The bank, which first invested in Exactuals in 2013, announced the deal on Monday. It said Exactuals’ PaymentHub system allows studios, unions, guilds, payroll companies, music publishers, record labels, distributors, and marketplaces to provide direct deposit payments, tax document management and online reporting to rights holders, performers, managers, service providers and independent contractors across the globe.
“In many cases, this automated system has replaced an outdated payment process, reducing or eliminating the need for costly paper checks and reporting,” the bank added. “Exactuals’ system provides payments and reporting functions with greater security, accuracy, transparency and speed. Firms can process global payments through operating accounts at City National.”
SAG-AFTRA announced last year that it would offer members delivery of residual payments through direct deposit for the first time, replacing paper residuals checks. The performers union, which has about 160,000 members, announced it had entered into a multiyear agreement with Exactuals to deliver residuals payments through direct deposit. SAG-AFTRA said Exactuals would serve as a third-party broker to facilitate transmission of data and funds between the studios and payroll houses to SAG-AFTRA and its members.
SAG-AFTRA never made followup announcement as to whether the direct deposit would be available and there’s no information on the union’s web site about direct deposit of residuals. Reps for SAG-AFTRA did not respond immediately to a request for information about its agreement with Exactuals.
City National said Monday that it had participated in a $10 million round of funding for Exactuals prior to the agreement with SAG-AFTRA and that Exactuals “is working” with them to offer direct deposit of residual payments to its 160,000 members.
“SAG-AFTRA began a slow, steady, and successful rollout of Direct Deposit with Exactuals earlier this year,” said Mike Hurst, CEO of Exactuals, in response to an inquiry from Variety. “We will keep the industry up to speed as the rollout extends to all SAG-AFTRA members in the months to come.”
Hurst will remain CEO of Exactuals. He and the firm’s other executives are being retained with multi-year contracts. City National said Monday that the payments firm will continue to modernize the residuals and royalty payment process for the entertainment industry, and over time, it plans to expand to serve other businesses as a wholly owned subsidiary of City National Bank.
“Exactuals has developed a groundbreaking and unique payments and reporting platform that enhances security and reliability,” said City National Bank chairman and CEO Russell Goldsmith. “City National has been a minority investor in Exactuals for several years, and the two companies have formed a strong partnership. Mike and his team are highly skilled, and we’re very pleased that they will be joining City National.”
He added, “This acquisition builds on City National’s history of serving the entertainment industry, and it is the latest example of our commitment to provide clients with premier service and state-of-the-art payments systems. We look forward to helping Exactuals as the firm continues to grow.”
City National said it anticipates additional revenue from Exactuals’ payment processing and also expects to increase deposits and enhance the services it can offer to the bank’s entertainment clients.
“We are excited to bring our leading technology together with the most trusted bank in entertainment,” Hurst said. “This acquisition builds upon a five-year investment relationship between our two companies. Since 2013, Exactuals and City National have worked together to build revolutionary tools and services for our shared customer base in the entertainment space, and this acquisition will accelerate our mission to transform and modernize the industry for the better.”
Exactuals was founded at the Stanford Graduate School of Business in 2011 with the goal of modernizing the entertainment payments space. The firm has 40 employees.