Theatrical payroll provider Checks & Balances. Screenwriting software firm Final Draft. Live events payroll specialist CAPS.
In the last four years, production payroll services firm Cast & Crew has acquired all of them, building the Burbank, Calif.-based company into one of the largest end-to-end providers of software and payroll services for the entertainment industry.
Cast & Crew’s late-November acquisition of Sargent-Disc — the U.K.’s to provider of production payroll and residuals services — takes it a step further, giving the company a firm foothold in Europe.
Cast & Crew’s CEO Eric Belcher and president John Berkley spoke with the Media & Entertainment Services Alliance (MESA) about the importance of the Sargent-Disc acquisition, and what it means for the company’s future.
MESA: This acquisition gives Cast & Crew a firm foothold in the U.K. What does Sargent-Disc bring to the table?
Belcher: One of the things we’re really excited about is that as the industry’s insatiable demand for content continues, a lot of the clients we currently have in the U.S., the studios, the streaming companies — Netflix, Hulu, Amazon, Apple — are creating more and more content, and a lot of that content is being created in the U.K. Producers and content creators love going over to the U.K., where there are great production incentives. Sargent-Disc has been a leader there, a family-owned business started in 1986, and is pretty much the only entertainment payroll company in the U.K. They’re someone we became more and more interested in as we looked for ways to service our existing clients that work overseas.
We’ve worked with Sargent-Disc in the past, and if Warner Bros., as an example, can take a large motion picture, go over to the U.K., use our production accounting system, we’ll pay the U.S. hires, and they’ll use Sargent-Disc to pay the locals. This gives us the opportunity to align that business. It also fulfills one of our strategies for global expansion, as we look at productions around the world, and the U.K. is obviously a gateway to that.
Berkley: On the product and technology side, one of the reasons we’re so excited about this, and have been excited about Sargent-Disc for a long time, is we really have a kinship with them in digitizing the production process, including the payroll process and all the related human resources functions that are required on set when you’re doing film and television production, as well as all of the related financial and accounting processes.
We have a really common view about what the opportunities are to digitize and automate, but also applying all of that to all of the nuances and complexities that go on in this industry. We see the world in very similar ways, we like what Sargent-Disc has done in terms of their CrewStart [software] product and the various systems they’ve built for both payroll and accounting, and how they’re guiding their clients — and our mutual clients — on the journey toward a digital future.
We’re doing the same thing here in the U.S., we see that challenge similarly, and are impressed with the work they’ve done. We’re excited to join forces with them, and do that on a global scale.
MESA: The Sargent-Disc name and the company’s staff will remain intact, and the company’s leaders Laurence Sargent and Lara Sargent will continue to oversee operations. How important was it to keep the company name and staff on board when finalizing the acquisition?
Belcher: Them staying on was key for us. Laurence and Lara Sargent are second generation, following company founders John Sargent and Marija Sargent, and they’re really terrific, running an employee-centric company, similar to how we run our company. And they really take care of their customers, focused on service, another area we’re aligned on. Having the two of them continue with the business was critical. The Sargent name and brand is well-known in the U.K. entertainment community.
In the past, when we acquired CAPS — which does payroll for commercials — we realized the CAPS name, within their target audience segment, was strong.
Berkley: Our acquisition strategy, with CAPS, with Final Draft, with Checks & Balances, and now Sargent-Disc in the U.K., all great companies with great brands, is about growth. These are investment acquisitions for us. We want these to be complimentary. Keeping the name, keeping the staff, keeping their products intact, looking for ways to make one plus one equal three, is the way to go.
MESA: Speaking of CAPS, Checks & Balances, etc. This is Cast & Crew’s fifth acquisition in just four years. Where does Sargent-Disc rank, how important is this one?
Belcher: It’s important because the market is growing so much, on a global scale, and our clients are working over there. Sargent-Disc has a lot to offer us. Ranking our acquisitions is difficult because each has fit a different strategy or target we were going after, whether it was Broadway and live events with Checks & Balances, or production payroll and music tours with CAPS, or a big data play around scripts with Final Draft.
In this case, the international aspect makes it special for us, and we’ve been looking at the international market for a long time. It’s gratifying to align and join forces with them.
Berkley: Obviously, [Cast & Crew parent company] EQT is an extremely international oriented private equity sponsor, they being from Europe themselves. We’ve been excited about the U.K. market for a long time, and with EQT’s ownership we’ve been able to double down on the concept of our global expansion, and the U.K. is huge market for us, our clients and the industry in general. And there’s more international expansion to do.
MESA: Looking at the entertainment relationships Sargent-Disc has made over the years, was there anything that caught your eye going into this acquisition?
Belcher: I think that their work with all the major studios — who all do work to one degree or another in the U.K. — and our work with them was a major piece of alignment. The other thing was they have a host of U.K.-based entertainment companies and producers that come over to the U.S. That’s going to open up opportunities.
We have a bond company called Media Guarantors and we have financial services that finances tax credits for productions. We’ll be able to take those financial tools to the U.K., and work with Sargent-Disc to grow that part of the business.
The big studio clients were what we first noticed, and that’s why we were pretty familiar with them to begin with.
Berkley: We have a really good footprint in the U.S. with the studios and large-budget franchises, and that’s a lot of what goes on in the U.K. as well. We’re really well-connected with Sargent-Disc with those relationships.
MESA: What’s next? You’ve got five recent acquisitions under your belt, going to make it an even half dozen any time soon?
Berkley: We’re always looking, and with the industry growing so much, what studios and production companies need is growing. We think about growth in terms of markets, both international and segments of the entertainment industry, and the products and services we can build or acquire. We’ll certainly continue to be inquisitive.
Belcher: We’re in an exciting business. This explosion of content, Cast & Crew and others that serve this industry are seeing tremendous opportunity, and we want to make the most of it. Sargent-Disc is a great addition to our family, and we’re looking forward to working with them.