Case Study 1: Brabham
Production company, Aurora Films, set out to write, direct and produce Brabham, a documentary film on the making of an icon: Sir Jack Brabham, Australia’s three-time Formula 1 champion. They tell the story of a son’s quest to defy the odds in the competitive world of international motor sport racing. Shot over four years, it included three trips to the UK over three years to do interviews and shoot footage, followed by one year of filming in London, Japan, the US and Monaco.
Antony Waddington, producer, and Ákos Armont, writer, producer and director suddenly found themselves in Pre-Pre Production, urgently needing someone to help them get organised:
“Filmmaking in general keeps me up at night! You seem to segue from late development into “pre-pre” without any major moment of demarcation, so suddenly you realise “we’re going!!” and you need to set up the whole structure. I wish I’d spoken to Matthew earlier and we’d had someone take us in hand and say, “this is how you’re going to structure everything, this is how you’re going to account for your development funds, this is how you’ll be doing your bookkeeping entries, from the get-go,” says Antony.
They needed help to set up a Special Purpose Vehicle (SPV), transfer significant historical development costs into it, apply for the Producer’s Offset and find alternative solutions to an expensive public offering to attract additional investors.
Of course, choosing the right accountant is critical
Antony explains, “You can’t be across all these areas of specialisation, that’s why you work with professionals. Your accountant is like your GP, they’re incredibly significant professionals in your life. So you want to enjoy working with them, and you want it to be effective and productive.”
Above the Line Accounting supported Antony and Ákos from pre-production, to shoot and post production. Initially this involved advising on the best way to set up the SPV with Aurora and Byzant (Antony’s company) as shareholders, taking into consideration intellectual property, work done to date, expenses incurred and future work. Later, there was the opportunity to source extra funding for the documentary and Above The Line Accounting provided advice on the use of crowdfunding legislation, and set up a public company for raising the additional funds.
Above The Line Accounting performed all the film’s production accounting: setting up a chart of accounts and reconciling transfers between accounts, preparing PAYG summaries and credit card expenses, and advising on accounting for overseas expenses incurred by the Australian crew. It also helped with cost reporting, preparing Producer Offset documentation, completing all tax returns and BAS, and closing the companies at the end of the project.
Above the Line Accounting worked with Aurora from 2018 to 2022, helping them get their story told. Brabham successfully premiered at the Monaco Grand Prix, Cinefest Oz and the Brisbane International Film Festival in late 2019 as part of the official selection category. Unfortunately COVID shut cinemas down several days prior to Brabham’s limited theatrical release across Australia in January 2020; however it later streamed on Stan (who did terrific promotion work for it). In 2020, it was nominated for and won Best Documentary Feature, and Best Editing at the International Motor Film Awards in London.
Antony Waddington (left), Ákos Armont (right) and Sir Jackie Stewart (centre). Sir Jackie Stewart helped promote Brabham in Australia, London and Monaco.
A $150,000 bonus via crowdfunding
The crowdfunding strategy raised an additional $150,000 for the film, providing equity to a large number of individual investors:
“Crowdsourced funding was a steep learning curve for me. I’ve had a lot of advice from Matt on those processes, so they were all done correctly. Because the last thing you want is to do anything incorrectly when it comes to tax law or ASIC. That would keep me awake at night! Matt always says “this is what the law says; this is what you must do”. He makes it easy so you say, ‘ok, now I’ll go and do that. That’s what I’ve got to do’.”
Peace of mind and a sense of humour
Having the right accountant meant Antony could relax, “because there are so many other areas you have to pay attention to. It doesn’t mean you don’t have to pay attention to it, you do, but when you’re organised it’s the comfort you have as a producer that makes a difference. That sense of being up to date and organised that working with a good accountant gives you. It’s so significant!”
And working with Matthew Carter made things easy, “Matt was so helpful, the way he helped us structure things was so effective, even when he came to the party a bit late on Brabham (our fault). He still was able to apply his templates to giving our production form from an accounting perspective. And he’s so funny. He makes you laugh along the way. I probably made him cry, but he made me laugh!”
Outstanding feedback from Screen Australia
Brabham’s Producer Offset application was approved smoothly by Screen Australia, Antony commenting, “Matt was fantastic around the Offset application. It’s such comfort knowing you’re absolutely happy being in his hands and guided through this part of the process. We got an email back from the Offset office, saying ‘thank you for the thoroughness of this submission’. They only had three questions for us, so I wrote back and said “I can’t take credit for that part, that was Matthew Carter at Above The Line. He organised us brilliantly.”
For Above The Line Accounting, the best accolade is Byzant requesting help on its next production, Helena!, a biography on Helena Rubenstein. Why? Anthony says, “I’d work with Matt in a flash, because of his rigour and honesty. He never shies away from saying ‘I don’t think you can do that, because the law says this, and you might be compromising that or this’. You want to be around that.”
Case Study 2: Cheeky Little
Cheeky Little is an Australian producer of animated content, creating animation projects inhouse, where it owns the intellectual property (IP), and partners with third parties, such as the ABC, BBC and Netflix. Having delivered well-known series for young audiences to date, like Kangaroo Beach, Vegesaurs, Spongo, Fuzz & Jalapena, Bottersnikes and Gumbles, and Kazoops, it also has animated feature films and animated adult comedy in the pipeline.
Established in 2013, the company had grown from a small to a medium-sized entity, and realised that the structure wasn’t efficient for the current size of its business. So it was looking for external, expert advice on how to re-structure and grow the business. Cheeky Little had a Finance Manager on board, but it didn’t make sense, based on its size and revenue, to employ a full-time Chief Financial Officer (CFO).
“We needed to more effectively structure the group so we could have more clear reporting to our shareholders. And we were looking for someone externally we could go to for more strategic decisions about how we grow the business, to look at the top-level side of finance, rather than the day-to-day,” recalls Celine Goetz, COO & Producer, Cheeky Little.
Using Matthew’s combined experience as a chartered accountant, a CFO for a listed company and a film producer, Matthew advised on the restructure of Cheeky Little and assisted with moving its business operations into a new service company, leaving the assets and IP in an asset holding company, and setting up a new licensing division of the company to market and leverage its IP. Seeing the value the ATLA team provided, Cheeky Little asked them to become its virtual or part-time CFO, providing an ongoing financial controller skillset.
External support is valuable in creating a vision
“It’s been really helpful having someone external for another point of reference and perspective, particularly that top-level view of our finances and strategy moving forward. What’s made a difference is having someone looking at the commercial side of our business and the revenue-generation once we’ve produced a show. Because we work in the kids’ space and one of the primary reasons we established Cheeky Little is to grow brands that have a life outside of the shows. So having Matthew’s input has been valuable in creating that vision and having a really practical pathway in how we’re going to meet it,” comments Celine.
As part-time CFO, the ATLA team provides tax services (tax and BAS returns, and bookkeeping), advises on IP issues and waterfalls to investors, and higher level accounting services, such as monthly cashflows and 12-18 month cashflow projections. The team also provides advice on Cheeky Little’s Producer Offset and the PDV (Post, Digital and Visual Effects) Offset for its Special Purpose Vehicles, benchmarking its rate card to ensure all rates are at market value, which go through to its Producer Offset and PDV.
Celine Goetz, COO/Producer, Cheeky Little Media.
With a more streamlined and robust corporate structure, Cheeky Little is more effective and efficient in meeting its future goals and vision.
Peace of mind that you can trust the figures
Improved cashflow reporting and projections, is a key management tool, enabling the team to see what happens if projects get pushed or if future projected cashflow goes negative.
“We’re now forecasting out five years and looking at how other parts of the business are going to start generating revenue over that time, which is invaluable. With Matt and our in-house finance manager working together, we’ve just got much more detailed, accurate reporting. So, as a producer involved in running a business, you feel much more at ease that you can trust the figures you’re being presented with,” says Celine.
An ideal companion piece to your in-house team
Given ATLA’s familiarity with Cheeky Little and its business, and ATLA’s depth of expertise, it provides a seamless service by supporting Cheeky Little through skill gaps or employment gaps. For instance, sourcing a medium-term bookkeeper until the business employed its own, and a skilled commercial accountant to address the commercial arm’s complicated accounting issues.
“Matthew and ATLA is the ideal companion-piece to your in-house finance team, to have that external support. And also the opportunity to expand or contract those requirements. Sometimes, if we’ve got a lot going on, he can bring on extra resources as and when we need it. Because that’s the nature of production – there’s a lot of expansion and contraction. So, that’s been really useful to have that support on top of our core in-house finance team,” concludes Celine.