William Earon’s behind-the-scenes role
william earon is one of those behind-the-scenes guys who makes the movie business run in Massachusetts.
His company, Coastal Capital Advisors LLC, invests in some movie projects, loans money to others, and helps nearly every filmmaker who comes to Massachusetts turn their film tax credits into cash. He says confidentiality agreements prevent him from discussing the production companies he works with or his investment partners, but he acknowledges he does more tax credit business than anyone else in the state.
Earon, who spent 25 years working for the accounting firm Ernst & Young, heading its New England financial services tax practice, says he stumbled into the movie business somewhat by accident. As former Gov. Mitt Romney’s administration began considering offering tax credits to lure filmmakers to Massachusetts, some of those involved in the discussions consulted him about the tax implications. One thing led to another and pretty soon he was hip deep in the minutiae of the film tax credit law that took effect in early 2006. He realized early on that a market needed to be developed for the sale of the tax credits.
Earon buys the tax credits from the movie productions at a discount off their face value and allocates them to his financial partners, who use them to lower their Massachusetts tax liability. The state Department of Revenue estimates tax credit brokers have pulled in about $7 million in profits over the last four years, although Earon says the DOR number is actually an estimate of gross profit and not net income.
Earon says he flies back and forth between California and his Cohasset home advising production companies on the ins and outs of the Massachusetts film tax credit. He says the state’s tax credit doesn’t provide the highest rate in the country, but it’s competitive with the tax credits offered by the top states, including Louisiana, Georgia, Pennsylvania, Connecticut, Florida, and Michigan. He says the efficient way tax credits can be converted into cash in Massachusetts gives the state an edge.The 56-year-old Earon says one of his goals is to help make Massachusetts the third-largest movie production site in the country behind California and New York. What the state needs, he says, is permanent infrastructure, including sound stages. He thinks they will get built as long as the state continues to promote the tax credit.
Over the years, Earon says his company has expanded from tax credits into providing financing for films and investing in them directly. He says he tells his investors that only about two of every 20 films made for theatrical release ever turn a profit. “It’s a very risky business,” he says, “but there’s a lot of upside.”