Entertainment industry payroll firm Cast & Crew Entertainment Services has joined a growing trend in Hollywood – tax incentive financing. The Burbank company started a division last month that makes loans to film and television production companies using tax incentives and credits as collateral. Cast & Crew lends the money upfront and is paid back when the producers receive their incentive benefits. Deirdre Owens, a veteran of film financing, was hired as vice president, production incentive financing. With 44 states offering production incentives it has become almost required that both the studio and independent producers use incentives. “For the foreseeable future this will continue to be a core piece of the financing puzzle,” Owens said. Cast & Crew enters into a growing market for incentive financing. Competitors include commercial banks, Three Point Capital, a specialty lender with offices in Manhattan Beach; Owens’s former employer Grosvenor Park Media Ltd. in Santa Monica; and Entertainment Partners Financial Solutions, also in Burbank. Incentive financing is increasingly common because the incentive itself is an asset, said Ron Cogan, vice president of communications at Entertainment Partners, which started its financing division two years ago. “The key is to work with a specialist – you need an experienced and knowledgeable partner who has mastery of the legislative analysis, financing structure and production needs,” Cogan said. The first feature film that Cast & Crew financed was “The Cobbler,” a comedy starring Adam Sandler, Steve Buscemi and Dan Stevens. Financing for Voltage Pictures, the Los Angeles production company, came from New York state tax credits. The film had a budget of about $10 million. Spotlight on Chatsworth The entertainment industry’s move toward LED lighting has been so good for lighting systems manufacturer Litepanels the company ran out of production space at its Van Nuys location. To prepare for additional work and adding new product lines Litepanels relocated to Chatsworth in a building twice as large as its previous space. The company finished the move during the holidays in December. Litepanels had the option of moving out of the Los Angeles area but wanted to stay close to its roots and keep jobs local, said Chris Marchitelli, vice president of global marketing. “It allows us to do more work in-house, has improved the workflow and we are seeing more efficiency and getting more product out the door,” he said. Litepanels was founded in 2001 in Burbank by a group of former gaffers – electricians handling the lighting plans for television and film productions. The company is now owned by Vitec Group plc, a British entertainment service firm. Litepanels LED systems have been used on cable series “Breaking Bad,” NBC drama “Chicago Fire,” by the Turkish Radio and Television Corp., and to brighten the set of NBC’s coverage of the just concluded Winter Olympic Games in Russia. The benefits of LED lighting are they use less power and generate less heat than conventional light bulbs. On a broadcast set that means a drop in air conditioning costs, Marchitelli said. “The lights pay for themselves in less than three years based on those savings,” he added. The search to find a building that would best fit Litepanels’ manufacturing operation and office needs took about eight months. The Chatsworth location, at 20600 Plummer St., has features not found at the previous one, including two loading bays, space for a testing lab and video and photo studio, and more office and meeting space. If the company’s growth projections remain on target, Litepanels will add employees in 2015 and 2016 and have seven to eight new products in the lineup by mid-2015, Marchitelli said. Disney Accelerator The next big thing in entertainment technology starts off small. That is the bet Walt Disney Co. is making by creating a business accelerator program. Ten startups will receive $120,000 in financing and the opportunity to meet and consult with Disney executives, entertainment industry leaders, venture capitalists and other entrepreneurs. Disney is partnering on its Disney Accelerator with Techstars, a Boulder, Colo. accelerator that has a similar arrangement with other major corporations. Disney is the second Burbank entertainment and media company to start an accelerator. Last year, Warner Bros. Entertainment brought to its lot the Media Camp program that sister company Turner Broadcasting had been doing in San Francisco. Media Camp is open to startups with an existing product for a three month program giving access to workshops focused on media technology, formal mentorship from media industry experts and an initial $20,000 investment with the potential for future commercial agreements. Staff Reporter Mark R. Madler can be reached at (818) 316-3126 or [email protected]
Burbank Firm Has Incentives for Making Loans
