Posted: May 01, 2008
Behind the screens
Golden enterprise fills supporting roles for TV, filmBy Nora Caley
She launched the business with $10,000 of her savings. Early in the life of the company, she paid herself in stock. At first it was difficult to explain what Crew Connection did. "People asked, ‘You do what?’ and I had to explain it many times," McClean says. "That is the nature of a niche business. No one has a clue what you do."
The work can be anything from capturing the tearful welcome-home when someone doesn’t lose enough weight on NBC’s "The Biggest Loser," to a visit with a woman’s family on ABC’s "The Bachelor."
"We do good, honorable stuff, too," the 57-year-old McClean says. "We do a lot of PBS and History Channel."
The crews live and work worldwide. For example, when a news program needs to tape an interview with someone in another city, or a sports show needs to put together a segment about an athlete in another country, Crew Connection finds an experienced camera crew in the area to work for a few days or weeks. It saves the production companies from having to interview, hire and even relocate people for short term, on-location work. There’s also corporate work, which means shooting training videos and seminars.
"We have a real core of people that we work with over and over because we can rely on them and they have good equipment," she says.
The crews are often small businesses themselves. "We work on a lot of different shoots for Crew Connection, mostly corporate gigs," says Julie Tatlock, who with her husband, Bob, owns 1080 Studios in Denver. "People are surprised by the type of work we do. You do not think of Denver as a city that would support a lot of productions, but it does."
As Crew Connection built its client list, McLean found another niche: outsourcing payroll. People who work on television shows and movies aren’t like office temps or freelancers. The camera and other crews often belong to a union. They need workers’ compensation insurance. Employers might misclassify employees as independent contractors and incur trouble with the IRS.
In 1995 McLean launched PayReel, which handles payroll services for the crews working on film or TV productions. PayReel handles the required tax, insurance and employment forms. On a film shoot, for example, PayReel becomes the employer of record for the cast and crew. Even if the crew was formed by the production company and didn’t use Crew Connection, PayReel becomes the employer for these workers.
It’s one less thing for a production company to handle, says Lorii Rabinowitz, whose company is Fruition Films. She’s the producer of the movie "Suburban," filmed in Colorado last year. Rabinowtiz says that of the 100 people who worked on the film, about 90 did so for only two or three weeks. A few were there for months. So Fruition Films outsourced the payroll to PayReel.
"We sent them timesheets every week, and they sent us the paychecks," Rabinowitz says. "You are super busy, especially in an independent film. You have a hundred people waiting for their paychecks."
Rabinowitz says people who worked on the movie also appreciated the PayReel experience. "When I interviewed people I asked, ‘What is the worst experience you had working on independent film?’ and they would say, ‘Not getting paid. The guy said he would pay us and then the company ran out of money.'"
McLean says 40 percent of PayReel’s clients are movie companies, mostly independent film makers. The company handles payroll for five to 10 movies at a time, including some out of state. The other 60 percent are corporate clients. Companies hire people to develop videos of meetings, events or the CEO delivering a speech. Clients such as the Comcast Media Center and Verizon Communications are the repeat customers in an industry of one-time projects.
"Corporate work is steady, and you get to know them," McLean says. "Film is one to three months and then they’re gone."
Film scarcity, corporate abundance
Moviemaking has been thin in Colorado. In March, the state Legislature’s House Finance Committee voted against advancing House Bill 1355, which would have created a $25 million tax credit program. The bill would have given a 25 percent tax credit to companies that spend more than $250,000 shooting a film in Colorado.
Kevin Shand, executive director of the Colorado Film Commission, says the defeat of the bill put a damper on the industry.
"The film industry is an incentive-driven business now," Shand says. "If you can film a movie in Colorado and spend $10 million, great. But if I spend that same $10 million in New Mexico or other states and get a rebate or tax credit back for $2 million to $3 million, why would I film it in Colorado?" Shand says of the 40 states that do offer incentives to movie companies, Colorado is near the bottom, offering less than $700,000 per year.
PayReel’s corporate work includes television projects such as segments for Food Network. Duke Hartman, chief operating officer of High Noon Entertainment, says he has worked with PayReel for years. "Payroll is complicated," he says. "There are rules and regulations, and you have to be in compliance with all the state rules and deductions."
High Noon Entertainment has offices in Centennial and Los Angeles. In Colorado the company produces episodes of "Food Network Challenge" and "Unwrapped" on Food Network, "E-Vet Interns" on Animal Planet, "If Walls Could Talk" on HGTV, and others. "When you do a shoot, you will have camera people and a lot of crew," Hartman says. "Folks need to be paid, and they may be with you for a day or for 40 days over the year. PayReel is very good at that."
He says it helps that PayReel is a Colorado company. "There are some big monster payroll companies in Los Angeles that do this for entertainment companies, but we are excited that we can keep the money in Colorado."
Crew Connection’s growth has been steady. In 2007 the company generated revenues of about $6.9 million, compared with $6 million in 2006. PayReel has had bigger growth, from $8.6 million in 2006 to $14.8 million in 2007. McLean attributes the growth to several factors.
"We saw a large increase in corporate, studio and indie film business," she says. "We got several new corporate clients, but our main corporate clients also expanded their business to us."
She adds that it helps that both companies are certified WBE, or Women’s Business Enterprise. PayReel is also classified as a Woman-Owned Small Business (WOSB). She is president of and owns 60 percent of PayReel, while Gordon owns 40 percent. For Crew Connection, the split is 87 percent Heidi, 13 percent Gordon.
"We actually got several new clients because we are woman-owned, and other woman-owned businesses like that," she says. Also, some companies keep a registry of WBE and WOSB vendors, part of the effort to achieve diversity targets and support small business.
Because of the growth, PayReel might hire a business manager this year, and maybe a software developer who can update or rewrite the software for the company’s database.
Business is thriving, as McLean figured it could in Colorado. "I did not have a Plan B when I started," she says. "It’s been part of my life for so many years."
Nora Caley is a freelance writer specializing in business and food topics. She can be reached at email@example.com.