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Tuesday, Mar 19, 2024

The Growing Business of Business Management

For Michael Kaplan, it’s all about making clients feel comfortable. The long-time accountant is a partner at Miller Kaplan Arase LLP, a North Hollywood firm with eight of 23 partners focused on the entertainment industry. The firm considers one of its key strengths to be business management, but one it only got into relatively recently after Kaplan joined the firm in 1996. Business managers help entertainment clients make decisions on how to spend and invest their money. Kaplan provides such advice as part of a suite of services that includes insurance, marketing, investment banking and more. “It was a smart business decision for us financially, but it just seemed like a natural fit too. We’re the quarterback. We’re holding the ball for them – the money,” Kaplan said. “From paying bills to overseeing investments, tracking payments and royalties, anything that deals with money, we’ll deal with it for our clients.” The firm represents clients across the entertainment industry, including production houses, singers, actors and directors, though Kaplan won’t name its clients for privacy reasons. He also won’t release specific figures, but revenue has been growing 5 to 12 percent annually over the last five years, supporting an expansion last year into Portland. Founded in 1941 in North Hollywood, where it still maintains a 30,000-square-foot headquarters, it now has 150 employees at five offices stretched from Las Vegas to Seattle. Adam Barr is a writer and producer who has worked in the industry for more than 25 years, including winning an Emmy for writing and production of NBC’s “Will & Grace.” Barr employs Miller Kaplan as a complete business management firm, from paying day-to-day bills such as car payments and home mortgage, to long-term financial planning. “Absolutely everything goes through them. We’re the type of client that wants to know what’s going on, but doesn’t want to deal with it,” Barr said. “The cycle for my entire 25 years has been feast and famine. When you’re feasting, it’s easy. When its famine, he’s been able to help sustain us and live the life we need to for our family until the next gig.” Complex industry Kaplan, 43, got into accounting right out of college. He graduated from UC Berkeley in 1992 with a degree in political science, but immediately went to work at the Century City office of London-based accounting juggernaut Ernst & Young, eventually joining its media and entertainment group. There, Kaplan would work with such high-profile clients as DreamWorks Animation SKG Inc. in Glendale and Saban Entertainment in Los Angeles. In 1996, Kaplan left to join his current firm, where his father Manny Kaplan still works. Paul Arase retired more than 20 years ago and the other name partner is deceased. As an accounting firm in entertainment, Miller Kaplan has to deal with myriad issues affecting the industry, including runaway production spurred by other states and countries offering film and television studios tax credits. Kaplan said the firm has dealt with a handful of tax credit applications, but that it is a small part of the business. “It’s just another service we offer and shows how we are entrenched in multiple areas of the entertainment industry,” he said. The firm’s approach is to spread the work around. For example, tax audit specialists work for both entertainment industry clients and other businesses. But he said the entire task of entertainment accounting has gotten more complicated over the last decade. One of the biggest challenges in entertainment accounting is forecasting: trying to predict the cost, and revenue, of a film or television show – which ultimately can make a huge difference in the residual checks its clients receive. And with companies such as Netflix Inc. of Scotts Valley and Hulu of Los Angeles extending the shelf life of content, it’s harder than ever. “There are definite things that go on in the entertainment industry accounting that are different. Kaplan said. “But it’s evolved over time. And it’s gotten more complex with the digital age.” Miller Kaplan Arase LLP North Hollywood Full-service firm performing accounting, auditing, business management and tax consulting for individuals, non-profits and companies, from startups to Fortune 500 corporations. Founded: 1941 Partners: 23

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