MEDIA CFO — Episode 007 — Roland Wieshofer, former Chief Financial Officer of Blumhouse Productions, talks to Tobias Jaeger about leveraging CFO skills and expertise in entertainment ventures
We sat down with veteran entertainment CFO Roland Wieshofer, for a double episode special. Roland started his career as supervising accountant and built a deep finance and accounting expertise in film and digital. Roland was instrumental in modelling and building one of the first streaming ventures as well as the financial management of some of the most successful film production companies.
Roland Wieshofer has built his career in finance and accounting over the last three decades, serving in increasingly significant positions in industries such as construction, automotive, and manufacturing until he transitioned into the media and entertainment industry more than 15 years ago. When relocating to Los Angeles, he started a deep dive into the entertainment industry where he served as VP Finance, Chief Accounting Officer, and Chief Financial Officer at companies like CinemaNow, Exclusive Media, Media Rights Capital and, until recently, Blumhouse Productions.
“You have to take a portfolio approach. Just like the VCs and the private equity firms, they know they’re going to have winners and losers, they just hope that the winners make up more than the losers lose. And in the film industry it’s the same thing and every business plan that you read will acknowledge that and shows you that in aggregate it will make money. It will be successful. This model will work. And what that Exclusive Media experience taught me is that the order of the successes and failures matters more than whether you think overall 10 films are going to make you money.”
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Roland Wieshofer: That and using just my track record. Just trying to be a by the book accountant, by the book finance person, someone that doesn’t have the burden of all the industry experience that a lot of other people have potentially. And could have a fresh view and be the sane person in the room hopefully. So what I did was I tried to get … Since full-time positions weren’t available really I tried to get consulting engagements.
Tobias Jaeger: Because they were still in the aftermath of the financial crisis and everyone was just tightening the belt.
RW: Right. People were still going to the movies so there were obviously still companies out there that are making movies and other companies that are seeing if they can get a leg up. As well as the ones that want to get into entertainment and think believe that the internet is the way to go versus traditional production distribution methods. And so I ended up helping people with business plans. It wasn’t hard to get consulting engagements. The hardest part was to get paid for consulting engagements. Because everybody promised anything but money for-
TJ: Just help us now and then when this is the new unicorn then … You know.
RW: Yeah. I mean there were some people that if I thought they had a really interesting track record and had a lot of experience within the industry and wanted to go out on their own and needed some help, then I was more willing to help them out. And even there was the one guy that I became good friends with, went out on his own and it took him quite a while and he and I were working in one office together and whenever he had a spare few dollars he would say “Here, let me cut you a check for what you’ve done” sort of thing.
TJ: That’s nice.
RW: Yeah. So I felt like at least I wasn’t being taken advantage of. That this person was genuinely cutting a check out of their own bank account to try and move their business forward.
TJ: Because I mean in this situation you’re practically an investor in the company.
TJ: You’re giving your time and so in that time of uncertainty you also evaluate these things of course like well, is this where I would really put my money? So it’s nice to see that someone acknowledges that because I think that doesn’t happen a lot that people understand that you are actually an investor in that business.
RW: No and I think I definitely saw myself that way. I’d learned at that point in time already that I did really like the entrepreneurial thing and that I enjoy trying to help build a business. And as long as the environment is right and the person trying to build something is relatively sane and has an interesting view on … And I’ll come back to that later. Has an interesting view on their piece of the whole industry and how they can make money off of that and take advantage of that, then I’m all in. Obviously for whatever time it takes and when it still makes sense. And by the way this guy is still a good friend and long after I had to leave him for a real paying job he actually grew that company into a business and released some movies and has done a lot of stuff for streamers and various other-
TJ: That’s fantastic.
RW: Yeah. So he’s actually doing quite well now and is still a great guy. So it’s kind of fun. For me anyway, I get a charge out of thinking back to when we were sitting in borrowed offices and just working through models and trying to figure out pricing and whatever it is, just all that crazy stuff, that that actually worked out. I mean that was fun. I also helped a company called Open Road Films. Only because I knew the guy who was going to be CEO. I was helping him with his business model. Because he was backed by a private equity firm and those guys are full of analysts that do nothing but build Excel models.
“A lot of foreign sales companies started up at that time as well because that model worked so well. And all we’ve seen since then is that model has gone away. I mean foreign pre-sales still exist but they’re a shadow of their former selves so that’s why you really don’t see a lot of independent $20, $30, $40 million movies being made.”
TJ: So you got to keep them entertained.
RW: You got to keep them entertained.
RW: Yeah, exactly. So under the garbage in, garbage out it still needs someone to look at it and go yeah this looks right or no this is not right. So that’s kind of what I did for him. And he had already, before I approached him or he approached me, had already hired a CFO from a major studio. Perfectly nice guy, smart guy, whatever, but if you’re coming from a major studio and going into a startup entertainment company, that’s an entirely different world.
TJ: Different set of assumptions.
RW: Yeah, exactly. You don’t have an entire infrastructure behind you. And so part of my job was to teach him all the things that he should be thinking about as now a small company CFO, which is far more broad based set of responsibilities than a CFO at a major studio. So anyway, that was kind of fun. It didn’t bother me that he had hired someone else as the CFO. I mean it kind of was what it was. I wasn’t 100% sure on the business model anyway. It was pure distribution, but theatrical distribution, and ended up being just as risky as the internet distribution company I had in that it was just more money that was made and lost in that situation so unfortunately they flamed out over time. But they were around for a while. So that was kind of fun. And then I did a temporary thing at Media Rights Capital which was sort of growing at the time and I think they had just negotiated the deal with Netflix on House of Cards. So that was a bit of a trailblazing moment for them. And their VP Finance had left and so I came in and installed a new accounting software system and helped them try to find a replacement VP Finance, that sort of stuff. But all those experiences gave me a bit more, not to overuse the word experience again, in the industry. But now I’m crawling toward traditional content creation as opposed to all these ancillary businesses.
TJ: And you get so much context out of this as well, which obviously is super helpful when you’ve seen an industry or something from so many different angles, slightly different. Obviously whatever you do after that you have so much context that you can … Not just the experience but also saying oh okay, I know if someone says here’s this and it’s five then obviously you’re going to oh, that’s very low or that’s very high and I think that’s a lot of the times, especially now when the rules seem to be changing a little bit as well again and some new normal is going to come up that that is incredibly valuable to have.
RW: Yeah, no, absolutely right. I mean that’s the benefit of experience is that especially as you progress in your career or even achieve whatever highest position you’re going to achieve and if CFO is it that’s fine. But you’re moving at such a fast speed and there’s just so much going on all the time that you have to draw on that experience to, as I say, give something the smell test. I mean does this actually smell right or does it not smell right? I mean you can look at something quickly and go hmm, I don’t think that’s quite right. I think we might want to look into this. And that’s super valuable. You can’t start your career doing that because then you’d be some sort of savant or whatever and that doesn’t happen very often. But you’re absolutely right. That started to get me more ingrained in the dirty details of the business so that I could have that perspective and start to make recommendations on how to maybe change things or make them better or whatever it is. So anyway, yeah totally agreed. And I’m sure that that got me finally my next full-time job. I waited until 2011 for that to happen but at a at the time very traditional, independent film company. Back then you were either in TV or you were in film, you were never in both. Yeah, very different world.
TJ: There was no both.
RW: No. There was no both at all.
TJ: And there was film up here and TV down here.
RW: Right. Yeah. Well because TV at the time demanded an awful lot of money to try and make it work, which is why most of television was created through studios, major studios back then because of the investment involved. And that’s obviously changed a lot today. But that experience at Exclusive Media was great. I mean it was, to me, in my career and my sort of improving my knowledge in the film space was like bootcamp. There was a lot going on. It was all very risky. We were private equity backed. We had companies in the UK, in the US, we were buying libraries, but we had the overlord private equity was in Amsterdam. So as the Chief Accounting Officer as opposed to the CFO there was a whole bunch of stuff to deal with just in getting audited financial statements together.
TJ: Just translating it. Not just language but numbers as well and systems.
“But at the time the people from the private equity firm pulled me aside as well as the head of business legal affairs and said “We want you two to run the company.” And so naturally we were flattered and started thinking about what we could do. This is like our company to run now. Now we get to be the guy in the corner office and it’ll be so much fun and we’ll go to every festival and fly around the world. It’ll be great. And so once all those dreams sort of flew through our head and we started talking about it, it came to realize that well hang on a second, what is it we’re managing? There’s just a library of titles now. There’s no more making movies. There’s no more selling movies. There’s no more nothing. It’s just cashing checks and opening the mail. Which doesn’t do much for one’s career. So I decided that well I guess I have to look for the next opportunity.”
RW: Right. Well and all the boring accounting concepts that are different and every country has their own interpretation of them. But at that time, and that was the model at the time was that films were financed and green lit by a combination of foreign pre-sales and production loans. And obviously a distribution strategy in the US. And so that seemed very cookie cutter. Of course you were still beholden to the success or failure at the box office. But at the end of the day you could mitigate a lot of the risk of doing a $20, $30, $40 million production by having foreign pre-sales that covered the bulk of your budget. And that model worked well enough and a lot of people made a lot of money at the time doing that. A lot of foreign sales companies started up at that time as well because that model worked so well. And all we’ve seen since then is that model has gone away. I mean foreign pre-sales still exist but they’re a shadow of their former selves so that’s why you really don’t see a lot of independent $20, $30, $40 million movies being made. Unless you’re Megan Ellison I guess or you have somebody with some deep pockets somewhere of your own.
TJ: I was about to say, unless you have some deep pockets. Usually short fingers, but deep pockets.
RW: Yeah, exactly. Exactly. And I’m sure the industry will find another financial model that’ll work down the road that’ll resurrect that. But anyway, for me it was fascinating to finally be on the inside of content creation and all that goes on and all that’s required and really the tremendous risk that’s involved in that every film is a new business. When you think about the millions of dollars that go into making one particular movie, every movie is a startup. And it’s a very risky business.
TJ: Yeah, I mean essentially I think a bigger production house like that, it’s almost like a company incubator or accelerator where you’re just trying to validate the project and give it as many references why this is a great idea, but like the tech startup as you mentioned, and then hope that that works out. And I think something like the foreign sales, I mean the line of visibility of those things seems to have just shifted in a sense that an organization like Netflix, they must be able to anticipate somehow how different markets react to projects that they do and make decisions based on that. But obviously if you’re a production house you don’t really have access to the data or that kind of insight. So yeah I think-
RW: No, that’s a great point actually. I hadn’t actually thought of it that way, but I mean you’re right. If we fast forward to today, Netflix is a end to end, kind of like a major studio would be, with the secret sauce being that they don’t tell anybody anything. So nobody actually knows how well or poorly anything does. You can only judge it or guess based on what goes up and what comes down off their site.
TJ: But not even in the financials. I mean if you dive into their financials all you see is whether more people signed up or not. But you don’t know how many hours or minutes or seconds they watched or anything. For me it always seems a bit like the 1930s, 1940s US studio model where they tried to own the whole value chain including the stars and everything. But it’s just today.
RW: Technology allows that today. Just makes it different.
TJ: Exactly. So I always think it’s funny how history repeats slightly with a different flavor. But from there you went and then you were like okay this is content production at a production house.
RW: You know we made some investments on the side and within four or five years like most independents like I said earlier it started to fail. The big problem with this one was you had a willing investor that put over $100 million into the company but like any private equity firm, VC, whatever you want to call it, any investor really, you don’t just want your money back, you want a return on your money. And you understand the risk involved so you want an even higher return. And the thing that sunk the company, interestingly, in retrospect was the fact that the first three films that were released all failed to various degrees and so after one and a half years you’re now in the hole, call it $20 million, something like that. And then if you’re the CEO now you’re like “Okay, now I’ve got to make that 20 back and then some.”
TJ: And invest in a new project.
RW: And invest in a new project. And that has to return even more to make up for that so that the overall looks like a win. And by the way I’m also burning overhead every day that we’re here as well, losing that money. So what naturally happens then is exactly what you’d expect which is the only way you get an outsized return is to take on greater risk. And so subsequent projects then started taking on greater risk. The other problem that arises that I found interesting is that the lifeblood, besides money, of an entertainment company is being able to source great material to produce. And whereas at the beginning, I wouldn’t call it great content, but at least there was flow of content, of material coming into the company. But once you have a few failures you get less and less of that obviously because talent doesn’t want to be attached to a bad track record. They have enough problems of their own. So continuing to try and source content that would make up for the past failures and generate a return became even more difficult. And so we started doing crazy things like investing in other companies and whatever. Or taking a project that actually had fantastic potential internationally and taking all the risk in the US only which was the one territory where nobody cared about that piece of content. Taking big bets like that ended up sinking the company because you can have big rewards but you also have big failures with risk. So that was a lesson in how to manage or not manage risk in the entertainment business. So that’s what I found interesting and learned a lot about in that, besides the bones of an entertainment company.
TJ: Also I feel like the situation you described, obviously you have a huge investor, private equity money means you’re usually talking three digit million dollar amounts. But I feel like the exact same dynamics and mechanics can also be applied to smaller companies. Because I feel like especially when I was doing investment banking would speak to smaller production companies or IP owners, they wanted to raise money, I think one component that they like to overlook was that the investor they were talking to or they wanted to attract, usually someone had invested in that investor as well. Private equity funds, they source their capital as well from other like pension funds, you name it. So they often seem to not anticipate what kind of the needs, if you will, are from that investor. And that’s where kind of it starts to go wrong before it even started. It’s like well you can tell a great story but as you said if the first one doesn’t work out then oopsy daisy. The second one has to be three times as great as the model says because it needs to make up for the first one and the other one.
RW: Right. Well I think I had mentioned this to someone else that the film business is … You have to take a portfolio approach. Just like the VCs and the private equity firms, they know they’re going to have winners and losers, they just hope that the winners make up more than the losers lose. And in the film industry it’s the same thing and every business plan that you read will acknowledge that and shows you that in aggregate it will make money. It will be successful. This model will work. And what that Exclusive Media experience taught me is that the order of the successes and failures matters more than whether you think overall 10 films are going to make you money.
TJ: That’s true.
RW: Because if you’re behind the eight ball you could burn through all your cash in three movies and then have none left to make seven more.
TJ: It reminds me of a story I heard about a startup here in Europe. Don’t want to use their name.
TJ: They had received a substantial investment, a couple hundred thousand from some angels, for something that they had promised that they would do, which they didn’t have. They kind of had an idea of how they would get there. And instead of kind of saying okay we’ll try to build this, they actually took this money and invested it in Google stock. And then eight months later that had exploded. And so they were delivering an enormous return and then basically used that money that they had I think close to doubled in that time, they used that to build the technology and then ended up delivering on what they had promised.
“Because all the money’s going to TV now as opposed to film. So companies are starving for content on that side and it’s mostly tech companies that think they have to have content to remain relevant and grow their brand and retain users and all that sort of stuff. I mean I just read the other day that Snap had a better quarter really because original content allowed them to keep their audience engaged and not lose as many people and maybe even get one or two more. Not a lot but it certainly didn’t help the bottom line as much but their top line went up. So now they’re going to go well that’s working so let’s throw more at it.”
RW: Oh my goodness. Geez, that’s lucky.
TJ: Exactly. When I heard that I was like ‘oh my god’. It could have gone the other way as well.
RW: Oh, so quickly.
TJ: And not so. Kudos to the chutzpah you need to do that.
RW: No kidding. Buy lottery tickets.
TJ: Exactly. So from there you decided okay I like content creation and you joined Blumhouse from there?
RW: Pretty much. I mean the way things went down at Exclusive was that, we’ll call it unceremoniously right after … At least they let us have Christmas and then in January 4th they show up en masse from Amsterdam and had hired an HR consultant to decide who’s going to go and who’s going to stay. So basically 75% of the staff had to go and 25% got to stay. And of course senior management had to go because they were to blame for everything. But at the time the people from the private equity firm pulled me aside as well as the head of business legal affairs and said “We want you two to run the company.” And so naturally we were flattered and started thinking about what we could do. This is like our company to run now. Now we get to be the guy in the corner office and it’ll be so much fun and we’ll go to every festival and fly around the world. It’ll be great.
TJ: Get a branded corporate jet.
RW: Yeah, exactly. And so once all those dreams sort of flew through our head and we started talking about it, it came to realize that well hang on a second, what is it we’re managing? There’s just a library of titles now. There’s no more making movies. There’s no more selling movies. There’s no more nothing. It’s just cashing checks and opening the mail. Which doesn’t do much for one’s career. So I decided that well I guess I have to look for the next opportunity. So luckily this time I didn’t have to be out of a job to find another job. I had heard about an opportunity at Blumhouse where Jason Blum, the owner and founder, had decided that instead of continuing to be a producer for hire, which is basically just somebody that makes movies but doesn’t invest their own money in it and takes fees, he wanted to expand into, call it a mini studio. He had built up a good track record of delivering films that perform well at the box office at a low cost that he felt it would be possible to build that. I wouldn’t say probable but possible. He had never had any other senior executives in his company before. The highest ranking person beside him was head of physical production. And I think he had a head of business legal affairs as well but that was about it. So he had hired me as the Chief Financial Officer and another gentleman as the president who was 30, 35 years deep in experience in the entertainment industry and was quite well known and everything and a really smart guy. So I saw this as a great opportunity both to, again, build a company which is kind of what I like to do. In this instance the company had built itself to a certain point and then wanted to go beyond that. So it was perfect to go in there at that point in time given that we were looking at closing some equity money for the business and there was no debt on the books. There was cash in the bank. It was highly unusual for an independent entertainment company.
TJ: It’s like how did that happen?
RW: Yeah. It just doesn’t usually happen in that.
TJ: Number one, that someone, instead of saying “Oh, I can do this by myself and I’ll be the best at it”, he actually goes out and finds two very senior people to join the team and say “No, no. Obviously I’m good this. You seem to be good at that. You do that.” And you open the books and you’re like wow, what’s going on here?
RW: Yeah. How did he get this far without getting himself into trouble? So it was a great situation. The foundation of everything was, in my mind, very good. Because again, you don’t want to walk in and say we’re behind the eight ball by tens of millions of dollars but we think that this will turn it around, because then you’re just under stress from day one. And the industry is stressful enough as it is when you’re in it. So here we had a blank sheet upon which to build a business around the core, which was low budget horror films that make a decent amount of money. And if you go back to sort of the portfolio approach of making films, this model works really well because when you lose you don’t lose a lot of money. It’s only a few million dollars to make those films. But if you win usually you make an outsized return. So you can have a few losers and then a bunch of winners and the order matters less than when you’re making bigger budgeted pictures. And you consider that lower risk proposition for the business in general and then you can build around it much more easily and also convince banks and whomever else to invest a bit of money with you to help get there faster.
TJ: Which also seems like a pretty smart VC approach. Even if you, let’s say, have only $20 million at your disposal, instead of saying okay we’re going to make one extremely big, nice … I mean $20 million for an indie film is I guess … Yeah, I mean now it’s big budget again. But I think like five, 10 years ago when that was a small film. And so instead of saying okay we’ll do one for 20 or two for 10, saying no, how can we do 20 films with that?
“Well I mean I had to build a team. Because the only way I can free up the time to work on these special projects or work on expanding the business in a different direction or whatever it is to make sure that that day to day stuff that I was doing in the first half of the day that I have staff that can take care of most of that for me so that I’m really just looking at things that absolutely need to be looked at for a short period of time. And having meetings, as much as everybody hates to have meetings, but you have those meetings to catch up.”
RW: Yeah, exactly.
TJ: One of them is bound to produce something. Just like VC funds will not invest $20 million, or maybe they will at some later stage in the company’s lifecycle. But betting $1 million on 20 companies seems like a logical thing to do. But in film I guess not everyone is thinking of that.
RW: No, exactly. And I mean to that analogy, Universal Studios is really the VC if you will or private equity for Blumhouse in that Jason had delivered a series of successful pictures for them already where they had financed the production. And so they were very eager to sign a longer term first look deal with the company to be able to … Because they knew that internally in a major studio you’re not going to make … The $5 million film that Blumhouse was making would cost them 10 or 15. So sometimes it’s smarter to outsource versus have stuff in house. So whatever participations we were able to get on success still paled in comparison to how much it would have cost them internally to make it and so it was a deal that worked for both really well. And it really funded the growth of the business because it was throwing off cash. So with that we were able to launch a distribution arm and try self distribution on our own for … Again, in this same sort of vein of low budget it was kind of low budget P&A. Get some screens, work together with Universal, and see if we can’t turn something that is not worthy of a major or wide release but maybe make some money off of that anyway. And go to the banks and raise the money so you can borrow the P&A dollars that you need. I mean that was probably the one thing that kind of worked for a bit but we quickly realized that you don’t win necessarily. It’s actually more difficult than you think to make back P&A spend and so we pulled back from that very quickly because it just didn’t work. Again, it’s one of those where the first couple don’t work, then all of the sudden the money you borrowed, okay well we don’t have much left so now what are we going to do? You can’t turn those bad movies into good ones further down the road so they’re not going to throw more money off.
TJ: Run some more Facebook ads. People will go watch it.
RW: I know. Well and along those lines we actually partnered up with some tech guys to launch an ad tech company with the express purpose of getting them to use their proprietary technology in advertising films. Every studio was putting more money to digital versus traditional media spend but the money was going to major ad companies that would basically back their truck up to Facebook with a bunch of money and say here.
TJ: Do something amazing.
RW: Send the trailer around to everybody. Without being able to track or understand how people engaged with it at all. So it was a black hole that it was going into. Anyway, the short story is with this ad tech company is that their technology allowed them to track behavior very granularly. So they could segment the addressable audience into very tiny segments and direct and redirect the spend to whatever quadrant was engaging more or less with the content.
TJ: Send it where it worked.
RW: Yeah. And it worked really well and you were able to report back and say here was the engagement levels of the spend whereas the bigger, older advertising companies were like “I don’t know.”
TJ: But we’ll probably need more money.
RW: Yeah, exactly. Probably need more money. And I’m sure it’s not perfect yet. Every technology is perpetual beta but at least it started pulling people toward some metrics that are measurable in the online advertising space in the absence of Nielsen ratings or whatever there is on traditional media. So that was, going back to my internet days of tech startup, a bunch of guys in their late 20s and early 30s that knew a lot about tech, knew nothing about movies, and really nothing about building a company, the infrastructure and everything that you need. So the president and I got to play the adults in the room as they were building the company in helping them with all of the sort of block and tackle stuff that you need to worry about and they started staffing up people and we got them more gigs because we knew the studios and they didn’t. And helping them with pricing and fundraising and all that. They’re now at, I think they’re at 100 plus employees and 100 million plus in revenue or whatever. I mean they’re doing really, really well and it’s fun to think back to being at the ground level of that and being in the room when we say hey, we should do this together sort of thing. Even within the company there wasn’t even the objective of me being hired into that company to be able to, to overuse the term incubate, another venture that I’m sure will be quite valuable to the company overall. And also it helps not only in just being an investment but it helps in learning that part of the business that is growing and changing drastically and how a traditional film company/TV company can utilize that technology for their own benefit as well. So it was very synergistic and all that sort of fun stuff. We made an investment in an online original content creation company that was started by this super young guy who is really smart and a real go getter and I mean he’s built that thing up already as well quite a bit. But since he was focused on horror and the horror audience it fit perfectly with what we were doing and was another avenue that we wanted to go into but it’s another one of those better to outsource that ability than try and build it in house. Because us old guys are supposed to build the business, we’re not creative enough to know what the content should be. But anyway, that and then of course getting an investment to explode the TV side of the business and move that brand and leverage that brand on the TV side. Which with making some of the right hires in the executive side of that business has really exploded the television side where it’s already bigger than the film side. And that really takes us to today which is why is that? Because all the money’s going to TV now as opposed to film. So companies are starving for content on that side and it’s mostly tech companies that think they have to have content to remain relevant and grow their brand and retain users and all that sort of stuff. I mean I just read the other day that Snap had a better quarter really because original content allowed them to keep their audience engaged and not lose as many people and maybe even get one or two more. Not a lot but it certainly didn’t help the bottom line as much but their top line went up. So now they’re going to go well that’s working so let’s throw more at it.
TJ: Let’s do more of that, yeah. And then of course with the wallet size the tech companies have you’re again talking like oh, let’s put 150 mil in content.
RW: Yeah, exactly. Yeah, I mean that’s why it’s an arms race that’s never been seen before in the industry with this level of money because once you introduce Apple, Facebook, Google with YouTube, and all that into the space, I mean these are companies with … I mean Apple’s sitting on almost 300 billion in cash so I mean nobody’s put that kind of money in the entertainment industry before. So now if they determine that they need content to remain relevant they’re going to throw all kinds of money at that. So that’s why now that you’ve expanded the universe of channels you’ve got to fill those channels with content and we started this arms race with only a finite amount of people that can create the content so it’s really difficult. And that’s why you’re seeing so many more coming into the space now because you got to take the money when it’s available.
TJ: That’s true. So you just mentioned all the different stages and activities that you went through there and I was wondering as there’s so much happening and different things that kind of demand your focus, how did a day in the life of the CFO look like? And how did you prioritize the activities on what you’re going to do?
RW: Yeah, I mean I think that when you tell the story very quickly it makes it sound like everything’s happening all at once, which it never is. You’re sort of doing one thing and then the other, then the other. For the most part. But of course when you’re growing a business the first part of the day is usually dedicated to dealing with what is actually going on in the business on a day to day level which you can say is just the film side of it. And then you would switch to okay where are we with the television investment or the model or whatever it is? Or what are we doing with … We’ve got a board meeting coming up on the TV side or whatever it is. It’s always one of those things where whatever you intend to do at the beginning of the day never gets done because whatever’s happening has to be attended to immediately.
TJ: Yeah, because I think that’s something that anyone who’s running a company, whether that’s a one man band or there’s 1,000 people, you always have the challenge of how do you make sure that you’re not just running around to put out fires but actually manage to carve out some time, as you said, to focus on the big building blocks, the important things. So how did you do that for yourself?
RW: Well I mean I had to build a team. Because the only way I can free up the time to work on these special projects or work on expanding the business in a different direction or whatever it is to make sure that that day to day stuff that I was doing in the first half of the day that I have staff that can take care of most of that for me so that I’m really just looking at things that absolutely need to be looked at for a short period of time. And having meetings, as much as everybody hates to have meetings, but you have those meetings to catch up-
TJ: Death by meeting.
RW: Yeah. So that they can ask me questions, I can ask them questions, and then we can have a game plan going forward whether it’s for the day, the week, the month, or whatever. But of course that introduces its own issues with do you have the right people and all that sort of fun stuff and that’s sort of what you have to manage through in order to free yourself up to do the stuff that is important to growing the business at a higher level and not doing it at midnight sort of thing. Yeah, so that’s really what it was and then understanding okay, what type of person do I need to help me out here at this point in time so that I can sleep at night and not get in trouble as well.
TJ: One thing obviously you’ve been in this industry for a long time but I’m wondering if you could go back in time and meet your 20 year old self, what recommendation would you have?
RW: Yeah, I mean probably everybody wishes they could have that ability. I guess one thing is a bit of patience. Because obviously none of this stuff happens overnight and you only gain the experience by doing it and by doing it that means time. So you have to have the patience and even though I’ve been in entertainment now probably for 18 years, there was a 12 or 13 years prior to that where I was in a completely different industry. I probably would have been better served, although logistically it would have been a difficult thing to do, to be in the entertainment industry from the beginning of my career. Because I think the people that I come across that are CFOs of other entertainment companies are quite often people that cut their teeth in their profession in the entertainment industry. So they have that much more experience. I mean I’m making up for lost time by trying to gather as much experience as possible. Because I feel like I’ve seen everything but I still feel like I can’t walk in the room and say I’ve got the 30 or 35 years that say the president at Blumhouse has because he started off basically from college onward doing that sort of thing.
TJ: But it must be an advantage more often than it is a disadvantage just to have the kind of … Well first of all for the team or the organization to have the plurality of views or opinions or ways of looking at it, but then also for you that you see things slightly differently perhaps than someone who’s in the industry for such a long time and just sees it the way they do. Because obviously there’s things that you look at maybe differently than someone that has been in the entertainment industry their entire life.
RW: No, I totally agree with you.
TJ: And I would always say that’s an asset. That’s something that is super helpful.
RW: Right. And I totally agree with you on that and I think that I’ve been able to draw on that experience, the non-entertainment experience, but I think within the industry itself because, again going back to the fact it’s a very risky business, they need to go with what’s safe at certain levels. And I think that if you can say you understand the industry, I’ve been in it for 20 years, whatever, it’s like okay great, I don’t have to worry about this person making some stupid mistake because they didn’t understand something. I’ve come across some people that agree with that point of view and say it’s great to be able to draw on that sometimes because it’s a bit of a breath of fresh air, but I think most just go no, no, no, all I want is somebody who understands the business and I don’t need to worry that you’re still learning or don’t know or whatever it is. And you also have connections within the industry. Because like I said it’s a small community so the interconnectivity of everything is really important. Yeah, so that’s why it is what it is I guess.
TJ: We talked a lot about the past. I’m very curious to hear what you think of the future of the industry, something you’re watching right now, trends, something that you think is going to be of growing relevance that others should also pay attention to.
RW: Yeah, I mean that’s a lot.
TJ: Unpack your crystal ball. Just seems like that.
RW: Yeah, I mean like I said earlier it’s definitely a land rush right now and all the money that’s in the space is going to give a lot of companies the opportunity to make it in the business. But unfortunately that money will dry up at some point in time because the tech companies that are spending a lot of money in this space are no different than the Ron Burkle’s and other individuals that have just spent their own money because they have lots of it to be in the sexy industry that is Hollywood. That all sounds great up to a point and then even they have a breaking point where they will stop losing money and say okay, I’m done. I’m leaving now. So that will happen necessarily and then the best will survive and the worst, which will be the majority, will die. So that’s sort of the cyclical nature of the industry. So that’s one thing. And then I see what we call television is not really television anymore. Film is film but the only difference between film and television in the traditional sense today I see is just the running time being different between the two and whether something is multiple episodes or whether it’s just a one off two hour plus or minus storytelling. So I just see those merging into one. So the companies that are doing both are really just going to be doing one and calling it something. Film, TV, Whatever. So I think once again the fundamentals of the business will not change I don’t think. Which is original content creation. And so the people that can deliver the content that people want to watch the most, it won’t matter how they want to view them, that will always matter. And it’s just how people are consuming them that we’re obsessed with now. So I won’t pretend to predict which avenue will win over another one, but it’ll just be multiples and the dire predictions even from 15 plus years ago of collapsing windows and all that sort of stuff in the industry I think will finally come to pass and then business models will just have to adjust to that reality. Not saying that the Netflix model or the Amazon model or whatever will necessarily win the day, because I never underestimate the ingenuity of people to come up with new and different exciting ways to deal with stuff. So that’s kind of what I’m expecting I guess. Is just how this stuff gets merged and the collapsing windows that you can really see what you want when you want where you want, and it’ll just be a matter of price.
TJ: Perfect. We’ll both review this in some time. It’s the perfect note to end it on. Thank you so much Roland for your time and your insights.
RW: Thank you.
TJ: It’s been an amazing journey and I’m looking forward to seeing what’s next.
RW: Yeah. No, absolutely. I enjoyed it very much. Thank you.
TJ: Thank you.
THANK YOU to this episode’s sponsor AXIOM Venture Capital!
If you like to get in touch with Roland directly you can connect with him on Linkedin at: https://www.linkedin.com/in/rolandwieshofer/
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Special thanks to Marni Wieshofer, Nigel Sinclair, Marc Schipper, and Charles Layton for helping to make this conversation happen.
Special thanks for their creative review go to Anouk van Ghemen and Frederik Jaeger.
Special thanks also to the team of Berlin‘s OffX Co-Working space, namely: Annika Wydany, Laura Schwarzer, and Isabella Schelder. If you are interested in a co-working or meeting space in Berlin you can find them at: https://www.offx.net/start
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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 Berlin in February 2019.
© 2019, Colibri Studios of London