Film Accounting Glossary
Residuals
What are residuals?
Also called reuse payments, or residual payments.
Residuals are payments owed to performers, directors, and writers under guild agreements when a title is reused beyond its initial market: television, home entertainment, and streaming exhibition.
They are calculated by formula on distributor gross or a percentage of the applicable receipts, administered by SAG-AFTRA, the DGA, and the WGA, and can continue for decades. Because they are an ongoing liability of whoever holds the rights, residuals obligations transfer with the picture and are a standard item in any acquisition.
Example
A television reuse triggers payments to performers, the director, and the writers by formula on the applicable receipts. The obligation can run for decades and transfers with the rights, so a buyer acquiring the picture acquires the residuals liability with it.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Administered by SAG-AFTRA, the DGA, and the WGA against whoever holds the rights. A standard diligence item in any library acquisition.
Common mistake
Acquiring a library without pricing the residuals obligation. It transfers with the rights and can continue for decades after the original release.
Related questions
- What triggers residuals on a film or series?
- Reuse beyond the initial market: television broadcast, home entertainment, and streaming exhibition, each calculated by formula under the applicable guild agreement.
- Who is responsible for paying residuals?
- Whoever holds the rights. The obligation transfers with the picture, which is why it is a standard diligence item in any library acquisition.