What’s the connection between FP&A and Taylor Swift? To answer this the FP&A Today podcast from Datarails is joined by Michael Stotland, Vice President of FP&A at AEG Presents.
AEG Presents is one of the largest live music companies in the world, and most famously the concert promoter behind the $1 billion dollar revenue Eras Tour by Taylor Swift: the highest grossing tour of all time.
For good measure, Stotland’s FP&A team also supports the tours of Paul McCartney, Katy Perry Elton John, and the Rolling Stones, and 25 music festivals, including the iconic Coachella Valley Music and Arts Festival, along with Stagecoach, the New Orleans Jazz Fest, hangout Fest, electric Forest, and Firefly.
In this blockbuster episode, we want to teach you how FP&A feels (apologies to Swifties):
Michael Stotland VP of FP&A at AEG reveals in conversation with host Glenn Hopper:
- How growing up in Los Angeles the entertainment industry the entertainment industry was a natural choice, and starting my career at MGM
- Spreading my wings at 20th Century Fox
- Building up the FP&A function at MarVista (a TV and movie production company showcasing nearly 2,500 hours of content) and the story behind a facing a “fantastic year” during COVID FP&A leadership at AEG helping live entertainment “ return from the abyss”
- “Seeing the financials bounce” back as pent up demand was realized
- Pulling external data into daily FP&A work
- Heatmaps on beer costs and price of living as part of FP&A planning
- Managing 3 areas of FP&A at AEG: General, systems and business strategy units
- The FP&A dimension of Taylor Swift Eras Tour
- Using local macroeconomics to impact business decision-making – from the UK to Singapore and the US
- How Television revenues and licensing of big movies saves movie studios
- FP&A swiftness when Kanye West bowed out at the last minute at Coachella
- Using AI to look at past events and ticket sales and performance on a contribution margin basis
- Looking to optimize how we do FP&A and ambitions to become CFO
- Links between FP&A and my triathlon career
Connect with Michael Stotland Vice President, Financial Planning & Analysis at AEG Presents: https://www.linkedin.com/in/mikestotland/
Further Reading:
Rolling Stone: Taylor Swift’s Eras Tour Is the Highest-Grossing of All Time and First-Ever to Hit $1 Billion
Investopedia: Swiftonomics: The Economic Influence of Taylor Swift
Datarails Blog: How FP&A makes Huge Hollywood Hits
Full transcript
Glenn Hopper:
It’s not very often we get to put FP&A in the same sentence as Taylor Swift, Ed Sheeran, and Katy Perry. But that’s what we have for you today as we’re delighted to be joined on FP&A Today by Michael Scotland. Michael is the Vice President of FP&A at AEG Presents one of the largest live music companies in the world, supporting the tourists of artists such as the aforementioned Taylor Swift, Paul McCartney, Elton John, and the Rolling Stones, and 25 music festivals, including the iconic Coachella Valley Music and Arts Festival, along with Stagecoach, the New Orleans Jazz Fest, hangout Fest, electric Forest, and Firefly.
Prior to this role, Mike spent over five years at MarVista Entertainment initially as the director of FP&A before being promoted to vice president. His career journey also includes notable positions such as senior finance manager for TV distribution at 20th Century Fox, and working in FP&A at MGM, he holds an MBA in finance from Pepperdine Graziadio Business School and a BA in finance from California State University Northridge. We’re thrilled to have Michael join us today to share his insights on FP&A.
Glenn Hopper:
Welcome to the show, Mike.
Michael Stotland:
Yeah, thank you for having me.
Glenn Hopper:
Loved reading about your career and can’t wait to hear some of the stories you have. And looking at your background in FP&A and then the industry that you’ve gone into. I guess two part question, what led you to FP&A and how did you end up in the entertainment industry?
Michael Stotland:
I can go back to the beginning on this, and I, I’ve always been pretty inclined towards numbers and metrics. I ran cross country and track in high school. I ran cross country and track in division one at Cal State Northridge. And it was right around the time where Garmin Sports Watch was having its renaissance where you were getting metrics around times and pace, stride length, heart rate, oxygen saturation, and all of these things were areas that, that I was, for all intents and purposes, obsessed with. And I had decided that I wanted to have a career where this was kind of a, a focal point where I could look at numbers and metrics and, and tell stories based on that, make determinations. And I was an econ major in undergrad. I had changed to finance after that simply because I found econ to be fascinating, but largely theoretical and something a little bit more practical.
And I grew up in Los Angeles. The entertainment is the large industry here, whether that’s the studios or, or that is live entertainment. I spent a long portion of my career at the studios starting with MGM. I was there for a couple of years, but a year into it the company, went through a leveraged buyout, and I left to 20th Century Fox without, you know, there, there was no guarantee of employment on the other side of the LBO. So went to 20th Century Fox, really got a chance to spread my wings there. You know, learn the business, learn how studios operate, and films get produced and distributed. And I got my MBA while I was working full-time there, and following the MBA wanted to spread my wings a little bit more. And I made the jump over to MarVista, which was a significant change because 20th Century Fox was a company of 10,000 or so, and MarVista was a company of 70.
And, and I really got a wide range of experience building up FP&A function at Marvista, and taking the skills that I had learned at the larger companies and implementing systems and getting us out of Excel heavy world and helping that company grow. And then I ultimately, during Covid, there were certainly a lot of challenges, but it, MarVista was a TV movie production company. A lot of people were at home watching TV content. We had a fantastic year. And for me, as an FP&A person, I thrive on solving problem on finding those issues that, that need a solution. And when it, the world is for all intents and purposes on fire, we had this, this really successful year, and I found this opportunity to go to live entertainment during a time where live entertainment wasn’t really allowed. And to help the company reemerge from the abyss, for lack of better words, has been a fantastic experience. And I’ve really enjoyed my time here at AEG,
Glenn Hopper:
You know, post covid , the the world getting back to normal and watching that sort of return to business, that’s gotta be satisfying to watch <laugh> something come back like that and to do it through an FP&Alens. Oh,
Michael Stotland:
Absolutely. It’s being able to see the financials related to the bounce back. There, there’s always talk about how much pent up demand there was, but to actually see those, those metrics come to fruition. And then of course, you, you had mentioned Taylor Swift and Elton John, you know, all of those tours picked right back up and you, you really see it in the financials.
Glenn Hopper:
Yeah, and it’s, I I was also thinking, and I I hung up on your early studies in economics because I talked to a lot of FP&A people, and I, I always think there’s an, there’s some alternate universe out there where I went and got a PhD in economics, and instead of doing FP&A podcasts, I was some policy wonk, you know, sitting in a think tank or whatever going through it. But I, I wonder, you know, because you had the interest in economics and, you know, the, the theory is, is fun and interesting, and man, going through COVID, you know, what greater exogenous factor could we have dreamed up of, you know, trying to roll that into FP&A, but I wonder, does that sort of economics base find its way into your, your approach to FP&A, do you find yourself like trying to pull external data in when you’re doing your, I mean, I guess you, in this industry, I guess you’d have to really, but pulling stuff from the, whether it’s the FED or or what or whatever into your FP&Aforecasts
Michael Stotland:
Abs. Absolutely. You know, we, in this industry, we operate on luxury goods. You know, no one, no one, the price elasticity here is, is sensitive because if we start increasing ticket prices, you can see a precipitous drop off in demand. And so we, we definitely factor those in. We’re, we’re consistently looking at, at heat maps and, and how we, we price the product and how, you know, how much beer costs at a venue and relative to the, to the cost of living in the location where that venue exists. So yeah, we’re definitely factoring in the macroeconomics into our pricing decisions.
Glenn Hopper:
Yeah, that’s great. And I can’t wait to dive into that a a little more, but I guess to give us a, a little bit of a foundation, maybe let’s, let’s back up and look at just, we’re very practical here because this is, you know, by FP&A people for FP&A people. So we really like to think about and understand the different team structures and sort of the, the key KPIs and metrics that you’re tracking. So first, I mean, maybe give us a little bit more of an overview of AEG, and then let’s focus on how your team is structured there and, and what kinds of metrics and KPIs you’re tracking.
Michael Stotland:
We segment our business into a few lines of business, namely, we have our, our venues business, we have our festivals, our tours. We also do artist management, and then we kind of have our corporate really G&A cost center. And the way that my team is segmented is my direct team that works with me on, on the corporate function in LA we we’re split up. I have three distinct areas. One is primarily focused on budgets, forecasts, financial reporting, the, the general day-to-day FP&A requirements. I have a systems team that’s responsible for the day-to-day management of our forecast tool, our process both from a development and a troubleshooting standpoint. And then I have a third group, which are mostly business strategy folks, and they’re tasked with analyzing strategic initiatives, acquisition targets, and, and located those business efficiencies. We’re global, so we have offices all over North America.
We have offices in Europe, Asia, and Australia. And I have local FP&Afunctions in all of those offices. And the the rationale is, and this goes hand in hand with what I mentioned, is we are looking at local macroeconomics in terms of our business decisions, and we need those regional executives to have local support from the FP&A folks who are closer to the product, closer to, you know, to the venues that are local to them, and our just closer to the business. And so it is, it’s constant because there’s a time zone factor, as I mentioned, I have folks in Singapore and UK. It makes things interesting, but we are very much global and we make sure we’re staffing appropriately.
Glenn Hopper:
Gotcha. And I guess having the, the FP&A personnel in country, it me means they’re more embedded rather than just reporting to someone at corporate. And do you find, I mean, I guess it, it’s knowing the local country and culture and, and what’s going on there, but as far as being able to work with the other groups in the business, do you find that that’s more beneficial than having everyone centrally located?
Michael Stotland:
Absolutely. There’s a lot of overlap in these businesses. We’ll, do, you know, we have global tours that’ll span all of those regional offices and territories, but we also have local artists in, in our Asia office. We’ll have local artists that span the Pan Asia countries that will never necessarily see in North America. And I won’t ever get any exposure to that. And when it ultimately comes down to, we’re all storytellers, and for me to be able to consolidate our entire company, which is made up of more than 120 companies, I need my locals to be able to synthesize that information for me, so then I can then report that up to our c-suite.
Glenn Hopper:
Got you. And are they, I mean, I, I would imagine they are, but are the KPIs and metrics the same across all countries and, and regions that you’re looking at?
Michael Stotland:
For all intents and purposes, yes. We’re, we’re looking at ticket sales relative to, you know, and ticket sales drive all of our downstream ancillaries, not all, but most, that’s the most important metric. But it’s, it’s ticket sales relative to similar shows, similar artists in other areas, you know, as a percentage of capacity. It’s looking at per person spend on food and beverage. You know, it’s, it’s very normalized across the board for all of our businesses. By and large, the drivers of the business don’t change a whole lot. There’s certainly local and regional factors, government regulations that will impact some of this, but for the most part, it is a normalized.
Glenn Hopper:
Gotcha. And I was, it’s funny, as you, as you were talking about the, the food and beverage sales going and then thinking back to our economics conversation, I was like, I bet you have a version of like the Big Mac index where you’re like, <laugh>, so a beer in the US is this, and then you, what does that translate to? And absolutely. Whatever the other countries and all that. Yeah.
Michael Stotland:
A a beer in LA is gonna be more expensive in, in our venues than a beer in Columbus, Ohio.
Glenn Hopper:
Yeah, exactly. Yeah. So, yeah, so even within the same country, obviously different markets will pay different. That makes, makes sense. Thinking about, you know, all the different industries and then the, the caliber and the, the level of celebrity and, and recognition and how everything is driven by who this artist is and, and what kind of crowd they’re drawing. And I’m thinking about what is it, Swiftonomics <laugh>, which is Taylor Swift’s economic influence. You know, everybody knows this, but a sense of, of the scale of Taylor Swift, I mean, the ERAs tour has grossed what, more than a, more than a billion dollars so far, I think. And I’m wondering for something that big, what, what part does, or what part can FP&A play in an event for, you know, big artists like that? Or maybe even like, you know, your less known artists than that.
Michael Stotland:
So there’s an interesting stat when it comes to the Taylor Swift tour, and in North America, the average person spent $1,300 to attend a show. It’s an astronomical figure when it comes to, to shows, especially because you go to a local theater and tickets can be as low as 20 bucks, and you go to a stadium show, and you’ll usually spend a couple hundred bucks, but 1300 and, and it, and they all sold out, and they all sold out in record time. And, you know, this was such a unicorn of a tour. There’s a level of appreciation being on the inside looking at it, knowing that we may not see another tour quite like this in our lifetime. She did 50 some shows in North America, and Elton John’s farewell tour was over 300 shows. And, and she obliterated the, the gross that that Elton made.
And, and Elton sold out every show. It’s, it’s just fascinating to watch from an, from an FP&A standpoint, you know, this business is a difficult business. Margins are pretty thin, and we have to very, very, very carefully manage our cost structure and our pricing models, looking at heat maps and, and understanding how we can, how we can optimize and maximize these things. The costs to put on a tour like Taylor’s, or even festival like Coachella is eye-popping. And so the dollars that you see going in and out are expansive, as you noted, a tour like Taylor’s can create micro economies of their own in the cities that they go to. And another example of that where the city of Indio benefits greatly from, from these events and the amount of people that, that go to that city, if we didn’t have our arms around the costs associated with these things, it would be really, really difficult to make profit margin.
We do make most of our margin on volume because of that, because they are thin. But that’s, that’s where FPA really comes in, is to make sure that we’re, we’re keeping these things in line. It’s really easy. You, you’ve heard the phrase, death by a thousand cuts, really easy to see a little bit of, of cost overruns here and there. It’s not on their own. They’re, they’re minor, but then collectively they’ll add up and it, it creates a big red mark on, on the P&L and l. That’s where, that’s really where we come in on these, on these big events.
Glenn Hopper:
Yeah, and that’s, I’m, I’m sure this is way more detailed than we could cover <laugh> in the show here, but just now thinking about that and how you evaluate the KPIs that you’re tracking and everything on these tours, you have a new artist take your pick at what, whatever level of, you know, your A list or B list or whatever, or it’s you know, these, these bands from the seventies that are new <laugh> reformations of for the 10th time of a band, and they’re playing at state fairs and all that. If you’re evaluating an artist in a tour or a festival, you know, what’s your starting point? Do you look at their previous tours? Do you look at comps? Do you look at, you know, where they are now, the Spotify plays, like what, what all goes is, is factored in when you’re considering that and budgeting for it? It’s,
Michael Stotland:
It’s a little of all the above that you, you just mentioned, it is definitely a factor of popularity. It’s a factor of what kind of buildings that they’ll be able to fill out relative to their status. You know, is it, is it an artist that we need to put in a 500 cap room or, or a tour of 500 cap rooms where we can get their name out and and grow them? Or is it an artist like Taylor or the Rolling Stones where we’re putting ’em in stadiums and nowhere else? That’s a big factor of it. And it comes down to the ultimate driver of all of this is how many tickets do we think we can sell? And we have a team dedicated, a data team that studies similar artists, similar artists profiles to understand some of the history here. There’s certainly negotiation here with artists and the agents to understand, you know, what kind of tour we’re, we’re planning and, and how we intend to grow them. Someone that plays arenas and, and stadiums probably isn’t gonna wanna play the small theaters and clubs. That’s, that’s not an end all. We have some theaters and clubs that are high capacity rooms, but nothing like an arena or a stadium. And, and once, once an artist gets to that level, they’re not necessarily going backwards, not unless it’s for some special event. All of these factors are considered when a tour is proposed and artists are secured.
Glenn Hopper:
I know this is true of a lot of businesses, but there are so many variables and things you have to account for here. And when you build out these forecasts, and it’s, I I think probably even more highlighted because the margins are so thin. So you’ve gotta be really spot on with your, with your forecasting. So thinking about the nature of the work that you do, what would your assessment be? What do you think are the most critical skills that would translate, you know, in your industry and beyond for basically just your most critical skills for success in FP&A? And I guess maybe with all that, have you seen these evolve in recent years, thinking about, you know, with the advent of advanced analytics and more and more automation and more and more data?
Michael Stotland:
Absolutely. There’s, there’s an internal joke that I had with, with some folks on my team. ’cause As we developed a lot of new metrics and a lot of new ways to analyze this business, someone asked me, well, how did they do this before, before we had all of this data? And I said, I, I think on a hope and a prayer, I’m not entirely sure, <laugh>, and, and, and somehow they made it this far. But you know, you’re right. It’s, you know, a critical skill in my view. It’s really developing a, a smell test. It’s, it’s being able to sniff out those problem areas and, and create solutions for them. There’s no problem that’s too small. It’s, I I mentioned death by a thousand cuts in our business. You know, what, what we sell tens of millions of tickets and if, and so we analyze our revenue streams, our cost structures on a per person basis.
And so if you’re able to get 50 cents more on a, on a per attendance basis, that’s $5 million to the bottom line. And that’s what I meant is, you know, there’s really no problem too small. And I’ve made a career out of solving those types of issues in terms of getting additional data, getting, building additional metrics and reporting, and really systemizing so much of what we do. I’ve grown to this point in my career by fixing problems. And some of those problems aren’t necessarily even problems with the operations of the business. Some of those problems are just in the way that we operate internally. Some of our controls that are in place or not in place, depending on how you wanna look at it, on the way that we process data, the way that we report data, all of this stuff, no company does it perfectly, and there’s always ways to do it better.
And it’s creating those efficiencies, creating those optimizations that is really gonna move the needle in the long run. And I don’t know what the opposite of death by a thousand cuts is, but the idea here is you, you keep solving these small issues and it ultimately builds up. I’ve many times over my career, almost at every company I’ve been with, I’ve pulled us out of an Excel heavy world and implemented some sort of, of system, an FP&A tool, an EPM solution. I’ve worked with a number of vendors. I’m currently in the middle of a, of a project, and I’ve also implemented in the last six, 12 months the use of Power bi. I I taught myself how to write DAX measures. I retaught myself how to write SQL queries because I, it’s been maybe 13 years since I last used Microsoft Access.
So I had to, I had to reteach myself how to write a query, but I’m leveraging a lot of the data warehousing that we’re currently doing in, and, and data’s just languishing there, no one’s necessarily using it. And I’m finding that there’s so much rich information that I’m now just waiting in that water and trying to, trying to make heads and tails of it, and how can I incorporate this into my reporting? And I’ve, I’ve started to build new reports. I’ve been working with my locals to build similar reporting outta Power BI, and it’s those skills that I think are critical. And then with that is, is curiosity. I find myself talking to so many people across different operating functions to understand their day-to-day, what it is that they’re doing and why they’re doing it, what kind of data do they have, and how can I get access to it? How can I marry that up to the financials? How can I find where those synergies are? And I almost hate using that word because that’s so MBA of me, but <laugh>, it’s it’s, it’s, you know, how do I find those intersections that I can really build off of and, and produce information that is actionable? And, and that would be, you know, anyone that’s looking to grow and, and build skills and, and be successful in FP&A. I think those are all absolutely critical.
Glenn Hopper:
I love to hear what you said about talking to the other departments and finding out what data they have. And I’ve, my approach when I come into a company as CFO, I’m, you know, introductions to the finance team and all that, that’s great, but beyond that, the first thing I’m gonna do is, alright, we’re gonna walk through the customer lifecycle from prospect, lead generation, all that. What data do we have up here? What, you know, what do we, are we using the CRM correctly? What, you know, we have project management tools. Let me me look at that too. And I’m, and then I love to just jam it all together and start finding spurious correlations or whatever <laugh>, make assumptions off of them and all that. But we, truthfully though, I mean, that’s and, and you more and more in FP&A, and that’s why I think the, the term business partnering is getting, you know, is, is used more often now because it’s really, it’s not just take us out of that ivory tower of finance and accounting and let us be embedded in the teams and understand all the data, because we can use all of it.
Michael Stotland:
Absolutely. I mean, you know, it’s, the budgets and forecasts are the bread and butter of what we do. And there’s no getting away from that. And, and they’re certainly incredibly important and critical to, to business function. But I I couldn’t agree more that the FP&A function itself has moved away from that. It’s, it, it seems that’s just kind of the regular course of business. It’s really the real value that we’re providing is those business insights. Is bridging the gap between what our marketing folks are doing versus what our talent bookers are doing versus what the venue operations folks are doing and figuring out, are we underpricing our own food and beverage, or are we overpricing it? Could we sell more? So there’s any number of, of ways to find those efficiencies across those, those functional teams. It’s just navigating that, that environment and figuring out what those are.
Glenn Hopper:
You’ve really nailed what we do in FP&A. So first it’s making sense out of all that data, aggregating it and turning it into something useful. And then you, earlier you referenced the storytelling. What we haven’t talked about is you aggregate all this, you, you have the data and you know what the KPIs are, but so much of what we do is that storytelling. Maybe could you walk us through your process for developing FP&A reports, like I’m thinking about whether it’s a dashboard or a quarterly board meeting, you know, whatever the, the kind of the regular package that you’re putting together and talk about, you know, what you’re thinking about as you put that together. And then any tips or tricks you’ve learned for how to better communicate information to whichever stakeholder, whether it’s management investors or, or, you know, whoever the report is going to.
Michael Stotland:
You know, it all ultimately starts with having an idea of what your end goal is, what is the message you’re trying to deliver? But if it’s just reporting a forecast or a budget, then it’s gonna be your, your standard P&Ls and some detailed reports behind them. But if it’s beyond that, if it’s an analytical report, if it’s evaluating our, our show costs, if it’s evaluating our ancillary metrics, the, the idea here, and what I found at least over the course of my career, is most folks who are, who would be taking action relative to this information, they don’t have time to sit there and wade through a spreadsheet full of numbers and try to understand it. They want to know what they need to know today and now, and then move on to the next thing. And it’s really finding a way to not to convey the right message, have all the, the correct backup, but have it be very succinct and really provide the information that, like I said, is necessary.
If you don’t start with the end goal and work backwards, you’re gonna find yourself building a lot of spreadsheets and realizing that you can’t necessarily use them or put ’em in front of anybody. It becomes data for the sake of data. And, and so it, it really needs to be a deliberate exercise. You’ll find yourself spinning your wheels a lot less working backwards. And then you also might find that if you had an idea of what it is that you wanna present and your data starts to yield a different result, that’s fine. You can at least pivot on, on what the presentation was. It’s certainly possible. You, you thought you were gonna present bad news and your, your data’s actually indicating, oh, actually this is good news. It’s taken that time to build out what it looks. And for, for all intents and purposes, this is actually how I approach my power BIbuild is, especially with a system like BI or, or any sort of EPM tool, you the level of rework that has to be done.
If you find that you’ve gone completely off the path that maybe you had intended, or now you’ve decided, oh, you know, I, I should have done this a different way, is very labor intensive to, to rework it all rather than to do it right from the, from the first, from the first step. And it’s, I say this from experience because I’ve done plenty of rework. And knowing what I know now, I would’ve already had an idea in mind of how this is, how this needs to be done and how this needs to be the most efficient way. But everything hinges on how engaging your presentation is. And I’ve found that if I just stick a spreadsheet full of numbers in front of people, their eyes glaze over and, and the meeting is generally unproductive. For me personally, my brain thinks in numbers. I enjoy data and details and, but I, I think I’m the exception to the rule in most cases. I can sit with our head of marketing and she’s absolutely brilliant, but her brain works differently than mine does. And I have to pivot in the way that I present to her in a way that’s engaging for her, that that is meaningful in terms of how she runs her, her marketing departments. And so I have to be very specific in who I present to and what I’m presenting to them.
Glenn Hopper:
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Earlier when you said, you know, you have to start with the end in mind. And of course, as finance folks, you know, we can’t have an agenda. The data is what the data is, but we need to know that why part of it.
Yes. so like knowing, okay, I’m setting out to report this and but let me understand how or why this happened, but maybe in that why is where it comes out, oh, wait, this actually isn’t bad, because here’s the the reason. Absolutely. And this is a positive trend, something that’s happening under the hood. Absolutely. And I think another big part of the storytelling and being able to get the right message across is you have to establish that level of trust with the rest of the, the management team. So it’s the trust is, you know, <laugh> don’t report any numbers that you ha that you haven’t triple checked and, and all the standards there. But I, a big part of that, especially as we have more and more data, and we’re using more and more of it for our modeling, is thinking about data quality and data management.
And I think that a lot of FP&A pros right now, it’s just we want, you know, whether you’re using traditional statistical modeling or modeling in Excel, or if you’re using some kind of machine learning modeling, you want as many data points and as many features and parameters as you can that are gonna help you make a better model. But as with the amount of data that you’re dealing with, I mean, what strategies are you using or that have you found effective for ensuring that the data is accurate and that you can trust the integrity of the data? Like what is your approach if you’re, whether you’re defining a new metric or verifying existing ones, how, how are you dealing with the data situation?
Michael Stotland:
Yeah, I, you know, the, the, the phrase it takes a village comes to mind. I have the benefit today in working at a company where we have a lot of departments and, and they are segregated such that they own a certain portion of data. And there’s some level of trust that I, that my accounting team and the data I’m getting from my ERP is correct and accurate. There’s a level of trust that the folks who are running our CRM and our booking tool are putting in correct data. And I’m getting good information that comes from the forecast now, FP&A as a function, we are sort of the, the, in my view, the the last stand here in terms of ensuring that data’s correct. I certainly find accruals that have been booked that I question. I certainly see forecast data that’s coming out of our booking tool that I question, but that’s, that is part of that job of data governance and making sure that I’m getting good data, is looking at that level of detail.
I, I don’t always have the time to be in the weeds, but I do enjoy being in the weeds and asking those questions. It’s really building strong teams around that. It’s making sure that the systems in place aren’t operating in silos, that they’re aligned in, in some form or fashion, that you have those checks and balances baked in. That, that it’s not just data that goes into a system and just lives there and people can pull it, but it’s not marrying up to anything else. We, you know, we look at how our accounting actuals are coming in relative to what went into our booking system. We look at what’s in our forecast relative to everything else, those other two systems as well. And we’re also comparing, we’re looking for those anomalies, right? Did someone input something that, that looks really off? And, and, and that’s where the metrics help. If suddenly you see that one year a venue was, was averaging $8 a person in food and beverage, and all of a sudden they’re going up to $15, it’s like, whoa, what’s going on? And FP&A is a huge function in creating those checks and balances and creating those integrity of that data.
Glenn Hopper:
So I’ve always pushed for, I feel like finance should own all the metrics in the company because I just, you know, we’re impartial reporters of the financial data, so we’re not gonna have an agenda. So I think, you know, we can define and understand what these KPIs and metrics are, and we report consistently, but maybe it’s a bad quarter for sales. So sales comes up with a new metric that they wanna track or whatever. So being able to handle that and, and deal for it. And I, and thinking about that, the way that we treat the data and the, the metrics and when you’re doing these forecasts, I think about in entertainment scenario planning has to be, I mean, you can’t, you know, black, black swan event of covid, whatever that outside of that, but heavy rainfall year that is ruining these outdoor venues or whatever. So do you do a lot of sensitivity analysis and, and scenario planning in your modeling?
Michael Stotland:
Yeah, absolutely. And you, you’re right. I mean, there’s, and I can actually even address the Black Swan events as well. I mean, when I, when I was at MarVista, I mentioned that that’s when covid started. And we more or less had to scrap our entire, our plans for the year. We didn’t, we had to figure out how we were gonna produce movies. We had to figure out what, you know, how many people we could even have on set at any given time. We had to factor in PPE in all of our production budgets. That was not a thing before. And we, you know, at the time I ran seven con concurrent forecast scenarios to understand what is the, the right mix of our slate, what can we produce during what time of the year? When do we anticipate that some of the restrictions are gonna get lifted so we can get more people on set?
What are the costs that were now gonna be additive to our budgets? And we ultimately, I mentioned we had the second best year in the company’s history, and that was largely because we were very diligent and very deliberate in how we scheduled that slate. And when we produced those films, we happened to just produce a lot of Christmas films because covid started in March. We had some time to plan this out, and Hallmark was one of our biggest partners. So we produced a bunch of Christmas movies for them. And, and it all worked for, for both of us here. You know, we are looking at that. I mean, the biggest scenario that we plan for is show cancellations. It was actually not a big thing prior to Covid. It’s a, a bigger issue now. While it’s not that prevalent, we definitely factor in seasonality into our venues.
We factor in the, the artist mix that we get year after year. One of the fun parts of this industry, and even the film industry is it’s a different business year after year. Our mix of shows, our mix of artists are always changing our, you know, we’ll have the recurring events, we’ll have, we have venues where we know we’ll put a certain amount of shows in. But that mix is always changing. And it’s a different company today than it was when I started. And even when I was at movie companies similarly, we had a different film slate every single year. And when I was at 20th Century Fox, when we had Avatar, it was a fantastic year. ’cause It blew up the entire box office, but then you didn’t have an avatar every single year. And so it definitely made things fascinating and a little bit volatile. Volatile, but it keeps things keeps you on your toes for sure. But it, it’s really that sensitivity is around that mix of slate, that mix of artists. And, and then what does that do for the year? We are, we’re also a large portfolio business. We have, as I mentioned, we have festivals, tours, venues. We have one year where the tours are softer than than another year, but the festivals do better. And so we’re, we’re managing those fluctuations across the lines of business as well to make sure we’re protecting our profits.
Glenn Hopper:
Thinking about what you were saying about the movie business, I mean, Avatar, obviously, you know, home run, it’s, it’s the Eras tour of, of, of movies, but the gambles that the studios take on just because such huge budgets and you get a, you string a couple of flops together and suddenly the whole the found, and I guess we’ve seen that and in the industry where
Michael Stotland:
Absolutely, I, I think what people, a lot of people don’t realize is in the in studios, most movies operate in the red until they hit TV distribution. And that’s when the marketing budget for a theatrical film is, is astronomical. Home entertainment as a business is, is largely tanking and has been for, for quite some time. And, but television revenues are in perpetuity. You can license a film out forever. And so that’s really where studios make their money, is in the TV distribution space. MGM is a good example of this. ’cause At the time that I did start with MGM, they didn’t have very many theatrical films anymore, but they were making money off of the James Bond library and the, and the Rocky catalog. And, and these films were already pretty aged at that point. But people, people are still licensing them. And, and you, you could probably still find them on TV now.
Glenn Hopper:
Yeah. If you’re willing to go through cable and watch 50% commercials and all Yeah. <Laugh>, right, exactly. <Laugh>. But I guess they gotta pay the, the, the broadcast stations have to pay for pay. So 50% commercials a day. <Laugh>
Michael Stotland:
Absolutely. Yeah. But, but a company like <inaudible> survive for a long time on the back of old catalogs.
Glenn Hopper:
Yep. Makes sense. And now they’re all trying to consolidate their catalogs and have their own streaming services, and now we have this fractured system again. Yeah. <laugh>. Yep. and then on the entertainment side, I was thinking when you were you know, talking about the success of certain movies versus others and, and when you’re trying to factor in for scenario analysis, I picture I’m sure there are certain artists where you have to put in some factor that artists may not show tonight. <Laugh>, you know, for cancellations and everything, <laugh>.
Michael Stotland:
Yeah. We, you know, we had this problem even last year where Kanye West was announced as a headliner at Coachella, and then suddenly he bowed out and we had to scramble and, and replace him. And that wasn’t to get someone last minute. We also had an issue with Travis Scott when Astroworld wasn’t our event, but we had him in our events subsequent to that. And we had to scramble. And, you know, we had to, had to make changes because that was such a, and admittedly that was a bit of a Black swan event in, in the industry, but we had to pivot and quickly
Glenn Hopper:
Very interesting thinking about just ’cause we all have our own in FP&A, you know, in our own industry we have our things that we have to factor in. But it’s been fascinating to hear about entertainment and, and, and film industry as well. I’m thinking about how much data you have and how much you’re using. I’m about as bullish as they come on, what AI is gonna do for us. And you know, I’ve, I’ve talked for years and used and, and seen great examples of using what I guess we’ll call traditional AI, meaning machine learning to build cooler models that have more features, and that you can do more with machine learning than you could just, you know, with a simple regression model for forecasts or whatever. And, and you said, you know, now you’re using Power BI. So this is a, a stepping stone in that direction, and certainly you can use that functionality to, to drive the models as well. Now that I’ve completely primed you for the <laugh> for the question there, but I mean, may, and maybe there are things beyond AI and machine learning, but what do you think stand where we are now, seeing how you’re transitioning to incorporating Power BI in? What do you think are the opportunities and challenges for fFP&A say, maybe in the next five or 10 years, and what would you advise people working in FP&A do right now to kind of position themselves to, to ride that wave of wherever we’re headed?
Michael Stotland:
AI is going to be the big challenge in the next five, 10 years. It’s, it’s not a, not the challenge that it exists, it’s the challenge of how do we incorporate it because what I’ve, you know, I I’ve made it to this point in my career because I’ve continued to learn, I’ve continued to adapt and I’ve continued to, to optimize my process based on the technology that I have available to me at any given time. Whether it’s something as simple as getting out of Excel into something else, or starting to leverage Power bi or it, you know, you’ve mentioned machine learning, and that is something that we’re dabbling in a little bit as well to try to look at past events, look at how ticket sales perform for those events relative, you know, artists genre theater or club and theater location. Any nu there’s large number of metrics that that go into it.
But really trying to understand how can we improve that model of projecting how our shows are gonna perform on a contribution margin basis. I certainly don’t think AI is gonna replace any of us. I think you will find yourself very much behind the curve if you don’t find ways to include that in your day-to-Day process. It’s used in the right way. It can only help us to be better at what we do and be better at, at how we present our data. One, one area that I’ve always focused on, or my career is, is to focus on limiting the amount of time it takes to process data and increasing the amount of time you’re actually analyzing it and, and speaking to it. And what you’d find in most places is there’s an inordinate amount of time being spent processing data and to leverage some of these AI tools to do that for you to basically put you in a position where you’re spending that time, understanding the business, what’s happening, and, and telling those stories.
That’s the real value add. And it’s, it’s not easy. I mean, leveraging AI is, is difficult for, you know, a number of reasons. I mean, even if you try to, I can certainly build something in-house you know, using chat GPT is a risky proposition. You don’t wanna put anything proprietary in there. So I use, I use chat GPT for, you know, helping me write syntax for things like DAX measures or things along those lines, but I certainly wouldn’t put show statistics or ticketing data or anything else like that into, into Chat GPT. So there’s definitely ways that to, to use this. And I think that it would be prudent for FP&Aprofessionals to look to leverage that in the near term. It’s not going, it’s only gonna grow.
Glenn Hopper:
Yeah. And I think, you know, the issues you have are, are the same that everyone else is. It’s you know, the data governance, security and you know, the proprietary information and then the fact that LLMs can hallucinate from time to time. You don’t want your analysts to be hallucinating when they’re reporting something back to you. We’re at that, you know, super early stage where we see the potential, but I haven’t seen anyone yet knock it outta the park. And I think we’re gonna start seeing it. AI kind of rolled into a lot of the software that we’re already using. It’s just gonna be baked in. It’s gonna be, you know, a a whole new dimension to dashboards, for example. You know, being able to interact. Yeah,
Michael Stotland:
Absolutely. There’s always some resistance to implementing a tool like that, but the pros outweigh the cons. If anyone can get their execs on board with implementing a, a, a solution like that, it’s, it’s worth the squeeze.
Glenn Hopper:
Well, you mentioned you know, that you’re, you’re new to Power BI. I’m wondering what’s top of mind for you for your career at the moment? What, I mean, is there something you’re working on trying to learn or master at this point? Well,
Michael Stotland:
So my ultimate goal as is with a lot of people on on the podcast is CFO level. That’s what I’m always working towards. It’s, I’m always building my skills around knowing. I, I don’t have a traditional accounting background. I’m very keyed in on the debits and credits. I I studied for the CPA exam. I just didn’t sit for it. I find it highly enjoyable and find it very sporting to argue with auditors. And I, it’s, it’s one of the most fun parts of my job. It’s, it’s defending and it, you know, why we’re not gonna take a an impairment on an asset or, or something to that end. It’s, it goes hand in hand with the storytelling, but right now it’s, yeah, it’s, it’s looking to optimize the way that we’re currently doing FP&A here. I, I believe that I currently have a best in class FPA department, and the, what we’re currently building and what we’re developing is only gonna improve on that.
And it’s, it’s ultimately another notch in my belt on, on that path. And that’s my big focus and part of that, that is learning Power BI. Part of that is getting involved in, in the machine learning side on our show models, you know, being involved in building out new venue proformas, you know, I have my strategy team dedicated to that finding where we can be more efficient in the way we put on our festivals. You know, I, right now I’m definitely enjoying the work that I’m doing, but my eye isn’t off the ball ultimately is, like I mentioned, is, is to move toward the CFO level
Glenn Hopper:
These days. I mean, I know it used to be you had to go CPA audit move, come up that path. We are seeing more and more FP&A and my background was FP&Aas well. FPA positions move into that CFO role, but I think the CFO role has evolved from what it was too. And now it just, it kind of goes hand in hand with the data. So being able to understand, use this data and having a proven track record there, and then kind of having this strategic element that is here’s the data-driven decision making. I mean, it does, it, it, it makes sense for a, a very good path to the seat.
Michael Stotland:
Absolutely. And you know, the CFO role wasn’t that long ago that the role was largely, you know, keep, keep us all out of prison. Yeah. And and now it is truly a strategic role and there’s a seat in the room to talk about what we’re doing and why we’re doing it, and whether it makes financial sense to do it and, and all of these things that no question that someone with an accounting background could, could do the job. But I agree, the strategic nature of FP&A lends well to the modern CFO
Glenn Hopper:
We’re to the point of the show. It’s the the getting to know you section, which I found a lot of finance folks really they’d much rather just talk numbers than this, but I’m gonna put you in the hot seat. Tell us something. I now, I, I heard that you are a D1 cross country and track runner, so that’s something I I probably not a lot of people know. Tell us something else that maybe that we wouldn’t know about you that we couldn’t find online.
Michael Stotland:
So I, I kind, I mentioned I was a little bit obsessed with, with those metrics, you know, during the, the Garmin watch Renaissance, and I, I continued that on the side. Even as I started my FP&Acareer, I, I became a triathlete for many years. I completed a couple of Ironmans about a five half Ironmans. I eventually became a triathlon coach. I coached the Fox Triathlon team when I was at the company, and then later I joined a team called Tri Train Endurance. And I coached them for a few years. Then I had kids and all that fell apart, but yeah, <laugh>
Michael Stotland:
But, you know, I was I was very competitive in the sport. I have a, a few podiums in my, on my belt and at one point competed in the age group nationals in 2015. I got obliterated, but it was it was just a fun experience just qualifying and being there and competing with some of the best amateur triathletes in the, in the country. And it’s something I, while I no longer these days, I picked up a golf club and, and put, put away my bike. But, you know, it, it allowed me to expand on those metrics. ’cause Now I wasn’t just looking at my running metrics, I was looking at my swim times and my splits. I was looking at my, my bike metrics. I was looking at nutrition. I was able to continue nerding out on, on all of this. And then with coaching, being able to share that with other people as well.
Glenn Hopper:
Yeah. Especially for an endurance event, like a, an Ironman where you have to balance all of it to obviously the training and all that. But even during the event where, you know, okay you know, and I don’t know what level of detail you have, but you’re VO2 and, and whatever that you’re looking at in training. And it’s like, well, what, how is my run gonna be after the bike and the transition and knowing, you know, what your nutrition strategies and all there. I could see that being Absolutely. And it ties perfectly to FP&A too. It’s <laugh>.
Michael Stotland:
Yep. It was a, you know, it’s something I did without realizing why I loved it. And just looking at hindsight, I’m like, oh, that actually makes a lot of sense. Metrics and, and stats and, and like, this is the world that I live in and I use these tools to understand the world more or less understand my world. That my transition to to being a golfer has been kind of the same. It’s understanding, you know, what club my distances and and amount of power to put behind a swing relative to the distance I’m trying to achieve, or the kind of ball flight I wanna achieve. It. It’s all, it’s all interconnected.
Glenn Hopper:
Yeah. And it’s all like the levers in FP&A. It’s just like, what do I need to do to tweak this, this way or that. Yeah. Love it. Love it. So I’m actually gonna throw in an extra question in the getting to know you thing. And I know your FP&Aand you’re not on the on the front lines, but do you ever get to, to meet the artists? Do you have a, like a, a favorite gig or, or, or tour that you’ve been a part of?
Michael Stotland:
You’re right. I mean, it’s not, not often, but we definitely, you know, on occasion do get to meet and greet with the artists. My favorite story that I like to tell as far as my favorite gig and tour, it was my first show I attended after starting with the company. I started in 2021 and it was right as we were coming back online post covid. And I went to go see the Rolling Stones at SoFi Stadium, and I walked into the stadium right just as they were announcing the Stones, I missed the opener. And the, I’ll never forget the roar of the crowd when they announced the Stones. And, and Mick Jagger came on and, and Keith Richards started playing. And it was an, an incredible energy in that stadium. And this was also the first time in in my life that I found myself looking at the, at the audience more than I was looking at the band. I, it, it dawned on me that this is why we do this, this, you know, it’s, it’s really for the fans, it’s for the artists. And, and we kind of just exist to facilitate those experiences and create those memories. That show will probably be my favorite for a long time. For that reason, I think it was, it was that sort of eye-opening moment for me of like, I get it now. This is what we’re doing.
Glenn Hopper:
Yeah. If you had the full customer experience and you got to see that you got instant feedback from <laugh> from all the other customers, that’s great. Yeah. alright, well this is actually, I’m gonna, I’m gonna mix this one up too. So our normal last question is always what is your favorite Excel function? But since you’re messing around in a Power bi, you can still answer the Excel question or if you’ve found some cool new thing in Power BI that you’re really liking. So, so
Michael Stotland:
Can answer both. I, as far as Excel goes, my favorite function is, and I know a lot of people say VLook up, but for me it’s actually SUMIF or SUMIFs. I, I know that a lot of what the sum if and some ifs function does, can just be utilized with Pivot tables. But my data is, tends to be very robust, but a lot of duplication of the metadata. And so for me to aggregate those and, and sum up by a category or by some, some field, I use some ifs religiously. And and I found it to be powerful. I also, you know, VLOOKUPs, I, in data sets, like mine tend to be dangerous ’cause it’ll only take the first value. It finds it, it ignores subsequent values. I go with SUMIFs and even with V lookups, I use Index match more often than I, I use V lookup. For Power bi.
One thing I’m, I’m really proud of that I, I developed recently, so I’m getting data fed into my Power BI model from our EPM tool and we do a lot of versioning of our forecast, of our budgets and I was able to develop a DAX measure where I could I, I could have two different slicers on a page that control two different measures within the same visual. And that took me weeks to develop and figure out how to do it. I certainly had a little bit of help from my, my strategy folks to and, and chat GPT to help me with some syntax. You know, it’s, I even went on the, the Power bi community boards and, and they weren’t able to figure out quite what I was looking to do. But once I got it done, I was quite proud of it. I was, it was that moment that I was able to share my dashboard with the CFO. ’cause That’s what he was looking for, is to say, you know, I wanna use this report, or I wanna have this dashboard and be able to have multiple versions within one visual. That’s the Power bi aspect of it.
Glenn Hopper:
Okay. I love <laugh>. I love that you mentioned slicers because just this morning we’ve got a, a Power BI instance, and we’ve got in the backlog, there’s two projects that are some fairly complicated slicers and they stay in the backlog. They never seem to come up into a sprint. And this morning I was, I sat on the slicers, is anybody gonna pull the <laugh>, pull those forward. So, yeah, so great accomplishment and, and, and great use of it. And it does, it’s great to give that sort of drag and drop cool way to, to show data. So That’s great. That’s great. Okay, last question. I guess if anyone wants to follow you or, or get in touch with you, how can, how can our listeners connect connect with you and learn more about your work?
Michael Stotland:
Yeah, link LinkedIn is the best. I’m you know, anybody wants to send me a message, I’m, I’d be happy to respond. And there’s, there’s only a couple of Mike Stotlandsaround, but I’m the one from Los Angeles at, at AEG.
Glenn Hopper:
Well, Mike, I really appreciate your time. This has been fascinating conversation.
Michael Stotland:
Likewise.