Phil Roman Title: President, Phil Roman Entertainment Inc. Age: 70 Education: Attended Los Angeles Art Center. Career turning point: Establishing his own animation studio, Film Roman Entertainment Inc. Most admired person: Walt Disney Personal: Married, no children. Phil roman takes a look back at the ups and downs of the business side of the animation world Veteran animator Phil Roman has worked with some of the best American animators, from Walt Disney and Bill Hanna and Joseph Barbera, to Bill Melendez and Chuck Jones. Then in 1984, at age 54, Roman started his own studio, Film Roman Inc., with three employees and $200,000 in sales that first year. By the time the company went public in 1996, it had 320 employees and sales of nearly $30 million. Just as important, Roman gained industry-wide recognition for several highly successful shows including “The Simpsons,” produced by Gracie Films. But managing a publicly-held multi-million dollar business, it turned out, was not something Roman was well equipped to do. Add to that a sea change in the animation market that squeezed independent studios, and Film Roman failed to turn a profit in each year since it went public. In 1999, Film Roman lost $6.9 million on sales of $32.9 million and its stock price was trading at less than half its initial offering price of $10 per share. A management shakeup in that same year saw Roman replaced by a new CEO. And the company’s founder opened Phil Roman Entertainment in Studio City, a boutique shop where he could once again focus on the creative product. This year, the company projects revenue will be between $500,000 and $600,000. Meanwhile, Film Roman has continued to struggle. A merger deal with Pentamedia Inc. of India fell through in April. And earlier this month, the company reported a net loss of $2 million on revenues of $3.7 million for the quarter ended Sept. 30. That compared with a loss of $374,491 on revenue of $5 million for the same period last year. Roman, who remains the largest shareholder in Film Roman, was invited back onto the company’s board of directors earlier this year. Question: What projects is Phil Roman Entertainment working on? Answer: “The Gaudins” is a cartoon being produced in Barcelona and London that is going to be out next year, but I’m also working on “Atomic Betty,” a show that we just showed at MIP Jr., a festival for animation producers in Cannes (France). It got a lot of attention there and we’re really happy with the response. But we also have a live action show, called “Junior Lifeguards,” which is looking really good. We hope to see them on next year, but I can’t really talk about them yet since the networks are still trying to find space for them on the schedule. Q: Where do you get your ideas from? A: Sometimes from a comic strip that already exists. Other times, it’s a voice like Howie Mandel or Tone Loc. They have voices that are very distinctive and you can create a show from that. I remember I went to see Howie Mandel perform and he did this voice and said “I’m Bobby,” and I immediately imagined an animated show with kid with that voice. That’s how we did “Bobby’s World” for Fox. Q: Why do you think “The Simpsons” has been so successful? A: It’s funny. It’s smart and it makes people laugh because they have interesting characters and good stories. It’s in its 12th season and it’s still going and that’s a tribute to the people who do the show. Q: Why did you decide to start your own studio? A: I was already 54 years old and I got to do everything I wanted to do but I didn’t have my own studio and I wondered what it would be like to have my own studio. So I started my own studio and did my first Garfield special (“Garfield in the Rough”). I started in 1984 with three employees and subcontracted out a lot of the work. We got a contract from CBS to do a series of (specials based on)Garfield after that. Q: What was the turning point for Film Roman? A: In 1987 CBS wanted to buy “Garfield” for Saturday mornings. So they bought it as a sort of a head start for the ’88-’89 season. So we went from one to two half hours a year to 13 half hours so we had to expand and double my staff. Then the following year, 1989, “Garfield” was the number one show Saturday mornings and CBS made the show into an hour and doubled our revenue. Then in 1990, we sold a show to Fox, a cartoon show called “Bobby’s World” with Howie Mandel and we doubled again. Q: Why did Film Roman go public? A: We got “The Simpsons,” “The Critic,” and other shows and we were just expanding and growing with shows that were pretty well received, so by 1996, we felt we had a pretty good thing and that we wanted to do some proprietary shows that are part of our library so that’s when we decided to go public in order to (get financing) to do that. And we did some of those shows, but the market started changing. Q: How has the animation market changed in the U.S. A: Nothing is being done in this country anymore, it seems. There’s very little market for independent producers here. The main market now is in Europe. The government passed this financial syndication rule that allowed networks to produce and own their own shows. Before they were just broadcasters. And so they started to produce their own shows and not buy from independents and, if they did buy from independents, it would be for a very low licensing fee. It got very convoluted. Q: How does an independent animation producer survive? A: Now you have to get a partner in Europe or in Canada where there are subsidies to partner with you. Because with a low licensing fee, you produce a show at a deficit so you have to make it up by getting a partner and you in turn give them rights for the show overseas or a particular geographic area. So you cover your deficit and make a little bit of a profit. But you have to be creative. Q: What’s the downside to this new market? A: Making the deal takes longer than actually doing the project. You have to do a lot running around, meeting network executives, finding partners, working with accountants and all these other people. Q: People used to say that by moving animation to Asia, it would kill the animation industry in the U.S., but that didn’t happen. Why? A: Budgets were getting smaller, so you had to cut corners and make deals with foreign producers. But that made animation affordable and as a result, the networks ordered more animation. You could do better animation because all the creative parts were done here, the storyboarding, the writing, the voices, the design. You ship the labor intensive stuff (drawing and painting) and you could get that done fairly reasonable over there. But for features, the big studios have their animators here. Q: In 1999, you left Film Roman. Why? A: I went to art school, not business school, so I wasn’t a businessman. In 1999 a new CEO was brought in, so I figured that the company needed a businessman and the board agreed. I was no longer involved in the creative side, talking to writers and directors, but doing business and it wasn’t attractive anymore. I enjoyed working with writers, but now I was dealing with bankers and accountants. So I left and founded this little place. Q: So why did you come back this year? A: I was asked to come back and be on the board. The company felt that I could help on the creative side and with business contacts. It’s my first company and it has my name, so I have a little bit of pride about it and I want it to do well. Q: What’s it like to be majority stockholder and on the board of a competing company? A: We don’t compete directly with Film Roman, since they do different kinds of projects. But I’d like to see it succeed and continue on. At one time it was the premier company for animation and I’d like to see it regain some of that. Q: What are some of the problems facing Film Roman as a public company and how are they different from the challenges you face as an independent animation producer? A: They’re the same problems. You’re dealing with the same buyers and they’re dealing as a public company and I’m dealing as a small independent. But I can react a little quicker in some areas and because of my lower overhead, I can compete at a lower level. It’s different companies. They’ll make $50 million. We’ll make between $500,000 and $600,000 this year.
