Posted By Donna On 13 Feb 2013 . Under Featured Story Tags: American Idol, avatar, Columbia and Paramount Pictures, Global Entertainment Holdings, Global Universal Entertainment, HBO, Hollywood Entertainment, James Caan, Merrill Lynch, Ridley Scott, You’ve Got The Part!
Gary Rasmussen, CEO of Global Entertainment Holdings (OTC: GBHL), talks with the Opportunist’s Managing Editor Leslie Stone about how technology is changing the movie industry, his favorite film projects and what’s in store for the company in 2013.
Global Entertainment Holdings is a publicly-held entertainment company that, through its wholly owned subsidiaries, Global Universal Film Group, Inc., and Global Universal Entertainment, Inc., is in the process of developing, financing, producing and marketing motion pictures for worldwide release. The high quality films feature recognizable name talent and yet are produced at a fraction of the cost of big-budget studio films, says Gary Rasmussen. “Technology has reduced the barrier of entry into film-making. Movies are being made today for as low as $10,000. Take ‘Paranormal Activity’ for example. It cost $35,000 to make and made $100 million in the box office.”
According to Rasmussen, Global Entertainment’s financing strategy is designed to significantly mitigate investment risk utilizing tax incentives, distribution advances and/or pre-sales, gap financing, economies of scale inherent in back-to-back film production and deferment of the company’s production fees. “We are very lean. We don’t have a huge studio or huge budgets. This
makes us competitive in this new environment. In 2012 we streamlined our company and got our overhead down. We are now showing a profit.”
Opportunist: How would you describe yourself, Gary?
Rasmussen: I am what I’d call a serial entrepreneur because I have been involved in many businesses—mostly public companies—from brokerages and mortgage investments to cable TV and a nutraceutical company.
Opportunist: What is your background?
Rasmussen: I grew up in Grosse Pointe Park, Mich., near Lake St. Clair and Windmill Point, which is about six miles from downtown Detroit. As a teenager, I played with a rock band in Detroit and we opened for performers such as Jimi Hendrix, Janis Joplin, Steve Winwood and Procol Harum.
In college, I obtained my Commercial pilot’s license with Instrument and multi-engine ratings. I was also a Certified Flight Instructor for about 12 years. While attending Western Michigan University, I was the Dean’s personal pilot, which entitled me to a 75% discount on my tuition. I also got paid $1.60 an hour, for a minimum of eight hours, to fly the dean around. I was a great gig! [Laughs]
Right out of college I took a job with Merrill Lynch in New York. They said I was the youngest broker they had ever hired at the time. They were reluctant to hire me at first because I was only 21 (their minimum hiring age was 25 at that time), single and already a commercial pilot. The psychological battery they gave me revealed I was a little bit too aggressive and adventurous and might not stay long with the company. They were right. The next year I used my training to open my own broker-dealer and eventually we expanded to four offices and about 100 brokers. Besides many individuals, some of our larger clients included the Michigan public school employees’ retirement plan, a union pension plan, a Southeastern Michigan Indian tribe, many auto dealers and we even did the original offering for John DeLorean after he left General Motors.
Opportunist: You have certainly had an interesting life. So how did you get into the entertainment industry?
Rasmussen: It’s related to my work in cable TV. I bought out a small cable system owned by actor James Caan and some point in time, the mid-nineties I believe, we sold out to Times Mirror when they merged with Warner. I was looking for something to do—I had already financed a couple of films that turned out to be a pretty good investment and I realized that independent films could be made relatively inexpensively and had the potential to make huge returns.
Opportunist: Where do you make your films?
Rasmussen: Where we know we can get a tax credit. We shoot for at least 30% tax credit. And, if we get investors in on it we can take advantage of Section 181 [of the U.S. Tax Code], which gives us a 100% write-off and saves our investors usually about 35 cents on the dollar. If we know we can get any kind of sales from distribution or minimum guarantees, then maybe we can get another 15% to 20% that way. Basically that’s what we can do to mitigate risks. Let’s say we make a film for $5 million, we can usually get up to $4 million covered with deferments or tax credits or presales or distributor’s incentives. That leaves us with $1 million to raise—if we cannot do that then something is wrong—and that means practically no risk for the cost of the film. Even if a film never does anything at least we are not out anything. I believe ‘all boats rise with the tide,’ so to speak. If one film is a hit and the others aren’t that one blockbuster will give us a boost. My business partner, Jackie Giroux, has a lot of experience in guerilla filmmaking. Jackie is one of the few producers that can honestly say they have produced all their films on time and on budget. She is also a writer and has directed several films. Jackie has produced about 17 independent productions both here in the states and in Canada.
Opportunist: What obstacles, if any, has Global Entertainment had to overcome?
Rasmussen: A major recession, for one. And the government changing and pulling up tax credits. We were producing several films in New Brunswick, Canada, when they pulled the plug on their tax credit program in 2011. Iowa and Michigan did that as well. But we have overcome it, partly because our overhead is really lean and we have a lot of smart people on the team. Each of our executives has 30 years of experience in our various fields, which means we all have a little bit of gray hair. [Laughs]
Opportunist: How do you choose film projects to become involved with?
Rasmussen: We have a committee that reviews films and determines if we can pick up distribution on it and can get the rights to talents to go into it. Our chief operating officer, Dan Sherkow, started off with Times Mirror, which became HBO, and also worked for Columbia/TriStar and Paramount Pictures and has several major films under his belt. Alan Bailey, our chief financial officer, served for 35 years as senior financial executive and treasurer of Paramount.
Additionally, Jackie Giroux has tremendous ‘hands-on’ experience in budgeting, casting and independent production and has written over 60 screenplays. In fact, she wrote most of the films in our library, including the four films produced in Canada. Together, I believe this team has the experience and track record to guide our company in determining which films to produce, where to produce them, what cast to hire and what the budget and other financial considerations will be.
Opportunist: What changes have you observed in the movie industry?
Rasmussen: We are moving into the information age where everything is digital. You can download a major release onto your computer or your handheld device or to your TV. Everybody thought pay-per-view would be huge but today with Netflix and Hulu and the Internet in general you can make more profits on a film much quicker. If a motion picture does have a theatrical release I believe it will be there for a few weeks. People want things quicker and faster. Many years ago, the industry was dominated by the big studios that used to make 100 or 200 films a year. Nowadays, over 10,000 films are made per year, mostly by independent film producers. There has to be a quicker cycling of films from production to the audience. That’s why funding is quicker and with faster distribution to public outlets such as the Internet. The industry, and especially distribution, is becoming more fractionalized. No longer is it just theaters and TV and DVDs. Now you’re seeing a plethora of new markets. Some films are meant for the Internet. Other films are electronic downloads via Netflix. And we have those big Red Box(es) on the corner where we can rent movies for a dollar.
Opportunist: We understand you recently entered a joint venture with a Chinese owned entertainment company.
Rasmussen: Yes, Hollywood Entertainment EDU Holding, Inc. Through their affiliated office in Beijing, EEDU offers training programs for Chinese students who wish to study the advanced methods of film and video production in the United States. Our partnership will allow us to engage in the co-production of live action feature motion pictures, as well as 3D animation and video game creation. We are also working with Jimmy Lifton to start a film school in Los Angeles. Lifton operated a successful film school in Michigan, retraining laid-off auto workers for the film industry, before the current governor pulled the tax credits and the film industry there dried up.
Opportunist: Are there any other recent developments?
Rasmussen: In an attempt to capitalize on the reality-based programming trend and the popularity of Hollywood, we have formed a wholly owned subsidiary called You’ve Got The Part, Inc.
Opportunist: Please tell us more.
Rasmussen: You’ve Got The Part will be casting small roles for a real Hollywood film that anyone with a digital camera or cell phone can audition for online. Let’s say you want to be in a film with Matthew McConaughey. You can download our app on your cell phone and read your lines and then upload the video onto our website (www.youvegotthepart.com) and people will vote for you.
There is a small upload fee of 99 cents. We will fly whoever gets the most votes out to Hollywood to be in the film.
Opportunist: That sounds like the film industry’s version of ‘American Idol.’
Rasmussen: It is very hard to start getting credits with no experience. Everybody looks you up on IMDB.com and if they see you there they know if you’re really in the business or not. You’ve Got the Part gives anybody with access to a cell phone camera the opportunity to be in a real Hollywood movie.
Opportunist: What is your favorite genre of film?
Rasmussen: The sci-fi genre. I would like to explore the origins of where we really came from. Did you see the Ridley Scott film ‘Prometheus?’
Opportunist: No, I haven’t.
Rasmussen: It’s about the crew of the spaceship Prometheus who follows a map showing a star system that was found among ancient artifacts on Earth. I am fascinated by the Sumerian Tablets that were discovered back in the fifties. They had to be interpreted by super computers as their language was very difficult and contained about 400 characters (like letters) with no vowels. They wrote about how Earth was basically occupied by an alien race thousands of years ago. These tablets are online and you can see the tablets themselves, and their respective translations, at Oxford University and one of the universities in Chicago as well. I find it a fascinating study just reading what these people experienced thousands of years ago. It is so laborious to write on clay tablets in cuneiform and I believe they were recording history as they saw it—not a fictional story. What is really amazing is how closely this ancient history parallels the Old Testament of the Bible, which came thousands of years later.
Opportunist: Would you consider making a movie about it?
Rasmussen: It would be a major undertaking like an ‘Avatar.’ That is a little out of our reach at this juncture [Laughs] but, you never know, given a couple of good years it might be one of our greatest film projects.
Opportunist: Which of your projects were the most rewarding?
Rasmussen: They are all pretty rewarding. One that was fascinating was ‘Hostage Game,’ formerly known as ‘American Sunset’ (http://www.americansunsetthemovie.com) with Corey Haim. Our team and his mother and friends actually became pretty close.
Opportunist: What was he like to work with?
Rasmussen: I really liked Corey; he had gone through a bad phase in his life, like so many child actors. But now, he was a better person for it and was on his way to making a great comeback. He had traveled full circle. We shot four films in Canada from 2009 through 2011. One of those films, ‘American Sunset,’ starred Corey Haim. It was his last released film and, in his own words, ‘…one of my best performances! I want everyone to see this film.’ On the set of ‘American Sunset,’ we called him the ‘Comeback Kid.’ However, God must have had other plans for him, as he died suddenly in March of 2010.
Just two weeks before he died, I was at a barbecue at his house. The press immediately assumed he died of a drug overdose, but he had completely cleaned himself up and was making a new start in films. The official autopsy report stated that his lungs filled with water from pneumonia. That was quite a shame. He was fascinating to work with. He was always joking with everybody and did not need time to prepare to get into character. He could instantly transform into the role and become a whole different personality instantly. Many actors take a lot of time to concentrate and prepare for their role. Corey was the only one I knew —maybe because he was a child actor—who, at the snap of a finger, became a totally different personality and owned his role in a very believable fashion.
Opportunist: What is the most satisfying aspect of your work?
Rasmussen: There is no blueprint. We are covering new territory every day. We might be dealing with the Chinese or Wall Street one day and then undertaking a new movie project the next—and then there is the film school, which is quite diverse. My children are grown and I do not have to worry about time limitations or family activities. I can pretty much work 24/7 right on through the weekends.
Opportunist: Who inspired you to get where you are today?
Rasmussen: My mother. She was not only an entrepreneur in various businesses as I was growing up but also a pilot of both fixed-wing aircraft and helicopters. She was the 188th woman to receive her helicopter rating and the 13th woman in history to become a commercial helicopter pilot. She is 79 now and lives in Florida. I would say that, definitely, she was a major inspiration in my life to get into business.
Opportunist: Can you tell us about any upcoming film projects?
Rasmussen: We are working with David Zucker, a long-term friend of Dan Sherkow’s, our chief operating officer. They were in high school together in Milwaukee. Zucker was on the Paramount Studios lot when he did ‘Airplane,’ all ‘The Naked Gun’ movies and some of the ‘Scary Movie’ series. He is one of the most successful directors in Hollywood and he came up with a movie called ‘The Secret Secret Service.’ Along the lines of ‘Airplane,’ it’s about some goofballs that guard the president. That’s one of a slate of films we have planned.
Opportunist: That sounds hilarious.
Rasmussen: It is hilarious. I saw of clip of what the movie is intended to be. Filmmakers today are able to test the public’s appeal by producing a short mockup on a computer or even a few scenes with a digital camera and actors, before spending millions of dollars to actually shoot the film. David Zucker told me he’d rather produce his new film as an independent production, working with a firm like ours, than go with a studio where the budget would be much larger and he would have less control. A small firm like ours can operate more efficiently and have access to the same crews and stages as a studio, without the enormous overhead of a movie studio. In fact, our offices are on the lot at Raleigh Studios, with full access to crews, stages, etc.
Opportunist: Is there anything you would like to tell potential investors?
Rasmussen: I think people should start taking a look at Global Entertainment Holdings (OTC: GBHL). We are very lean, efficient and our overhead is practically nothing. We are showing a small profit for the quarter ended December 2012. There are roughly 30 million shares outstanding, which is a relatively low capitalization, and there are only about four million shares in the float. Everybody wants to buy a stock when it is down in the pennies. If they didn’t and then it does make a rise, they wish they had bought it when it was down low.
Opportunist: What’s in store for Global Entertainment in 2013?
Rasmussen: We know the economy is turning around. We have a successful track record and we are drawing the attention of the right partners, diversifying an entertainment conglomerate and 2013 is going to be the start of something great for us. We might want to do more than movies someday. We have started to diversify. The American financier Bernard Baruch, who advised some of our U.S. Presidents on economic issues, once said it’s wise to ‘bet on the jockey and not the horse.’ That’s one of my favorite sayings because I think we have a tremendous jockey team riding this horse.
Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in the Orlando area.
You’ve Got The Part!, Inc. – www.youvegotthepart.com