Digital Domain May Go Bankrupt

CEO Quits

Last month we reported that the special effects company responsible for the Ender’s Game movie, Digital Domain, dropped $15 million on Ender’s Game. The Wall Street Journal reported on Digital Domain’s losses at the time, “The decrease in the gross margin percentage of revenues in the first quarter of this year, as compared to the same period of the prior year, was primarily impacted by the inclusion of co-production revenues of $2.2 million from our work on Ender’s Game at 100 percent of the direct cost of revenues because we are investing the gross margin on our work as part of our equity in the film.”

Today the San Francisco Chronicle reports that Digital Domain’s CEO, John Textor, resigned and will be replaced by Ed Ulbrich, a longtime executive in wake of company restructuring which may lead to bankruptcy. In an effort to reduce spending, Digital Domain said in a statement that they had eliminated almost all staff in Port St. Lucie, Florida, where it’s based, but  that studios in California and Vancouver will continue to operate.

Digital Domain will continue to work on Ender’s Game. The Ender’s Game movie will hit theaters November 1, 2013.

Edit: Via Bloomberg

Post-production work on “Ender’s Game” remains on schedule, Peter Wilkes, a spokesman for Lions Gate, said in an interview. “We’re very excited about ‘Ender’s Game’ and we’re very confident we will release it as planned on Nov. 1, 2013.”

  • http://twitter.com/Darian_Robbins Darian Robbins

    Damn…does this mean we have to wait longer for the trailer? Summit, DD, Lionsgate, and company. Y’all need to drop a website where people can buy some movie gear. Start recouping this cost now…stop waiting.

    • http://www.facebook.com/profile.php?id=624546088 Stephen Sywak

      Darian,

      I think we may have to wait longer for the MOVIE. I think we may have descended back into “Development Hell.”

      • http://twitter.com/Darian_Robbins Darian Robbins

        How can we help? Probably do a Kickstarter program where we ask fan’s to invest in the Movie. But I agree with you we will probably be waiting a little longer on the movie at least until DD straightens out it’s financial situation.

        • http://www.facebook.com/profile.php?id=624546088 Stephen Sywak

          The money one might get together with a Kickstarter campaign would pay for less than a week of CG work–if that. WHen Neil Gaiman’s wide (Amanda Palmer) gathered up $1MM from Kickstarter, she started out with a MUCH larger fan-base than anything we have ever seen here, or on P-Web, or on EnderNews, or combined,

          • http://twitter.com/Darian_Robbins Darian Robbins

            I hear you Steve. We would of needed at least 15 Mil to buy the production part of DD

          • http://www.facebook.com/profile.php?id=624546088 Stephen Sywak

            I’ll let you know should I win the lottery before the 21st….

      • http://twitter.com/Darian_Robbins Darian Robbins

        What will also help is releasing a trailer for “Ender’s Game.” At this time anything will do.

  • http://twitter.com/Darian_Robbins Darian Robbins

    Ok. After reading something online (because the Internet never lies) I’m starting to believe that Ender’s Game is going to be finished by another VFX house. I think the term “may” go bankrupt should be changed to “definitely” going bankrupt. Their numbers are not looking good as a company as a whole. Closing down one studio in FL is only the start. Their stock price is under a dollar, and they have burnt through A LOT of cash. Right now it seems that Ender’s Game is there most lucrative prospect and that’s not going to yield them any kind of financial return until 2013 at least, provided it’s a blockbuster. W’ell know either way by the end of this coming week, what happens to Digital Domain and Ender’s Game.

    • http://twitter.com/Darian_Robbins Darian Robbins

      Yup. Bankruptcy. But a private Investor Searchlight Capital already scooped up the production part of DD for a cool 15million. So is it back to “hell” or will they keep it moving. Time will tell….

      • http://www.facebook.com/profile.php?id=624546088 Stephen Sywak

        Link:
        http://www.variety.com/article/VR1118059067

        “Both the sale and the financing must be approved by the bankruptcy court. The sale will be part of a public auction and the company will ultimately sell to the highest bidder. The financing would allow Digital Domain Prods. and Mothership Studios in California and Vancouver to continue to operate **and honor client contracts.**”

      • http://www.facebook.com/profile.php?id=624546088 Stephen Sywak

        Reuters news:
        http://www.reuters.com/article/2012/09/11/digitaldomain-bankruptcy-idUSL3E8KB4HZ20120911

        “Digital Domain said it had agreed to sell its production business to private equity fund Searchlight Capital Partners for $15 million. The sale to Searchlight, which manages more than $860 million, is subject to potential other bids through a one-day auction on Sept. 21, as required by the bankruptcy code.

        The bankruptcy is a black eye for Florida state and local officials who committed $135 million to subsidize the construction of a state-of-the-art studio in Port St. Lucie, which the company closed last week.”

  • http://www.facebook.com/profile.php?id=624546088 Stephen Sywak

    They’re not just closing down ONE studio in Florida. Isn’t that where their headquarters is located?

    If anyone at DD is listening–you have a couple of very talented and enthusiastic people who are willing to do what we can.

    If any of our circuits or gears can help….

  • http://www.facebook.com/profile.php?id=624546088 Stephen Sywak

    Digital Domain claims that it will “look like one of the biggest films you’ve ever seen”

    What does that MEAN, though? it won’t BE one of the biggest films, but it will only LOOK like one??? What is a film except for what it “looks like”?

    Will it LOOK like Star Wars, or Titanic, but sound like Ishtar?