Assignment – Semester 2, 2018
Assignment – Semester 2, 2018
ACCT5022 CPA Accounting Capstone Page 1
Brown Bag
In the mid-1990s Cathal Gaffney and Da
agh O'Connell knew nothing about running
a business. In fact, they didn't want to know anything about running a business. They
had never outgrown a childhood fascination with comics and graphic novels and
considered themselves artists working (infrequently) on the small Dublin animation
circuit. By 2003, they were running Brown Bag Films, an award-winning, Oscar-
nominated Irish animation powerhouse with a large and growing number of Irish and
international clients for whom they produce television series, feature films,
commercials and digital media. Brown Bag Films was typical of many Irish 'Celtic
Tiger' era start-up success stories. It was lean, innovative and heavily reliant on
highly skilled staff using state-of-the-art technology. It was also at a juncture where
strategic decisions about the future of the company had to be addressed.
Animation in Ireland
The story of the animation industry in Ireland over the last twenty years is one of
oom-to-bust-to new-beginnings. In 1992 Business and Finance Magazine reported
that the Industrial Development Authority (IDA) 'reckoned that Ireland could become
a major world animation centre. [Ireland was] ... to become the cartoon capital of
Europe. Today the dream is over.’ Ten years later, two Irish films received
nominations for the 2002 Academy Awards, both were short animated films
produced by small, young, Irish companies.
The 1970s saw a 'baby-boom' in Ireland; as birth rates reached, and surpassed,
previous highs of the early 1950s, infant mortality rates dropped significantly. This
new, young population was served by the first official state
oadcasting agency,
RTE, which had been established in the early 1960s. However, most of the animated
content of children's television programming and on television advertising was
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produced by American companies (principally Disney) and home-produced
animation was almost non-existent.
As the global recession worsened in the early 1980s, the IDA ('a state agency whose
prime focus was to get industries with the highest job content for Ireland') changed
strategy. Their ten-year strategic plan directed that the agency:
... should focus on attracting industries that could achieve high
output growth using the best technology available, while
maximising their spending on Irish services and materials. In this
way, the IDA would maximise the gains for the economy, both
through jobs within the company and via the related service
employment that would be created in consequence. Our
judgement was that the most technologically advanced firms
would be the most successful in the market place. We believed the
jobs would follow that success. This marked a reversal of the ID
A's traditional approach of attracting the most labour intensive
industries, since labour was in abundant supply in Ireland.
In the mid-1980s the IDA sought to attract large animation companies to Ireland and
met with good initial levels of success, attracting three large American companies to
set-up in Dublin: Sullivan Bluth (later Don Bluth Entertainment), Murakami Wolf
Swenson (later Fred Wolf Films) and Emerald City. When it emerged that Bluth
initially employed American and European animators in most of the skilled positions
in the company and Irish animators were employed in- functional positions, Bluth and
the IDA looked seriously at the provision of serious training opportunities for Irish
animators. The result was a two-year animation course in Ballyfermot College of
Further Education (BCFE), followed shortly afterwards by a course in Dun Laoighaire
Institute of Art, Design and Technology.
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These three companies employed 530 staff by 1990. Three years later Emerald City
had gone into liquidation, Don Bluth Entertainment closed and Fred Wolf Films laid
off two thirds of its workforce; it too would later close its Irish operation. The biggest
low to the sector was the closing of the Bluth operation which resulted in 380 (over
70 per cent of the 'big three' animation companies) jobs being lost. By 1998
employment in the Irish animation sector had shrunk to 70 fulltime and 30
contract/freelance employees.
At the time many reasons were given for the retreat and collapse of the US
companies. The period of economic fallout in the aftermath of the first Gulf War and
competitive pressures within the international animation industry contributed to a
situation where locating in Ireland was no longer a viable option for companies in the
sector. North America was the spiritual home of commercial animation and Dublin in
the early 1990s offered little tangible ·strategic benefit in locating a production facility
in Dublin.
Ironically, the attraction of large American companies, and their subsequent
withdrawal had sown the seeds of a healthy indigenous industry. When the foreign
investment bu
le burst, a community of young, talented film-makers remained
ehind. They were skilled creatives who had worked on large commercial
productions for the big three animation houses. They had energy, experience and a
drive to succeed on their own terms, but little money or business experience.
Beginning Brown Bag
Cathal Gaffney had an idea: the idea was a short animated film which would
lampoon a classic of Irish language literature, Peig, an autobiographical account of
island life at the start of the 20th century. Peig, was a staple of school cu
icula and
was widely disliked by students forced to read the text.
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Da
agh O'Connell was from Leixlip, a satellite town of Dublin in County Kildare
which had mushroomed as a result of large-scale migration from rural areas in the
late 1960s. His original interest in the field was encouraged by the emergence of a
new wave of science fiction comics such as 2000 AD which began to be widely
distributed in Ireland in the late 1970s. He began writing and drawing his own
graphic sci-fi novels with distribution limited to a close group of friends.
Gaffney's original interest was in the more sedate area of fine arts. He also grew up
in an area which experienced population growth in the late 1960s; the Navan Road
area of Dublin. They had both attended secondary school at a time when
unemployment was a pressing reality for everyone in Ireland, the concept of return-
emigration was inconceivable, and the value of employment was universally
appreciated. Employment for visual artists is never assured, and the opportunity to
train and work in a field they enjoyed was welcomed by both of them after they left
school.
Following stints at Bluth and BCFE, O'Connell and Gaffney met while unemployed
and developed Gaffney's idea for the best part of a year. Eventually, they pitched the
idea to the newly formed Independent Productions Unit (IPU) at RTE.
RTE had created the IPU in response to the Broadcasting Authority (Amendment)
Act 1993. It aimed 'to enhance the service to viewers by expanding the range and
diversity of Irish-made programmes on our screens and to foster new sources of
creativity and energy within the independent television production sector.'
At the time the IPU were not interested in the idea of a short film, and instead
commissioned a series of 7 x 3.5 minute short animated pieces based on the
proposed concept. At this time, the partners were interested in
inging the Peig
project to fruition and were not interested in developing a business. Animator friends
were
ought on board to assist in the production (a mixture of hand-drawn cell-
animation and stop-motion models). The work was expensive, labour intensive and
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time-consuming. Although listed on the IPU's web-archive as a 'Young Peoples'
television programme, the content was directed towards an Irish adult late-night TV
market.
When aired on RTE, the Peig series achieved critical acclaim (the Irish Times
eviewing it as 'one of the best and funniest Irish productions in ages'). One of the
more tangible benefits of the experience for the directors was the establishment of
working roles: Gaffney as producer and O'Connell as director.
Having completed their project, they discussed dividing their remaining assets.
Gaffney soon secured a contract from a UK-based company to develop another
project, once again asked O'Connell to come on board, and Brown Bag Films were
officially established in 1994. Existing assets were invested in procuring expensive
state-of-the art animation technology and training.
Growing the enterprise
At this initial stage the directors of Brown Bag were still very 'art-oriented' as
opposed to having a business drive. Much of this was due to the fact that they were
following their primary interest and expertise. Gaffney and O'Connell realised to
continue to work in the field that they would have to grow their understanding of
usiness. Following their initial small-scale success, capital was almost non-existent
and no offers for work were forthcoming. The need to effectively market their
services became paramount as business was quiet, perhaps as a result of a loss of
faith in the Irish animation sector. Some business training was undertaken and a
show-reel was developed and pitched at festivals and trade-fairs.
With little work available in the television sector, Brown Bag pursued other markets
and contracted animation work with CD-ROM production companies. In the mid-90s
this field had a high-book worth to the company and helped alleviate many of their
early financial difficulties. They also began to work on television commercials for
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advertising agencies which proved to be a highly lucrative field (see Appendix 1 for a
list of key company milestones). Their client list included Aer Lingus, SmithKline
Beecham, 11850, the Department of the Environment and Local Government, RTE,
TG4 and Saudi Arabian State television.
A major departure for the company in the late 1990s was securing the contract to
coordinate the animation work for a major Warner Brothers production, The King & I,
which involved utilising ground
eaking virtual animation studio technology and
esulted in a significant boost to the company's profile.
Over the following years Brown Bag worked for and with a variety of production
companies, mainly outside Ireland. A production/promotion momentum had begun
for the company and the