The sun never sets on Chelsea Pictures," says company president Steve Wax, likening Chelsea, tongue-in-cheek, to the British empire of yore. The same claim could be made by @radical.media. The two production companies are pushing beyond their bicoastal U.S. offices to establish outposts in Europe and, more recently, Australia. Just as multinational advertisers have been trailed around the globe by U.S. agencies, global agencies are being followed across the Atlantic and Pacific by U.S. production companies.
For @radical.media, which opened its Sydney office earlier this year, the move is part of an overall business plan. "Clients are global," says Frank Scherma, proprietor/executive producer. "For us to be able to service our clients the best that we can, we should be global as well. We’re not opening up offices because we have directors in that place. We’re opening up offices in markets because we have global clients that operate in London, New York and Australia."
"We can service our clients anywhere around the world that we need to—Australia and Asia, all across Europe," he continues. "We’ve been shooting everywhere in the world. We can do a job for M&M/Mars out of London, as well as for their division in Australia."
To Wax, there are two driving forces behind opening offices outside the U.S.: being able to represent overseas-based directors in all markets, and cutting out the fees paid to companies outside the U.S. for production services. "You don’t want to compete with another company for the availability of your own director," Wax says. "A lot of English directors are very busy. It’s hard to get their time for U.S. jobs. It’s very smart to have an English office so that you’re not competing for your director with somebody else. Secondly, when we shoot, say, in South Africa, we use Moonlighting [in Johannesburg], who are good, but we have to pay them a fee to produce our job. At some point, if you have enough production, it makes sense to have an office there and avoid that fee."
Chelsea has had a presence in the U.K. for five years through its partnership with Joy Films, Chelsea director Mehdi Norowzian’s London production roost. "We’ve been very active for years in London, and I realized that Australia is like the next London—the next creative center," Wax says.
Chelsea opened in Australia two months ago after Australian director Alex Proyas, formerly of bicoastal/international Propaganda Films, was signed. Both Chelsea and @radical operate full-service offices in Sydney representing local Australian directors as well as those companies’ full directorial rosters. Chelsea’s Sydney office is comprised of executive producer Topher Dow and directors Steve Rogers, David Gaddie and Proyas. Executive producer Loewn Steel runs @radical.media’s Australia office, which counts Aussie directors Jeff Darling and Nick Robertson, as well as Australia-based Bruce Hunt, on its roster.
"[Australia] not only has great creative [coming] out of their agencies, but they have really good production facilities, crews and such," says Wax. "Plus, the exchange rate gives us the ability to do productions in a creative way. There is a post company called Animal Logic [Moore Park, Australia], that is the equivalent of The Mill in London. So, we’re finishing projects down there as well as shooting them."
European Outpost
Propaganda Films has operated a London office for its roster of directors for about six years. When the company assembles a European shoot, it taps the resources of London-based affiliate Academy Films. "In terms of servicing the clients in local markets, there are differences in the ways in which countries do business," says Colin Hickson, VP of Propaganda Commercials. "There are differences in the way the advertising work is put together in the U.K. It’s important that we’re serious about doing it that way."
Although Propaganda has no plans now for a Pacific Rim office, Hickson indicates there is interest. "We have had Australian directors and I think that it is a very interesting market and something that we are definitely contemplating," he says, adding that Propaganda is looking into Pacific Rim representation.
Bicoastal Hungry Man has Matt Beuls, a producer, in London. He is the contact for European agencies and facilitates production by Hungry Man directors. But overall, the company’s overseas activities are minimal, says Dan Duffy, Hungry Man’s West Coast executive producer. "We do most of our work in the States," he says. "We’ve done a lot of work for European clients, but much of that was shot here, so we don’t necessarily have to get involved with too many overseas production companies."
Duffy says Hungry Man is getting regular work out of Australia, and though it would consider adding an office there, "We have no definitive expansion plans. Primarily, the goal of all our directors is to do the best work that is available, whether it’s in the States or London or Canada or Australia. The biggest determining factor is what the creative is, what the ideas are."
Neither Chelsea Pictures nor @radical.media has any concrete plans for further expansion. "We’ve always tried to be New York-based," says Wax. "We always said New York was a very cosmopolitan city that looked on the world with the broadest view. But we finally opened an office in L.A. because you have to have one there. Then we made the arrangement with Joy in London and opened in Australia, but it’s always been from a New York base. So I think that’s about it for us, although someday we might open an office in Toronto."
Wax says about $10 million a year in work comes in through the London office, compared with more than $20 million a year in the U.S. "We hope to [have] $4 million or $5 million in Australia for starters, and we expect it to grow from there," he says.
Scherma’s reaction to the prospect of opening more offices: "I hope not. We can deal with every country now. I don’t think we set out to open up five offices around the world. It just evolved into what we felt the business needed to be."
Opening overseas offices isn’t exactly a piece of cake, but neither Wax nor Scherma makes it sound like a daunting experience. Chelsea’s alliance with the Minneapolis-based, publicly held iNTELEFILM Group, whose holdings also include The End and Curious Pictures, both bicoastal, provided the necessary backing for the Australian venture. "The additional financial power and intelligence that comes from that big an organization has made it much easier to open up in other cities," notes Wax.
Wax says the tax and legal issues of setting up a U.S.-based business in another country were relatively easy to work out, with input from iNTELEFILM. "What gets complicated is you have to figure out how you’re going to do the accounting and insurance," relates Wax. "We’ve been mostly tangled up in digital issues lately. We electronically transfer spots and images, proposals, location pictures and casting among all the offices. The minute we come into another office, we get into all sorts of situations. They don’t have DSL in Australia. They only have ISDN and T-1. We’re going through a major upgrade right now with Joy Films so that it’s easier to do transfers."
Establishing the Sydney office was made easier by the signing of Proyas, who in addition to his spotwork, is known for feature films such as The Crow and Dark City. "Having Alex makes a huge difference," Wax says. "Suddenly he is seen as a director who is interested in commercials again because there’s an office there where he’s active. Commercials are being made out of his office, even if he’s not directing them. In a short time, that will make a big difference in terms of the projects he gets down there."
Finding the right people in a new country is the challenging part for Scherma, who didn’t move any U.S. personnel to overseas outposts. "When we went into London, we didn’t want to be an American company raising our flag and saying ‘This is how we do it.’ We went in and tried to understand how the British system worked. … We wanted to understand the business culture of each place and adapt ourselves to it."
One point Scherma and Wax emphasize about their global operations is that the various offices are part of one system, and jobs aren’t in any way segregated by office. An American agency can and will hire a director out of Australia to shoot in Europe, and vice versa, and any other variation.
"You have to be able to put any combination together that works best for the job," Scherma says. "Jeff Darling just did General Motors’ ‘Deconstruction’ for Berlin, Cameron & Partners, New York [that was shot] in Los Angeles. Bruce Hunt is doing a Levi’s spot for Bartle Bogle Hegarty, Singapore. We’re doing the spot in Australia. I’m bidding jobs for American directors to shoot down in Australia and New Zealand with clients from London. It’s our desire to try to be really good at what we do. To do that, we’re better able with the offices in place to service our clients in those places."
