Deferral

From ForcaWiki, the simple encyclopedia

Imagine your favorite babysitting job pays you 10 dollars an hour, but this month the family is a little short on cash. They ask if you would mind waiting to get paid until they get their next paycheck, and you agree. You still get every dollar you earned, just later than usual.

A deferral works the same way in the movie business. It is compensation that will be paid once a certain goal is reached, instead of being paid right away. A writer, director, or actor might agree to take less money up front, or none at all, in exchange for a promise that they will be paid later, often once the movie starts earning money, or once it earns enough to hit a specific target. This kind of arrangement is also called a deferment, and for Talent it is often specifically tied to the movie reaching Cash Break-Even, an early milestone where its earnings catch up to a first, easier version of its costs.

Why anyone would agree to this

Deferrals help get movies made that could not otherwise afford their full Above the Line talent up front. A well known actor might agree to defer part of their fee because they love the script, or because they believe the movie will do well enough to pay them back later, sometimes with extra money on top as a reward for taking the risk.

Until a deferral is actually paid, it counts as one of the movie's Liabilities, money the production still owes, even though no cash has changed hands yet.

Fun facts

• Deferrals are a common way for very low budget, independent movies to attach well known actors who could never otherwise afford their usual fee.
• A deferral is a bet. If the movie never reaches the goal it was tied to, like earning back its budget, the person who deferred their pay may never see that money at all.
• Whole movies have been made almost entirely on deferrals, with everyone from the writer to the crew agreeing to be paid later instead of during the shoot.