Interview With Entertainment Accountant Ross Michaels

Ross Michaels, an accomplished entertainment accountant, began his acting career at 18 as a performer in New York City. During his acting career, Michaels performed on Broadway, off-Broadway, in children's theater, summer stock, regional theaters, and international productions where he also worked as a stage manager.

Michaels was stage managing off-Broadway, when the leading actress required a few weeks off. Instead of collecting unemployment, Michaels' friend discovered the overworked accounting staff on The Equalizer needed help and suggested Michaels for the job. Michaels’ accounting career "began to blossom" as he learned how to use petty cash, accounts payable, purchase orders, financial coding, episodic budgets, and payroll.

Now Michaels has more than 20 years of entertainment accounting experience including work on several films (Titanic, Friday Night Lights, Paycheck, Great Expectations) and television series (The Equalizer, Northern Exposure and Law & Order).

Entertainment accounting is one of the first departments to be hired on a project. As a production accountant, Michaels has acted as a financial liaison between the producer, the production manager and the studio. Most of an accountant's duties include setting the payroll and reviewing the cost report with the production manager and/or producer on a weekly basis. The budget entails all costs required to make that particular film (writing, producing, directing, filming, editing, etc.), and then getting the final product completed.

Cost reporting is another big responsibility of the production accountant, who must be able to predict financial changes and report them. Sometimes Michaels must fine tune a budget from the studio and decide if the production will be filming on a sound stage with facility costs or in actual locations requiring police, traffic security, and port-a-potties. On Titanic, there were 154 filming days and accounting worked in 24 departments for three years, covering three countries – the United States, Canada, and Mexico. Michaels, born in Toledo, Ohio, recently sat down with us to discuss film, fame, and, of course, finances.

Please describe some of your challenges and accomplishments.

After working in Texas on Friday Night Lights for Universal, Disney sent me to Louisiana on Glory Road to help with the rebate, hurricane evacuation (the year before Katrina) and to initiate the insurance claim procedures. Then I came back to Los Angeles with the picture to finalize and submit the Louisiana rebate documents. In those few months at Disney post-production, I worked on 13 other films to finalize their rebates and tax credits — both foreign and domestic.

I was then hired by ICON Productions to budget a couple of film projects. I met with the producers and went to work on Seraphim Falls, which was filmed in New Mexico. ICON's other project, Apocalypto, required more involvement from the studio and our project moved along just fine. In between projects, a friend asked for my assistance on the low budget film Everybody Wants to be Italian, which was shot in Los Angeles and Boston over a four week period. They just wanted to make sure all the financials were looked after closely, as their budget was not going to allow any mistakes.

Due to our recent work in New Mexico and the local tax incentives, the Seraphim Falls producer and I began working on In the Valley of Elah, also to be filmed in New Mexico, as well as Tennessee and Morocco (for the Iraq war scenes). The challenges on this picture were matching legal, health, financial, and logistical requirements of the various locations. Then I was hired for Never Back Down, which was shot in Orlando, Florida. Challenges here revolved around all the training required so the actors would not injure themselves as well as any new technical items, between film cameras, camera phones and such to create the buzz in the story line.

I then began work on The Road, based on the Cormac McCarthy novel. The challenges on this film (release in 2009) included the creative process for this post-apocalyptic film. The director did not want sets constructed to look war torn, but wanted to find pre-existing environments in real locations. We filmed in the ninth ward of New Orleans (after Katrina), Mount St. Helen’s, deserted roads in Pennsylvania… wherever we could find the locations best suited for the script.

What makes an ideal filming location in the United States? Internationally?

Having a knowledgeable local crew, transportation (via air and ground for the cast and crew), financial incentives (rebates, tax credits, beneficial currency exchange rates), accommodations, and a diversity of locations. It’s almost as if you're looking for the perfect place to vacation. You want to be able to get there easily; have a selection of nice places to stay; wide choices in restaurants and area landmarks, etc. It all begins on the script's requirements like exact locations depicted in the script and how one location might substitute for another.

When do you get to interact with stars/directors?

From an accounting standpoint for cast, generally upon their arrival. I get their necessary paperwork for the processing of payroll, per diem, and housing/hotel accommodations. Sometimes you never meet the stars as all their paperwork and payroll is handled by their management. For directors/producers, there is more contact with them regarding reimbursement of their expenses. Again, sometimes this is mostly handled by their assistants and not them directly.

What do studios typically present to cut costs?

This element is something only discussed once your project is going way over budget. If they're looking to cut big time, then they might take day(s) out of the filming schedule, which can run upwards to a couple hundred thousand dollars a day. Sometimes if a director or actor is requesting something specific, they may offer to cover that cost, out of pocket.

Did the recent writers' strike affect your work?

It did not affect my work. The Road had a script written by a British writer and therefore was not covered under the WGA guidelines.

Has the accounting process gotten more complex since new media has changed the way people entertain themselves?

For films, not much. We use software created for the industry. If you're working on a studio project, you must download and upload costs weekly, so our programs will not change that much, at least for awhile.

How has technology improved/hindered/complicated the entertainment accounting process?

Most of new technology affects the consumer more than it affects the film accounting process. New technology affects the technical ends of our business, in the camera, sound, and editing departments.

How are your current accounting team dynamics working? What are some past experiences?

The dynamics of accounting mostly rests on communication; not only within our own departments, but with all the departments working on the film. As in any business, compiling information from departments (how they're budgeting, spending, requests from other departments, producers, directors, etc.) helps put together the financial picture of any film project.

Is predicting cost changes a bit like predicting the stock market? How do studio executives typically react/understand this information?

The answer would be: D) any or all of the above. Everyone reacts differently. Some only look at costs for a specific department, but when you present a detailed breakdown of how the costs line up, questions go from being less generic (how could it cost so much) to being more specific.

It's very easy to say "X" will cost about $280,000; but if you break out the costs — airfare $35,000 times 4 trips plus airport limo pickups = $143,200, hotel will cost 49 room nights @ $350 times 4 cast/crew = $68,600, per diem @ $150/day times 50 days times 4 cast/crew = $30,000, 4 cast/crew salaries @ $1000/wk times 7 wks plus payroll taxes & fringe benefits = $37,800 — the questions can then become specific: Is first class travel necessary for all? Could it be a cheaper hotel? Could we find someone local and not have to travel them? As with the stock market, predicting costs in this business comes from experience.

Is Titanic still your longest experience? What’s your shortest experience?

Yes, Titanic is still the longest single job experience at almost two years. The television series The Equalizer comes in at 18 months and Paycheck comes in at a year. However, I've had friends on Pirates of the Caribbean and Harry Potter film series for more years than Titanic. Short jobs could just be from taking over on a project or working on a single film. Television movies or independent films may only take three or four weeks of filming. It all weighs on the budget and logistics of the location, script, and time constraints of your talent.

This profession is very specialized. Do you think people just choose not to go after it or just don’t understand it?

Generalizing of course, but it would be lack of understanding. There's a sense of "how difficult can it be to write a check?" Also it is not where the glamor of this industry is at. Most people want to be on the set, near the "action" the "stars" and "excitement" of a film project. When it comes down to it, studios want seasoned accounting talent to manage their 200 million dollar film and smaller budgets for indie films when the pocketbook must be closely watched or they won't have enough money to finish the project.

You’ve experienced a wide range of budgets. How do organize everything (the numbers, departments, etc.) in your mind before you begin a project?

I actually do this process while prepping a film, before filming begins. No matter the size of the project, the work is still the same. During this prep time, we (producers, directors, design team, accountant) learn our working styles. In most cases, you are generally working with someone new for each film, so preparation is for the learning curve. When production starts, decisions can happen quickly, so you don't have time to spend weeks on a predicament. Action usually has to happen in a timely manner. Preparation also includes setting up procedures (organizational, fiscal, legal, tax related, etc.) within the department, which it makes it so much easier to wrap a project, before turning it back to the studio or a post accountant. There is nothing more painful to have to go back and redo a procedure through each and every piece of paper when that information could have been provided up front.

Are their special awards given to film accountants?

No, no awards unless you want to call your next job the reward because if you are not doing a good job on the current film, you are not going to get another. Bad news travels the fastest in this business.

Any new theater experiences lately? Do you get any chances to act anymore?

Not really. A while back I did act in a friend's film that he directed. The timing just fit that I was available at that time. Now, theater for me is mostly attending and seeing friends who are still "on the boards." I recently saw friends in Shrek the Musical in Seattle and Nine to Five in Los Angeles before they headed off to Broadway. It's a nice plus being in various locations on film projects. It allows me to attend local arts from around the world. I still enjoy being an accountant to this day, so I probably won't be falling back on my acting career soon. Initially I set out to be a performer – to act, to sing, to dance and to entertain. I feel I still do that today, just not on stage.