Maxsar VFX Artists Left Unpaid In Subsidy Debacle

If you read my blog you know I tend to repeat this saying:

You live by the subsidy, you die by the subsidy

That theme seems to have played itself out in Michigan as former VFX artist and Variety writer Karen Idelson broke a big story over the weekend concerning unpaid VFX artists at Maxsar Studios:

The Michigan experience stands as a cautionary tale for anyone involved in incentives. States need to be aware that not every film company will be able to deliver on all its expectations. And film companies, their employees and local businesses need to be aware that politics is a volatile area, and a shift in administrations can mean a drastic shift for everyone involved.

Steve Hulett has his post on the issue at The Animation Guild Blog.

US Studios can basically bill the government of Michigan 42% of their production costs of work done in the state. For the VFX industry the real reason producers move jobs to various regions is so they can be awarded subisidy money or what others call Welfare for Hollywood.

My problem is facilities market subsidized regions as the answer to the VFX industry’s volatility. Back 2007 I remember colleagues at Sony Imageworks being pitched it’s new Albuquerque facility as a more stable and affordable environment. Fast forward today and you’ll find that the subsidy is capped and the focus by Imageworks and other facilities on Vancouver and it’s more aggressive subsidy.

Of course in order for this to work, you need VFX artists willing to move. As hot as things are in Vancouver, it’s been very difficult for studios to find workers to move there. If what I’m hearing is correct, one very large Vancouver facility may lose a huge show because of the inability to find workers.

Variety’s David Cohen tweeted what sums up the situation best:

Problems at Maxsar Digital & Kerner Optical point up a #vfx management practice that must stop: using new deals to pay past obligations.

The common #vfx practice of using new deals to pay old bills is why some refer to the entire vfx business as a Ponzi scheme.

Remember that tweet. Tattoo it to your arm if you can because if you think these Ponzi-like schemes are limited to just small facilities, wait until you get a load of what some of the bigger facilities are trying to do to get subsidy money.

Soldier On.

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18 Responses to Maxsar VFX Artists Left Unpaid In Subsidy Debacle

  1. rfk says:

    Of course, with subsidies you often have no choice but to pay old debts with new deals: you don’t get the subsidy money until long after the job is completed. Unless you’re sitting on cash or a healthy credit line, you will have to pay people with money you don’t have yet.

    Hands up for everyone sitting on cash or a healthy credit line.

  2. fizz says:

    It’s all very well blaming this on subsidies, but the bottom line is in this bit:

    “The new Maxsar artists didn’t know Martinez, but they soon learned that the French-born exec had served jail time in France after investors complained to authorities about his former company, Ulysse, which had been forced into receivership in Los Angeles.”

    In other words the guy was as bent as a docker’s hook and screwed his investors and employees regardless of whether subsidies were available or not.

    The primary problem would appear to be criminal behaviour which in this case took advantage of subsidy money.

  3. Maple Leaf Eh! says:

    The point of the story is unpaid VFX artists. I’m assuming On-set crew members had been paid in full for the time on this project. This article on Variety should have been focused on why vfx artists need to unionize.

  4. kit says:

    Hey VFX Soldier,
    Have Lee Stranahan got back to you on the subject of subsidy on Albuquerque?
    I wonder if he came to his senses at this point. My friend used to work at Sony there and now she has to move somewhere else.

    • VFX Soldier says:

      Well from what I understand lee left new Mexico a while ago. I heard about the long “vacations” being taken by people at Sony nm. Not surprised as Vancouver is the focus now.

    • VFXpeon says:

      If you go to Lee’s website you’ll see that not only does he not work in the vfx/motion gfx industry anymore due to his deteriorating health, but he also asks people reading his blog to donate to a fund to support his own dental care which he cannot afford.

      If that doesn’t convince you that we need a union, I don’t think anything will!

  5. NateCow says:

    “Of course in order for this to work, you need VFX artists willing to move. As hot as things are in Vancouver, it’s been very difficult for studios to find workers to move there. If what I’m hearing is correct, one very large Vancouver facility may lose a huge show because of the inability to find workers.”

    Heh, I can attest to that. Prime Focus Vancouver wanted me to apply back in February, and I’d love to apply to DD, but I simply don’t want to work in Canada. Ever. Again. I worked in Toronto for a short time last year and was royally screwed on income taxes. Canada took taxes out at the time, and then the US government somehow thought they deserved to tax my gross income from that job, and then Canada came back saying I owed them more taxes. All in all, I’ve easily had 50% of my income from that job taken away in taxes. Not interested in ever doing that again.

  6. Mike Wilcox says:

    If you think this is just the film industry in michigan-this is happening to the game studios too. many workers haven’t been paid in months and may never be paid because they dont get the same attention as big studios like maxsar. this happened to my friend and hes still owed like 5 paychecks.

  7. [...] on the allure of prestige starry-eyed prospects get. I pointed out instances in Montreal, and Michigan where rich US studios took advantage of generous government subsidies and still managed to leave [...]

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