fees to performers may be necessary, based on the nature of the changes made.
In addition, producers may submit commercials to an advertiser’s asset management platform or commercial library in order to allow the advertiser to create unlimited edits for use in traditional digital media (specifically, the advertiser’s social media, websites, and organic YouTube channels) during the maximum period of use, in exchange for payment of a capped number of session fees to the principal performers in the commercials.
Wages
Performers will receive year-over-year incremental wage increases of 5% in year one, 4% in year two, and 3% in year three of the contract. The wage increases will be retroactive to April 1, 2025 – meaning performers will be entitled to back pay of any wage differentials for work performed from April 1 onward.
Pension and Health
Pension and Health payments, which producers must contribute to the SAG Pension and Health fund (on top of the performer fees), have been increased as follows:
| 2022 P&H Rates | 2025 P&H Rates (New) | |
| Signatories | 20.5% | 23.5% |
| JPC Authorizers | 19.25% | 19.95% |
The discount on these contributions that JPC Authorizers receive is more substantial under this new contract than it has been in recent years. Advertisers and agencies should factor these rate increases into their budgeting plans for talent.
In addition to the foregoing rate increases, the Pension and Health Allocation Guidelines have been updated in the new Commercials Contract. These allocation guidelines set forth recommended percentages of a performer’s compensation that should be allocated as SAG-covered for purposes of calculating P&H contributions under multi-service contracts (where both “covered” and “non-covered” services are contemplated). These guidelines have now been updated to reflect a recommendation that the P&H allocation should be 40% for multi-service contracts where the commercials produced are to be used exclusively in Traditional Digital use categories – i.e., social media, brand websites, retailer websites, third-party websites and organic YouTube channels. This 40% allocation is notably lower than allocations for SAG-covered services in multi-service agreements as to which use is made in broadcast and other media.
Generally, where the allocation guidelines are followed or exceeded, there is a rebuttable presumption of compliance, reducing the risk that a producer will be subject to audit by the P&H Funds on the basis of insufficient P&H contributions.
Protecting Interests of Minors
Reflecting cultural and regulatory shifts – particularly surrounding workplace safety and the protection of minors – the new Commercials Contract also (i) introduces stricter requirements to ensure that sets employing school-aged performers provide an environment conducive to their ongoing education and (ii) grants producers the right to require that a background check be performed, as a condition of employment, for anyone (other than a parent or guardian) who will be working in close proximity to a minor.
The Bottom Line
- SAG-AFTRA and the Joint Policy Committee have finalized a new Commercials Contract without any threats of strike or work stoppage. The agreement is effective retroactively to April 1, 2025.
- The new Commercials Contract introduces a formal framework for the ethical use of digital replicas and synthetic performers – requiring clear consent and additional compensation to the applicable performer or the union’s Pension and Health fund.
- Revised editing provisions clarify what constitutes a new commercial versus a permitted edit, reducing ambiguities and helping advertisers avoid any unintended exposure to incremental fees associated with the production of a new commercial.