Visual effects company Digital Domain Media Group which was co-founded by renowned Hollywood director James Cameron has entered into Chapter 11 of bankruptcy protection.
Digital Doman has worked on the visual effects of nearly 100 Hollywood films, many of those being successful box office hits like Titanic and the Transformers Trilogy. They also gained a great deal of positive exposure for creating the hologram of deceased rapper 2pac Shakur which delighted fans at the Coachella festival in April. Ironically, it is 16 years to the day that the infamous rapper 2pac was shot and killed, on September 13th in 1996.
Experts are blaming a combination of cheaper technology, globalization and tax incentives abroad for negatively affecting the profit margin in the American visual effects industry. Digital Domain are the latest in a long line of similar firms to face bankruptcy and closure.
These days visual effects can consume a major chunk of modern film budgets often taking up more than 40%, the standardization of tools like Adobe After Effects and Nuke has made it possible for smaller businesses and firms from overseas to stake their claim in the market.
In its heyday Digital Domain was valued at a staggering $400 million, now however, private equity firm Searchlight Capital is offering a measly $15 million for the majority of the company’s assets.
According to the Wall Street Journal CEO Ed Ulbrich is keen to push for a quick sale, as he believes that any delay could put the jobs that Digital Domain have in pipeline at risk. However, this also means that any potential bidders in the mandatory one-day auction required for Chapter 11 of bankruptcy protection will not have long to put together their offers. A one day auction has been scheduled for September 21st however, that date could still be changed.
(Via The Verge)