Hollywood's Bank Eyes a Big Role on Broadway
(Corrects in the fifth paragraph the timeframe when money was loaned to Kenneth Starr)
Al Pacino's success in his latest Broadway role is also a coup for Russell Goldsmith, a banker whose main offices are more than 3,000 miles away. Goldsmith is the chief executive officer of City National (CYN), a bank based in Los Angeles whose logo adorns the checks paid to actors and employees in the current production of The Merchant of Venice, which stars Pacino as Shylock. The show is another in a long list of Broadway clients for Goldsmith, who opened a second office in New York in December in an effort to capture more of the city's entertainment business. "We see a lot of opportunity in Manhattan," Goldsmith says.
To support his expansion in New York, Goldsmith is relying on contacts built up from years in the entertainment industry and a family banking history with Hollywood that goes back almost half a century. Founded in Beverly Hills in 1954, City National, often called the Bank to the Stars, counted Frank Sinatra and Marilyn Monroe among its clients. It now has $21.8 billion in assets, making it the 26th-largest commercial bank in the country.
On Broadway, City National's first client was the musical Monty Python's Spamalot, which opened in 2005. Since then the customer list has grown to include 10 of the 33 Broadway shows now running, Goldsmith says, including Mamma Mia! and The Addams Family. The bank doesn't offer financing for shows, a highly speculative business. Instead, it provides treasury and checking accounts for productions, along with mortgages and wealth management services to producers, performers, entrepreneurs, and attorneys. The entertainment business accounts for about 20 percent of the bank's revenue, Goldsmith says.
Goldsmith, 60, began his career as an attorney after graduating from Harvard Law School in 1975. He went on to become the chief operating officer of entertainment company Lorimar, and then the CEO of Republic Pictures, an independent production and distribution company. He sold Republic to Spelling Entertainment Group for about $100 million in 1994. The next year, Goldsmith became CEO of City National, succeeding his father, Bram, who had held the post since 1975. Bram is now chairman.
The bank has not had a quarterly loss since 1993. In the three months ended Sept. 30, it posted a profit of $35.1 million on revenue of $254.5 million. There have been some missteps. In 2007, the bank lent $2.6 million to Kenneth I. Starr, the investment adviser to the rich and famous. In 2010, Starr was indicted for cheating 11 clients, including Jim Wiatt, the former head of the William Morris Agency, and actress Uma Thurman, out of $59 million. Starr pleaded guilty to fraud in September. City National sued Starr and won a default judgment in the same month.
Goldsmith sets the bank apart from most rivals by offering a more intimate customer experience, says Bob Boyett, one of the producers of Spamalot. City National came through for him on an earlier project when he needed advice and his business manager was unavailable. Boyett called the bank, identified himself as an entertainment client, and was told he could speak with anyone in the division. "What I learned that day is you can call the entertainment division at any time and every single employee knew who you were, was extremely helpful, and could get anything done when you needed," Boyett says. "The big banks can't do that; they just have too many people."
Bill Haber, a co-founder of Creative Artists Agency and producer of more than 40 shows, including Spamalot, says bankers must be "immediately accessible" to meet the needs of Broadway at all hours of the day. City National has delivered cash by courier and gone out of its way to fix problems, says Haber, who has known Goldsmith for 30 years. "It's a family business, and Russell is the head of the family," he says. "Even though he's the CEO, he touches everything, so you always feel like he's involved. That's the secret."
The bottom line: Under Goldsmith, Hollywood's "Bank to the Stars" has opened a second New York office to expand work with Broadway productions.