One CA's journey in the film industry, as financial reporting manager at Lionsgate
As Financial Reporting Manager for film and entertainment company Lionsgate, Gemma Flight CA’s role involves everything from contributing ideas for film posters to adapting financial reporting for an industry in a permanent state of flux. Anna Melville-James brings the popcorn
If you’ve watched a new film or binged a must-see TV series recently, there’s a good chance you’ve enjoyed the work of Gemma Flight CA. As Financial Reporting Manager for Lionsgate, a motion picture group and global content platform that encompasses eight film labels, she is in pole position to watch the fruits of her labours. For behind every blockbuster release is a great accountant – and Flight knows better than many the obstacles that must be overcome to bring film-making magic to reality, including the challenges presented by the pandemic to an industry already in a state of flux.
I don’t know many companies where I would get the chance to give my opinion on a film poster idea, for example, or to read scripts. Being able to see the creative side and how these things work through to the numbers makes it incredibly worthwhile.
A self-confessed “numbers person”, she started her CA journey at EY, working as an auditor for banking and capital markets, after graduating with a maths degree from the University of Southampton. “It was an excellent learning experience; I got to see every level of a huge business, and multiple different accounting styles, while also doing my CA qualification” she notes.
But after three years in the banking sector, Flight was keen to experience a different type of company and industry. “I’m passionate about working for a company that allows me to see the real-time, everyday positive impact on people’s lives,” she says. Intrigued by the scope of the entertainment and media industries, she joined Lionsgate as Financial Accountant in 2017. “Ironically, I ended up on the opposite side of the fence,” she says. “The auditors for Lionsgate are EY, which is useful because I’m often asked: why do the auditors need this? I know the answers because I was there and I’ve done it all.”
Her promotion to Financial Reporting Manager in April 2020 coincided with the pandemic’s bite on media businesses everywhere, which meant a huge challenge to provide solutions. Fortunately, the company culture was conducive to such rapid development. “In a corporate company you have a well-defined ladder – you can see your journey quickly,” Flight says. “In a smaller company, you drive your own development more, and you’re able to seize opportunities if you see a gap in a role or function. That’s something that is made easy at Lionsgate, because there is a culture of listening. I always feel I can speak to management about an issue, whether it’s something I think could be changed or my own professional development.”
Past Lionsgate productions have included such big-screen hits as La La Land and The Hunger Games and small-screen cult sensation Mad Men. The company’s film releases have grossed almost $10bn (£7.4bn) at the box office in the past five years. Flight is a particular fan of the Keanu Reeves-starring John Wick franchise and World War II movie Hacksaw Ridge, although she admits that outside work she prefers bingeing on TV series to blockbusters. But it’s the process that makes it all possible that is where her interest really lies.
“Often, we get the chance to see these productions develop, which is exciting,” she says. “Lionsgate is so inclusive – it makes you feel as if you are driving the success of the business. I don’t know many companies where I would get the chance to give my opinion on a film poster idea, for example, or to read scripts. Being able to see the creative side and how these things work through to the numbers makes it incredibly worthwhile.”
While daily experiences can involve a stroll past the odd movie star sitting in reception, stardust starts with the numbers – and it is the finance function that provides the engine for the business of entertainment. “I’ll walk down the street and see a film poster that we threw around ideas for, or go for drinks with friends and they’ll talk about a film – and I know I’ve seen that process from start to finish,” Flight says.
“The finance function of a media company is pretty similar to other industries or sectors though, but there are a few accounting rules that are specific to this, surrounding the valuation and amortisation of our film costs. We also have to focus on performances on a title-by-title basis, so there’s a lot more forecast analysis than in many other industries.”
For such a big role, Lionsgate’s UK finance team is surprisingly compact – only 14 people, including accounts payable, accounts receivable and the forecasting team. But, as Flight notes, this makes them an extremely efficient and agile unit.
“My day-to-day is dependent on the time of year and what the reporting deadlines are at that point,” she says. “I spend a lot of time preparing and filing UK statutory accounts and getting them through all the auditors, but also on tax filings, HMRC correspondence and government reporting.” Delivering on big-picture projects such as structural changes throughout the company also keeps her role varied and engaging.
“I love spotting the opportunities for efficiencies,” she says. “Our long-term projects include focusing on automating a lot of our IT systems, making sure the information we’re providing to the business is fast and accurate, because the strategic decisions that need to be made, need to be made quickly. I love thinking outside the box, but at the same time I also love audit and the challenge that auditors can provide by asking questions like ‘what is happening here?’ – and being able to investigate and give the answer myself.”
Key to Lionsgate’s success is the strong relationship between the company’s US offices, with its larger finance function, and the UK team. Flight’s remit is EMEA, but she is in daily contact with her transatlantic counterparts. “Because we’re a listed company in the US there is a lot of reporting to do and upwards collaboration that is needed,” she says. “We work together as a global company, and strategically we’re all here to support the business with any direction or advice that’s required.”
That advice and direction from finance functions has been the difference between sink and swim for businesses over the past 18 months. Retreating to homeworking from their office behind London’s Oxford Street, the Lionsgate UK financial team swung quickly into action during the pandemic, aided by a “flawless IT team” and a lot of video-conferencing. “I now know colleagues in the US by face that I’d only ever known by name – and their cats and kids too,” Flight laughs.
The broad knowledge base and organisational skills gained during her CA qualification have enabled her to adapt quickly, not only to any new tax rules and accounting standards, but also the huge shifts in working patterns. “The initial lockdown period was about making sure we were still part of one big machine and working seamlessly together,” she says. “We had presentations early on which ran through each team’s function, purpose and goals to keep us all in a collaborative model. Lionsgate, generally, has been and continues to be excellent around the pandemic – it is flexible and focused on what the individual wants, which is so important now.”
And what the individual wants is what the market wants to give them in this atomised viewing age. One of the ongoing trends, accelerated by the pandemic, has been the huge diversification into on-demand and streaming platforms. Lionsgate had already acquired its own, Starz, in 2016 – and while cinema releases disappeared almost overnight in 2020, captive audiences grew exponentially, watching films digitally on TV platforms and streaming services as lockdown turned trend into habit. “There was an entire shift over to that side of the business, which helped to balance the effect on us,” says Flight.
For Lionsgate, though, with the future of entertainment hurtling towards it, the expertise of its finance function was key to cushioning the impact. “All of a sudden there was a huge demand for content, and we had to work through the uncertainties in a fluid landscape,” she says. “On the other side of the business, a lot of our productions were halted for quite a while during the pandemic. The pressure was minimal on our team – because our systems and procedures were so robust, the team could take on the changes that were happening. A lot more analysis was needed for different types of releases, however, and on how that would impact the forecast.
“There’s now higher demand globally than there was before though, as we begin to get back on schedule – and for the highest class of content, which is great. We’re excited to see what happens over the next few years on the back of the changes that have happened.”
The late screenwriter William Goldman’s maxim that “nobody knows anything” has long been a favourite in the film industry; that goes double in the age of the “new normal”, whatever that may turn out to be. But Flight believes there is a high probability that cinema will continue to be the jewel in the entertainment crown. “The movie industry loves the cinema, and we want our consumers to see films in the cinema, because that’s the best place to see them,“ she says. And with big-screen attendances now bouncing back to somewhere near pre-pandemic levels on the back of a couple of huge recent releases, her analysis looks healthy.
“Cinema will always be a revenue generator,” she notes. “In the end, though, there are so many more options now and such high demand for them. But these changes offer a lot more opportunity for analysis – and for the consumer to be able to enjoy more great films and TV productions. And that can only be a good thing.”
ICAS training partner BPP has a six-course introduction to budgeting and forecasting