Small Business Profile: The Entertainers
A new line of adult action figures is the latest creation for SOTA Corp., a firm
that specializes in children’s toys and collectibles as well as special effects
By CHRISTOPHER KEOUGH
Staff Reporter
Life and business are a game for Jerry Macaluso.
He’s always looking for the next business pursuit and once he finds it he makes sure he’s competitive.
Take the time he tired of his safe investments in mutual funds. He took $5,000 and started actively playing the stock market. “I read everything I could and taught myself to day trade,” he said. “It’s how I bought my house a year later.”
It’s a second mortgage on that house that’s supporting Macaluso’s latest play, Plastic Fantasy Inc., which licenses and manufactures adult action figures modeled on women in the adult entertainment industry. Macaluso’s other business is Van Nuys-based SOTA Corp. (SOTA stands for State of the Art), which operates SOTA FX and SOTA Digital, special effects houses.
There’s also a division called SOTA Toys and Collectibles, which develops and licenses non-adult action figures. Its first licensed products will be six busts of “Planet of the Apes” characters from 20th Century Fox.
SOTA’s revenues dropped in 2001 as the toys division trimmed staff and cut back on its prototype work to concentrate on licenses and developing its own properties.
Meanwhile, Plastic Fantasy, which Macaluso launched last year with money from his second mortgage plus credit cards, has licenses to distribute action figures for 25 adult film actresses, including star Jenna Jameson.
The first product, a six-inch Jameson doll, sold 10,000 units since its January release. “When he first approached me I didn’t take it seriously,” said Jameson. “I didn’t understand the idea, but Jerry talked me through the whole thing.”
‘Miami Vice’
Taking chances is how Macaluso got his business going. In 1985, when he was 18, Macaluso started SOTA FX in Miami, where he had been doing special effects and makeup on the set of “Miami Vice.” He was a year ahead in school, having skipped seventh grade, and worked out an arrangement to spend half the day on the set.
He kept sending samples to a top Hollywood special effects man, Rick Baker, who liked what he saw and recommended Macaluso for a small project in Miami called “Scared Stiff” which then led to “The Unholy.”
In 1988, Macaluso moved to Los Angeles and spent two years begging directors and producers to let him read their scripts and prepare mockup special effects budgets. Finally, he thought he hit the jackpot.
Macaluso and partner Roy Knyrim, who he met after arriving in L.A., got a phone number for director Sam Raimi, who was working on “Army of Darkness,” the third film in his “Evil Dead” horror series. They read the script and pitched an effects budget.
They didn’t get the job, but Raimi recommended the pair to Ernest D. Farino, director of “Steel and Lace.” Macaluso and Knyrim rented a 7,000-square-foot garage, hired some help and made $20,000 for four months of work on the sci-fi thriller.
On the heels of that, they worked on “Ed Wood” with Tim Burton (released in 1994) and made costumes for a human-toy family called the Puttermans in a Duracell commercial, among others.
In 1997, they launched SOTA Digital on the $90,000 made doing effects on “Modern Vampires. Since then, SOTA Digital has worked on “Planet of the Apes,” “The One,” “Swordfish” and “Collateral Damage.”
“Modern Vampies” director Rick Elfman said Macaluso and Knyrim have a playful approach to their work, although “they are very hard-working, enterprising, entrepreneurial-minded guys. That’s the left brain-right brain of those guys.”
Spare time for toys
Macaluso said that when work got slow, he became interested in yet another pursuit: taking rubber-like material and then sculpting it into a toy. “It just looked like fun and I wanted something to keep me busy,” he said, adding that a friend would take on more work than he could handle and pass on the extra to Macaluso.
One day he got a call from ReSaurus Co. Inc., the Ohio-based toy company with the license for “Lost World: Jurassic Park.” SOTA Toys and Collectibles was on its way. “In the first year, which was just me goofing off, we made almost half a million (dollars),” Macaluso said. “There’s not a lot of cost in making toys, so the profit margin’s pretty high.”
So now there’s also Plastic Fantasy. The success of the dolls that he sells for $14.99 (Plastic Fantasy makes $7 per figure) gave Macaluso the confidence to put down another $300,000 up front to launch the next six dolls, which will be released at the end of the year.
Macaluso, who said the goal is to make collectible merchandise “in the classiest way possible,” doesn’t consider himself a part of the adult entertainment industry.
“I didn’t want to make a quick buck off it because we have a reputation,” he said. “We have to put the money and time into it like it was ‘Planet of the Apes.'”
PROFILE: SOTA Corp.
Year Founded: 1993
Core Business: Special effects and collectible action figures
Revenues in 1999: $975,000
Revenues in 2001: $750,000
Employees in 1999: 20
Employees in 2001: 13
Goal: To be a one-stop house for development of entertainment content and merchandise.
Driving Force: To be as successful as possible in enjoyable pursuits.
