MEDIA CFO — Episode 012 — John Gleeson talks to Tobias Jaeger about Ireland’s renewed International Role in Global Film and Television Production
We sat down with John Gleeson, Partner and Head of Entertainment at Saffery Champness in Dublin, Ireland to talk about Ireland’s growing role in international film and television production and the opportunities for international as well as domestic producers as a result of a new global content arms race.
John started his career in tax, more than 25 years ago, and has become one of the leading Irish tax advisors in media and entertainment, specializing in tax structuring, production incentives, and the famous Section 481 film and television tax credit. John has worked in companies ranging from boutique to med science, to Big 4 firms, and in 2014, he joined Grant Thornton Ireland to build and grow their local and global media and entertainment practice. John and his team built a stellar reputation over the next five years, so, the whole team was ultimately acquired by Saffery Champness in April 2019.
“Always doing the best that you can be is something that I’ve always strived to do, and having high standards, and just always putting your best foot forward and giving the best possible answer to your client. That has been my ethos from the very first time I started to train as a tax advisor. And from that comes a part that becomes an easy part. It twists and turns, and it’s never what you expect it to be but from that position, everything from that point works out. Okay? So, I wish I had worried a little less along the path, about the future. So, if I could say to myself, ‘You’re doing the right thing here. Just keep doing what you’re doing, and don’t think about the future. It’ll be fine.’”
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Tobias Jaeger: So, John, welcome to the program. It’s such a pleasure to have. I’m really excited to talk to you because I think you bring unique expertise, well, to obviously your work but also this show because I don’t think we’ve ever had an Irish tax expert on the show nor do I think it’s going to be easy to have another one. You’ve been in this industry for more than 25 years. Before we dive into what you to do and how you do it, I would love to talk to you a little bit more about your journey, how you got here, and what inspired you to go into tax law, or tax and accounting in Ireland.
John Gleeson: Good question, actually. When I was trying to choose a career, actually, I asked my career guidance teacher, “How do I get into film, music, entertainment?” And in Ireland, in the early ’90s, that was literally a close door. The career guidance teacher looked at my results from my recent exams, and said, “You should do either science or accounting.” And I said, “What pays more?” Accounting. So, that shows what my motive was from a very young age but when I got-
TJ: It seems like you asked two really important questions. How do I get in, and which one pays more?
JG: Yeah, exactly, but I decided that if I was going to get into business and accounting, and my dad was an accountant, that I would-
JG: That my promise to myself was that I would get into the entertainment sector. That was at a very, very young age. How I actually ended up in the entertainment sector came a lot later, and didn’t come, actually, by very deliberate steps that I took, actually. So, I think I put it out into the cosmos, I sent it. And it came back. So, I went, and I trained as a tax consultant for three years, and then I spent about seven years in a Big 4 firm where I got a mix of both sides, so, small firm experience and then larger firm experience. And then, at the end of that, I got headhunted to a firm, and really wanted to join them and become a partner. And then, when I joined them, they said, “Oh, we’ve got a small little film and TV business over here that was very successful in the ’80s and ‘90s.”
TJ: So, the angels started to sing, some string music set in, and you were like, “Yes.”
JG: Not quite.
TJ: Oh, really?
JG: Because at the time, the Irish economy was absolutely booming, and I was very, very focused on looking after my clients who were a combination of high-net-worths to property developers, to hoteliers to all sorts of a broad range of clients in various different industries. I looked at the film and TV side of things, and said, “Okay, that looks little bit complex.” So, I did a couple of deals, and went, “God,” it was really, really hard work. I did enjoy it but I was really, very focused on other things, but the years-
TJ: That’s super interesting because you said you started out with-
TJ: You would think that that was finally, you got to the point where-
JG: Yeah. It wasn’t like that but then, what happened a couple of years later was Ireland had an economic crash, and I had to relook at reshaping my business. I suppose over the years as well, I’d become more familiar with film and TV, and gotten to understand it a bit better, and I said, “Okay, this is interesting. If I’ve got these clients that are not doing so well, and I’ve got this over here, I could focus on this.” So, I made that conscious decision about 15 years ago, and literally focused on it, and it became successful pretty quickly, and then we built on it a bit more. And then, yeah, just over a couple of years, we got market dominance. So, that’s-
JG: That’s the story.
TJ: Yeah, so, when you go back to the beginning, when you had that thought in school, that you wanted to go in that area, and then later, you actually worked in it, how does that compare? Was it everything you dreamed of or …?
JG: It’s always different. It’s a tough enough business to work in but the thing is that if you have a passion, a genuine interest in something, then no matter how tough or stressful something can be, you’re getting that job satisfaction, you’re getting that kick. You got that feeling that you’re involved or rather adding value, so, that’s the key difference. It’s not for everybody but if you have that passion and interest, it just makes a tough job easier.
“I just have a slightly different perspective on how you get into anything. Rather than being led by a specific thing or specific sector, or specific specialism that you need to get into, I think, first of all, no matter where you are in your career, no matter what you’re doing, if you have in mind that you want to specialize in a particular area, you’ve got to just be really good at whatever you’re doing right now. You’ve got to try to be as best as you can at that. I think if you can prove that, that the opportunity in whatever you want to specialize in, whether it’s music and entertainment, or whether it’s exploration, or whatever it is, that the people in that sector, when you approach for jobs, and we’ll come back to this in a second but there are always jobs available, right? And then, all you need to prove is that whatever you’ve been good at up to this day, that you are excellent at and that you’re the best of who you can be at that, then you can get into any sector that you wish.”
TJ: So, when you started working with media clients, obviously, you were very familiar with the taxation system and the rules. How did you learn the media side of it? Was there a particular book, conference, something that you did to learn more about that side, or was it literally just translating what you already knew just into a new context?
JG: A bit like that. So, it was trying to take the commercial stuff that I had learned, and the commercial brain that I had developed, and the technical knowledge that I had gained over the years as a tax advisor. And then, looking at the sector, and saying, “Okay, I need to get into the contracts here. I need to understand what’s the commercial rationale, what’s going on here.” So, it did take quite a bit of an investment to peel back the layers, and to understand the financing structures but once I had done that, and then applied the general knowledge in terms of commerce and tax to that, then that just became a really interesting mix for me.
TJ: Was it any different than learning about the rules of … you mentioned hospitality, construction, real estate, something like that. Were they easier businesses to get an overview of?
JG: I think it’s one of the most complex industries I’ve ever been involved in. Yeah.
TJ: I was like, “job security!”.
JG: Yeah, a little. It’s a minority sport, it’s complex, it’s detailed but again, it’s something that if you understand that detail and that complexity, then you can also see opportunity, commercial opportunity angles, and that’s really where it becomes interesting.
TJ: Do you think if you joined today, with the same mindset that you had back in school, this is the industry I want to go in and you have a passion for accounting, that today it would be easier or harder to get into that line of work?
JG: Oh, much easier today, certainly in Ireland. So, Ireland in the late ’80s, early ’90s was a completely different place. The changes that Ireland has gone through in the last 25 years has just been-
TJ: Yeah, remarkable.
JG: … phenomenal. It’s a completely different country. In terms of the audiovisual sector like those local broadcaster and then, maybe one or two feature films a year, and not much else going on.
TJ: Yeah, because one of the reasons I’m asking is that obviously, financial industry or everything adjacent, accounting, tax advice, lawyers, that is only growing because obviously, there’s an increasing amount of regulation on a national level, on a European level in this case. But also, you work with more countries or people, or entities from around the globe, more than ever before, so, it’s still super interesting career, I guess, to go into accounting or audit, or something like that. I’m always wondering, there are some industries that are no brainers, that people are attracted to, and I think media’s somewhere in there but for some people, it’s probably difficult to assess like, oh, how do I get into that? And with so many firms out there, the question that I have is how can someone find the best path to go in there, to join a company and combine the two passions like you did?
JG: I’m going to answer your question a little bit indirectly.
TJ: Go for it. If you can ask my question better, please do so.
JG: I just have a slightly different perspective on how you get into anything. Rather than being led by a specific thing or specific sector, or specific specialism that you need to get into, I think, first of all, no matter where you are in your career, no matter what you’re doing, if you have in mind that you want to specialize in a particular area, you’ve got to just be really good at whatever you’re doing right now, okay? You’ve got to try to be as best as you can at that. I think if you can prove that, that the opportunity in whatever you want to specialize in, whether it’s music and entertainment, or whether it’s exploration, or whatever it is, that the people in that sector, when you approach for jobs, and we’ll come back to this in a second but there are always jobs available, right? And then, all you need to prove is that whatever you’ve been good at up to this day, that you are excellent at and that you’re the best of who you can be at that, then you can get into any sector that you wish. Back to my point about jobs, it just seems to me that there’s a short-term attitude at the moment, globally, certainly people under 40. There’s definitely a short-term attitude of I can just move from job to job, I’m able to build up my varied experience. So, there’s a huge amount of opportunity and availability of work. It just seems that we’re also, certainly in what we work in, in accounting and tax, and in film and TV, the two armed together, that they’re just getting busier and busier, so, expanding, and the job market is getting tougher and tougher from the employer’s perspective.
TJ: Talk to me a little bit about your job. Obviously, you have so many internal and external stakeholders. How does a day in the life of John look like? I’m guessing, then, a bit manic.
JG: Yeah, a bit manic.
TJ: And how do you stay on top of the things you want to do? You mentioned short-term perspective, obviously, there’s stuff that’s going on for long. How do you stay on top of that and not get absorbed by putting fires out, and stuff like that?
JG: Yeah. It’s really important, so, having an analytical mind around organizing your day, especially in an industry where there’s a lot of noise, okay? So, it’s about looking at what’s going on. So, typically, there’s ongoing assignments work with delivery dates that are within days or within weeks, and just stuff that needs to get done, that’s real and important stuff. And then, over to the other side, there’s noise, there’s people that have problems. It’s not your problem, they’re trying to make it your problem.
TJ: The favorite kind…
JG: Yeah, exactly, and you need to manage that. And then, on the other side, there are people where, actually, there is a fire, and you need to actually get involved and put that fire out. So, juggling those three, trying to spin the place of keeping either somebody at bay or saying no, getting the deadlines done, and then sorting out and putting out the fires as well. That can be a little bit of a juggling act but that’s a typical day for me.
TJ: What are some of the activities that are happening in that day? Because, obviously, you have a wonderful team that prepares a lot of things but still, you need to check certain things. What are some of the things you do?
JG: Well, good question. So, it’s about helping people get projects off the ground, and ideally, you need to get them to work and do production in Ireland or to have some kind of nexus, or operation in Ireland. My job is to seek out those opportunities, secure those opportunities, and then execute whatever the plan is, okay? So, in terms of the execution of the plan, I don’t have the bandwidth to do that, so, I’ve got an amazing team of people at various different levels. And so, it cascades through those people for delivery, so, it’s ensuring that delivery by delegation of management. And then, it’s the case of winning work, taught leadership and management.
TJ: Do you feel that the role you just described is what someone like you that has the job you have, has evolved in? Because back in the day, taxation and accounting, I guess was merely just looking at what has happened, arranging the accounts, saying, “Yep, it’s all fine,” helping clients to submit it. But what you describe now is so much more of a deal maker in helping structure complex things than just checking on the books. Do you think that’s the new standard or is that just what you made out of what you see best?
JG: Yeah. It’s not something that there’s a market for it to be replicated a number of times but all of the bookkeeping, and the tax, and the compliance, all that needs to be done too. But yeah, you’re right, it’s a combination of being a corporate financier, an accountant, tax advisor, all in one.
TJ: So, the rack in your office has many hats that you need to …
JG: Yeah, many, many hats.
TJ: You mentioned compliance. For me, that’s always a super exciting topic because obviously, especially when you talk about film producers, independent film producers, they’re very creative in pulling projects together and running them, and of course, on the other side, you have very dry and rigid rules that have to be followed. How do you help these people navigate the healthy path of living out the enterprising energies that they have, and still not getting into trouble?
JG: Yeah. It’s a really, really good observation, a good question. So, I’d be very nervous of just having a creative producer being the only producer on any project. I would be very nervous of that scenario. I’ve been there, and it’s-
TJ: It is nerve-wracking.
JG: It is nerve-wracking but it’s not the norm. So, normally, you have a producer who’s a very well-rounded individual. Actually, film and TV producers are the most impressive people, actually. Independent film and TV producers get the bigger picture of producing film creatively, producing film in terms of physical production, they understand bigger picture tax advisors, accounting, lawyers, and there is good and can converse at a very, very high level with the best of the best, right? The challenge is to try, and work with those people, and say, “That’s great. It’s great that you understand the very top level bigger picture advice that we’re giving you but you also have to understand that you don’t have the depth of knowledge, and the detail of knowledge that we’re bringing. That’s our job.” A good producer understands that dynamic, and says, “I know what you’re doing. Just get on with the detail.” And in that way, you can manage that issue that you’re talking about, which is how do you make sure that you’ve got a producer that’s compliant. 99 times out of 100, it’s one of those kind of guys or girls that are the producer that the tax advisor and the lawyer’s dealing with.
TJ: You mentioned the tax incentives. Obviously, nowadays, if you go to any film conference or TV conference as well, you always have at least 10, 15, maybe even 20 jurisdictions advertising their tax credit. With the example of Ireland, what are some of the economics behind it? Because sometimes if feels a bit like an arms race, them all one upping each other with an extra percent to get back to them. How is that in the Irish context? How does it work, and what does it do for Ireland?
JG: One thing that’s become very, very clear to me is that, actually, having a tax credit at a particular rate, that’s the headline stuff. That’s the tip of the iceberg, okay? And if that works in terms of the cost of doing business in that particular jurisdiction, great. Okay? Still not the answer. So, supporting that is stable economic, political government, availability of talented, below the line and above the line people, okay? Availability of infrastructure, ease of doing business in the jurisdiction, and all of those things need to come together. It all needs to be stable, it all needs to be reliable, it all needs to be easy, it needs to be easy every time, and your tax credit. It literally is the cherry on the icing, on the cake but those grab the attention but all the ingredients underneath need to be working properly, and mixing properly first.
TJ: You’re right. A couple of years ago, I had a conversation with a film commissioner, a person that was in charge of the rebate for that nation. Let’s say it was called the Island of Bambuco, and they were like 60% and this, and that. I was like, wow, that’s significant, and it’s very interesting money but I thought, “Okay, how can I find out how great this actually is?” So, I asked him, “How many gear houses are in your place, that you can get stuff from?” He didn’t know that. I later found out that there’s probably two local fixers, service producers. They had it all a little bit but nearly not as reliable or good enough that I would say, “Oh, yeah, sure. Let’s put everyone on a boat, and let’s go to that Island of Bambuco, and shoot a film there, and bring $2 million of which it seems like at least the five or maybe even six-digit amount goes to the minister of culture that needs to personally sign off on that.” So, you’re right, I think it’s the-
TJ: … complex system. Because the island obviously has experienced an enormous influx of inward production spend, do you think that’s part of the rebate or has that helped? What are some of the economics for Ireland? What is Ireland getting out of it?
“Before I joined Saffery Champness, I invested a lot in the last 15 years in getting out there, and creating awareness that Ireland is different to the UK, and my partners in London have done the same, and I’ve done it, and said, “The UK tax credit is very attractive but it’s very detailed.” And to embrace that culture, Toby, actually, and say, “Okay, let’s bring the top line to that guy or girl in Los Angeles, that know everything about everything, all around the world,” because they’re in LA, okay? But make sure that they actually do know, that they actually have that bigger picture because all they need to know to have these conversations is not in their day to day, 95% of their time in LA. It’s to know for certain that they’ve got that bigger picture about Ireland or about Spain, or about the UK. And then, when an opportunity does arise for that individual, say, “Okay, who’s that? What was that guy’s name? What’s his email address?”
JG: Well, a number of things. First of all, I believe Ireland was the first jurisdiction to actually have a tax incentive for film production.
TJ: Oh, wow. I didn’t know that.
JG: It was introduced in 1987 as an income tax for individuals forming partnerships to make films.
JG: Okay? So, we were pioneers in providing a tax relief for the actual physical production, okay? And of course, what happens to any person who ventures for the first time into the world of filmmaking, people put up their money, put out their tax back. And then, they waited to get their money back, they waited for their tax back, they never got any of their money back, so, they lost money. It evolved over time, into a form of selling lease-back, it was an investor-led type of model for tax relief, and now, it’s a corporation tax credit. So, it evolves. What a jurisdiction gets, and the reasons why they put an incentive in place evolves. So, right now, it’s about building the industry and creating employment with a particular focus, actually, in the last couple of years, on trying to get this activity into the regions. So, we’ve had a splitting of our economy over the years but in particular in the last 10 years, we’ve got a divergence between our rural economy and our revenue economy. So, we, at the moment, are awaiting a commencement order from the EU to introduce an additional 5% incentive, so, a 32% plus 5%, so 37% when you’re shooting the majority of the project outside of the main urban areas which are the counties of Dublin, Wicklow, where there’s a large amount of film and TV production.
TJ: Yeah, studios are there as well.
JG: Exactly, that’s exact. That’s where the studios are, just south of Dublin. So, Dublin County, Wicklow, and County Cork. If you’re shooting, essentially, outside of those three counties, you’re going to get 37%, so, it’s about stimulating the industry overall, but also a drive, recently, to stimulate and developing the industry in the regions.
TJ: So, when you talk about these different places with the additional 5%, where do you see this going in the medium or longterm? Because I know the government and the governing bodies, they’re quite aware of how interesting and important this is. Where do you see that going?
JG: The focus is on building a sector. I suppose it’s a lot to do about building jobs and building infrastructure but at the same time, there’s a big focus on building creative talent, and building below the line talent as well. And of course, tourism for Ireland has always been a very important sector, and very important to our economy, and the government policy has consistently recognized that film and television production is driving and refreshing Ireland’s brand and tourism.
TJ: Yeah, because I remember I read a study somewhere. I have to find exactly where that was but the research that was done was that with the people coming to Ireland, a full 30% said, “We’ve seen it in a movie, and we wanted to come see it.” I thought that was the most remarkable-
TJ: … thing. Traditionally, it comes from that there’s seems to be great understanding for the audiovisual sector on the government level because obviously, it’s been going on for a long time, and politicians change, and people in ministries change. Do you feel that there’s something specific to Ireland, why it worked so well or it’s going to continue to work well?
JG: I think that ease of doing business, English speaking, a place where people just like to come and like to be is very, very important. I suppose at the times changed, there’s definitely a recognition in government and in policy, that there’s an acknowledgement of the audiovisual sector and how important it is, and how it’s come out from Los Angeles, and become globalized, and in looking at Europe, that we are one of the key jurisdictions within Europe. And the vast majority of export out of LA and investment in, is coming into Europe rather than Africa or South America or the Far East. So, it’s very encouraging to see that the current and past governments are embracing that, and understand that, and see it as an important dynamic for us.
TJ: Do you think it’s going to continue that way? I mean-
JG: Yeah, yeah.
TJ: … obviously, you’re in touch with them on a regular basis. How is it to work with, I guess, government officials?
JG: It’s constantly refreshing the message and providing feedback on the bigger picture, providing awareness around how competitive it’s become as well. So, we’ve had lots of jurisdictions that were saying, “We’d like some of that too.” So, it’s-
TJ: Like the Island of Bambuco.
JG: Absolutely, absolutely. So, my message is always as soon as you stand still on the ice, you’ll hear the ice cracking but keep moving.
TJ: When a producer wants to come to Ireland, what are some of the things they need to look out for? Because I believe you need to have a local company. Actually, only the local company, if you choose to really be there, can really leverage that. What’s a good way to think of this and to start the process if you want to shoot in Ireland, or produce a part of it in Ireland?
JG: I suppose, from the very start, it’s to do your research, possibly speak to somebody like me from the outset. The choosing of a production partner in Ireland tends to come a little later, or if it’s a producer that already has relationships in Ireland, they may also have identified and understand at a conceptual level that a production partner is necessary, and therefore, say, “Oh, I’ve known this guy from meeting him at festivals,” or, “We co-produced something we did together 10 years ago, so, I’m going to pick up the phone to him. He’ll be my partner, and let’s go and try and structure it.” Like any jurisdiction with a well developed tax incentive, it’s not that it’s difficult but there are complexities, there are nuances, there’s detail.
JG: So, it’s about looking at the bigger picture, looking at the headlines, looking at what’s good qualifying spend, okay? How do we structure it? Can we structure it? Is there anything preventing us from structuring it? And if we can spend this amount in that jurisdiction, how much do we get? If we get that amount by going through that jurisdiction, can we close our finance?
TJ: You just mentioned working with you. I guess my question is two fold. One is when you work with clients or you’re starting to work with them, what would you hope that they understood better about your work? And what should they be looking for in an advisor, ideally?
JG: It just goes with the territory of what we do. There tends to be two types of clients that will approach us, okay? One is the producer that comes and says, “I know I can get the rebate. I just need you to provide an audit service in relation to what I’m going to spend.” Okay? We can say to them, “Yeah, absolutely, we can do that in isolation. Are you sure that’s all you want?” “Yeah. It’s just a necessary cost of getting this rebate, so, you’re an accountant, you just go and do the audit when we finish the spend.” And at that stage, we say, “Well, look, actually, we do more than that. That’s one piece of the work that we do. It’s the bit that we do at the end but would you like to have a conversation about what you’re thinking of doing?” Because that’s where our services are really at, that’s the value add side of our service. That’s where we can really get involved, add value, and advise on how to get the most out of the tax rebate, and the most efficient structures, simplicity. It’s where we bring all of our experience from hundreds of film and TV projects over years, and it’s about bridging that understanding. Sometimes, at the end of that conversation, the client says, “Just do the audit.” Okay, that’s fine, but a lot of times people say, “Okay, I get it. Okay. We’ll loop you in on the production with immediate effect.” And then, we’re involved way before the production commences, and involved in all of the planning and design, up finance stage.
TJ: It sounds like that kind of approach is actually quite dangerous from a producer’s perspective because as you said, it’s such a complex system that’s doable but you really need to know what you’re doing in order not to run into a roadblock somewhere. Do you have any advice what a potential client should be looking for in an advisor, in such a situation, other than someone that has a well-rounded idea? Because obviously, one of the factors you mentioned is having the experience of having done it 200 times.
TJ: Is there something else that comes to mind where you say, from your experience, you’ve seen that this is an idea people had, it almost never works, so …?
JG: Yeah, yeah. I suppose there are different types of advisors that do what I do, what we do here, and the well-rounded advisor who hasn’t got much experience of the sector but is a good well-rounded person who can give general advice on pretty much any sector, okay? And that’s fine. You then have the industry specific person who knows their tax law, and is just advising their client on this is the tax law, and this is how it applies to what you’re doing. Okay? Again, that’s fine. But then, there’s what we do, okay? Which is both plus the pretty detailed knowledge of the sector, lots of experience, and at Saffery Champness, the partners here are all sharing the same culture as looking at commercial opportunity, angles, how can we deliver the best possible solution for our clients? Something that’s left field, that’s out the box. So, in my view, we’re at a different class, really.
TJ: One of the reasons I’m asking is because you’re obviously based in Dublin but you work with clients from around the world, and one thing I’ve observed, talking to firms that do something similar in the US is, in the industry, it seems like if it’s not happening in Los Angeles, it doesn’t exist. So, there’s a bunch of them that portray this idea that even though they’re based in Los Angeles and that’s where they spend 95% of their time, they can still advise everyone on any jurisdiction because they’ve found the holy grail. With so much attention focus there, how do you make sure you don’t fall into the trap of getting absorbed by that, and focusing on what’s happening everywhere but mostly also where you are?
JG: Well, it’s about having a footprint in Los Angeles. We’ve invested a lot in that. Before I joined Saffery Champness, I invested a lot in the last 15 years in getting out there, and creating awareness that Ireland is different to the UK, and my partners in London have done the same, and I’ve done it, and said, “The UK tax credit is very attractive but it’s very detailed.” And to embrace that culture, Toby, actually, and say, “Okay, let’s bring the top line to that guy or girl in Los Angeles, that know everything about everything, all around the world,” because they’re in LA, okay? But make sure that they actually do know, that they actually have that bigger picture because all they need to know to have these conversations is not in their day to day, 95% of their time in LA. It’s to know for certain that they’ve got that bigger picture about Ireland or about Spain, or about the UK. And then, when an opportunity does arise for that individual, say, “Okay, who’s that? What was that guy’s name? What’s his email address? What’s his-
TJ: What’s John’s phone number again?
JG: Exactly, exactly. It’s to embrace that culture. Yeah.
TJ: This brings me to another question I had because obviously, you mentioned building a network and leveraging that. I know you raised money for projects where, as you said, took a deal maker role in that. Do you feel there’s a difference between bigger and smaller projects or are they the same, just different numbers, a couple zeros at the end?
JG: Yeah. That sounds lit but actually, do you know what? Even a small amount of money in a film is still a few hundred thousand Euros, which is not a small amount of money, okay? So, it’s the same methodology. What’s the value? What’s the value of the project? What’s the amount of money that you’re trying to raise? How do you get the money in? How do you get the money back? And the same concepts apply. There will be different realities about the value of a small half million feature film that’s distributed, and how you promote a market movie. That’s always compared to something that’s 50 million but at the same time, it’s the same concepts. It’s, okay, how’s this going to be exploited? Where is it going to go? What’s it market value going to be at the various different platforms, jurisdictions? What’s its value, and how can you apply that concept for an investor?
TJ: Yeah. You just mentioned the company, and obviously, one very exciting development I want to talk to you about that actually made headlines is that, very rarely happens but I’m told … I think this is only the second time.
JG: Yes, it was.
TJ: Yeah, exactly. So, Saffery Champness bought the media team, which you head up, from Grant Thornton. How did that happen? What inspired it? How did you perceive it, I guess, from the inside? So, being the person that drove that, I guess, how did it happen? It usually starts with a lunch somewhere.
JG: Well, yeah. Actually, it started with an awareness of the brand of Saffery Champness, when I was doing my LA trips as a Grant Thornton partner, coming across the LA studios with a very strong affinity with Saffery Champness and the two partners in particular that lead, John Graydon and Nigel Burke. And although the UK is a separate jurisdiction to Ireland, so, we weren’t technically competing with each other, it did lead to an introduction. I think from the get-go, there was an acknowledgment of a very similar mindset, very similar culture. We hit it off very well from the very start but we were in two firms, and Grant Thornton has offices all over the world, including the UK. So, we just decided to have a strategic alliance. The UK partners are very much trusted by the US studios, so, Ireland had become more and more interesting over time, for that LA sort of inward investment. And as that was happening, they were talking to the UK partners of Saffery Champness about, well, what do you think of Ireland? And so, the guys were recommending Ireland, and recommending my services. That’s how it started. That went on for a couple of years, and then, we said, “Okay, this might be more interesting if we actually joined forces in a more formal way.”
TJ: How long did something like that take? Do you think accountants on both sides, it should be efficient process.
JG: When you look down to it, it took about six months.
TJ: Okay. Because obviously, you’re working in it, at some point, you’ll announce that. How can you transfer what you’re doing, activities, clients from one place to the other? Was that tricky or nerve-wracking, or was it just like, okay, on Friday, you leave the one office, on Monday, you go to the new one?
JG: All of that, all of that. That’s exactly what we did. We finish on a Friday, and we open the office the following Monday morning. We had to transition work that was ongoing, transition client relationships, so, all of that. It’s a tricky phase because you’re trying to communicate with your clients, you’re bound under NDA, so, you can’t talk to your clients. You got to leak into market, and you’re trying to pass for your client to say, “Everything’s more than fine, actually. It’s going to be really good. It’s going to be really good for you, it’s good for me. I’ll talk to you later.” So, all of that needs to be managed but the big thing that we really found challenging, actually, was GDPR.
TJ: Oh, interesting. Yeah.
JG: So, it was the first transaction that we had all done since GDPR had been introduced. So, a big, big difficulty, so, you’re building up a roll of decks for years across all different platforms, your phone, your emails, and everything is paperless. In all of that ether, is all of your contacts, and the nexus of your business. And then, you try to transfer ownership of that in terms of personal data, that became a real pain. That ended up being the most painful part.
TJ: Interesting, interesting. One thing I ask everyone is if you had the chance to go back and meet your 20-year-old self, what would be some of the things you’d tell him?
JG: Just getting back to our earlier point about always doing the best that you can be is something that I’ve always strived to do, and having high standards, and just always putting your best foot forward and giving the best possible answer to your client, right?
JG: Has been my ethos from the very first time I started to train as a tax advisor. And from that comes a part that becomes an easy part. It twists and turns, and it’s never what you expect it to be but from that position, everything from that point works out. Okay? So, I wish I had worried a little less along the path, about the future. So, if I could say to myself, “You’re doing the right thing here. Just keep doing what you’re doing, and don’t think about the future. It’ll be fine.”
TJ: Speaking of the future, what are some of the things you’re watching or you’re interested in, or you see becoming bigger than they are now? Is there something you have on the radar?
JG: That’s on the radar. Yeah. There are a number of answers to that question. So, in the context of Ireland, Ireland as an extension of what’s happened in the UK, in terms of studio infrastructure, post and visual effects infrastructure is probably at a very early stage of its journey. So, in the next 10 to 20 years, I see a lot of development of studio infrastructure, increase in employment, explosion of animation, visual effects, etc, in Ireland, and a continued growth of it in the UK. But the two jurisdictions coming together is a bit of a powerhouse across that English speaking, servicing the US market. Things that are emerging, obviously, gaming, VR, 5D experiences, that all needs to be catered for in what we do in terms of incentivizing that, and creating employment around that. That’s very much developing, so, we have to look at our incentive legislation which tends to be geared towards a film or a TV series at 10 times 52 minutes, right? And these things are changing. I look at the habits of my own kids, I look at what they’re watching on YouTube, and actually, it’s a break for my kids to watch a full-length feature film, okay? Because they’re watching short form, where is that going? Short episodic television. It’s just phenomenal in terms of … I think the best way to look at where the audiovisual sector is going, is to look at what are kids up to.
TJ: So, with the inward production increasing, obviously, part of that growth is driven by someone like Neflix and Amazon, that are investing, obviously, heavily into original content. Was that something you felt in Ireland, that stream is becoming more active? How has it affected your work and the Irish production community, I guess?
JG: Hugely. There’s more streaming work right now in Ireland than there is from the traditional studios. Not that there’s traditional studio work happening but I think if I look at, right now, the snapshot right now, I think it’s more streamers commissioning more, involved in more than traditional studios. So, it’s very interesting what’s happening, the studios are going to become streamers.
JG: I heard a really interesting statistic during the week which was, it would take you four full years watching TV and 24 hours a day to watch all content on Netflix at the moment. Okay?
JG: That was interesting but then, the next comment was it would take you three years to watch everything that’s on Amazon, okay? And I didn’t realize that there was as much content, 75% content of Netflix on Amazon. So, Apple is launching later this year, okay? And already, I’m in one form or another, involved in at least two Apple projects that are happening in Ireland. So, this race and competition for dominance of content, we can only look at things in the short and medium term. The type of content that’s required is suitable for the type of service and the type of content that we can deliver from Ireland, so, it’s really exciting. The outlook for the short term, medium term, in terms of that race for content should have quite a positive impact in helping Ireland get its industry to the next level.
TJ: When you look at these deals, is there a fundamental difference how the streamers do business versus the studios, or is it just modified versions of contracts and agreements? Or is it very-
JG: It’s modified versions of contracts. They’re taking the best in class, out of the studios and the larger independents, so, the people that we’re dealing with are people who have worked their way up through the industry and are now moving in. So, they’re bringing those traditional models. Whether it’s streamed or whether it’s theatrical release, or TV, I think the broad concepts are pretty much the same. It’s about value versus budget.
TJ: Yeah, because I guess, ultimately, when you look at who’s now working at the streamers, that’s people that worked in studio environments before.
JG: And the people that I had relationships with at the studios, 10 years ago, are now all at the streamers.
TJ: Interesting, yeah. So that’s-
JG: Which is good.
TJ: Yeah. I mean, that’s one thing I’m always curious about because obviously, when someone that started completely as a tech company, Netflix, they’ve actually always been, I guess, an entertainment company. I know they’re not looking at it like that but starting with the DVD business, which you mentioned statistic. I heard that they still have two million DVD subscribers, which blew my mind. In 2019, they’re still … I mean, I guess there are some places where it’s difficult to get broadband Internet even in a developed country like the US, so, I mean, ultimately, that expertise has shifted as well. So, I’m curious to see, you mentioned the studios becoming streamers as well now, if people are moving back to the studios, having had the streaming experience because, ultimately, every studio that becomes a streamer will need an expertise again as well, in that area. And there was only one place you could get that expertise, I guess.
JG: Totally. It’s just a platform. VHS, DVD, streaming.
TJ: The mode of delivery. Yeah, I think when you look at all the new things that are being done, you mentioned VR, 5D and so on, that’s going to be super interesting to watch. I guess this is the perfect place to wrap it up, so, I’m looking forward to next time we speak, and we can look at some of the things you mentioned, and how that has evolved because I think it’s going to stay quite exciting. Whether that’s on the technical side, the tax side, the jurisdiction side, the cunning side. So, thank you so much for making time, John. I’m looking forward to speaking with you next time.
JG: Thank you very much, Toby. Was a pleasure.
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Audio Engineer — Athanasios Karakantas
Executive Producer — Bridget Scarr (http://www.bridgetscarr.com)
Design — Daniel Cottis (http://www.danielcottis.com)
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Transcription services by Rev.com
Special thanks to everyone at Saffery Champness, especially Ciara O’Neill, Caroline Lewis, Leanne Oscroft, and Nicole Lovell for helping to make this conversation happen.
Special thanks for their creative review go to Anouk van Ghemen, Frederik Jaeger, and Philipp Hoffmann.
For comments on the show or if you know of someone we should interview, please send us a message to firstname.lastname@example.org.
ABOUT MEDIA CFO
Media CFO focuses on the finance, strategy, business affairs, and legal side of the global media & entertainment industry. The guests on the podcast range from veteran studio executives to new, disruptive market entrants.
MEDIA CFO takes a look under the hood of the global entertainment industry and talks to the unsung heroes: dealmakers, lawyers, entrepreneurs, financiers, service providers, bankers, investors, and agents. The podcast offers unique insights into the daily work and life of those, who run and build this industry by visiting them on location and having in-depth, in-person conversations.
ABOUT TOBIAS JAEGER
Tobias started his first own firm during his studies at Maastricht University in the Netherlands and has lived, worked, visited, and studied in over 43 countries on 4 continents. Tobias loves to connect people from around the World to make great things happen. Previously, he has done so at Business Associates Europe, SAP AG, StrategosPoker, Aramark, and entrepreneur academy. Today he is a Managing Partner of AXIOM Venture Capital, a family office focussed on the media & entertainment industry and Tobias serves as the Chief Financial Officer of London-based television and content studio Colibri Studios.
The conversation was originally recorded in London in May 2019.
© 2019, Colibri Studios of London