Digital Domain Pay Cuts

I was a little late to the news but Digital Domain recently announced company wide pay cuts for employees.  From what I’ve been told there was a recent meeting about the announcement that was met with a heavy amount of criticism. Some feel the timing is a bit suspect given that management announced this before the holidays and have given a deadline for everyone to agree to these new terms shortly after.

An ad hoc group of DD employees have banded together to start a site called VFX United.

Regardless of how you feel about the issue the matter comes down to simple leverage and I’m a bit surprised that DD’s new owners at Galloping Horse and Reliance Mediaworks are trying to make this risky move. Much of the talent will simply quit and move on during the middle of the projects that may not be able to finish. Also Reliance Mediaworks, while owned by an Indian billionaire, has already been losing a huge amount of money. Last quarter they lost $40 million dollars. I guess a $30 million dollar write down on Digital Domain would be considered an improvement. However, they may see an opportunity with current conditions. Some big facilities like Rhythm and Dneg have been through some heavy layoffs and Imageworks is forcing many workers to move to Vancouver.

Furthermore, Galloping Horse has been trying to play the pay cuts in the media as an “incentive-based salary system.” Apparently workers are being offered a pay cut and a chance to earn their rate back with a bonus that will ultimately be the employer’s option. No word if any execs are taking a pay cut. Anyone willing to believe in that would have been willing to take a significant amount of their salary last year and buy stock in the disaster that was Digital Domain Media Group. Just to note, it seems not much has changed from DDMG. Galloping Horse put in a bid and won rights to make The Legend of Tembo which the shut-down Florida unit was working on and they’ll again attempt to implement some sort of training program for Chinese students.

The workers at Digital Domain have until this Monday to accept the pay cuts or be fired even though many of them are on productions and term contracts. Below is a previous letter sent to some employees:

As you are aware, Digital Domain 3.0, Inc. and its wholly-owned subsidiary Digital Domain Productions 3.0 (BC), Ltd. (collectively, the “Company”) has been taking steps to improve the operational efficiency of the Company, out of necessity, since emerging from bankruptcy. Unfortunately, new economic pressures have changed the Company’s economic situation further, and actions taken previously were not enough to strengthen the Company’s financial position in the near term. As such, Company has determined that employee compensation reductions are necessary at this time.

We are informing you that your salary [rate] will be reduced by __%. Commencing on the effective date your position and salary [rate] will be as follows:

Title of Employee: _______________
Base Salary [Rate]: $_____ per hour
Effective Date: January 7, 2013

In the event that you are employed by Digital Domain Productions 3.0, (BC) Ltd. as a temporary foreign worker, the Company reserves the right to adjust the Effective Date if a required approval from immigration authorities with respect to the adjustment in employment terms set forth in this letter has not been received by the Effective Date.

Please sign below indicating that you understand and accept the salary reduction terms set forth above and acknowledge that this constitutes an amendment to any Production Contract, Staff for Show Contract, or any other agreement under which you provide services to the Company. Please return the original letter to Human Resources. If you decide not to accept the salary reduction terms as set forth above, the Company will accept your resignation from employment effective on the last business day before the Effective Date.

Should you have any questions or concerns, please do not hesitate to contact Human Resources.

Soldier On.

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196 Responses to Digital Domain Pay Cuts

  1. VFX Los Angeles says:

    They probably couldn’t have done this if they were part of a union. I just sayin’

    • VFX Soldier says:

      Well that depends again on leverage. The unions have mandated minimums so if the company tries to cut below the minimum that would violate the collective bargaining agreement. On the other hand if you are paid more than that and they ask for a cut that leads to a rate higher then the minimum it’s still within the cba.

      That being said, this is all about leverage. If an ad hoc group of employees walk out then what choice does DD have?

      • Ymir says:

        Something folks there need to be aware of . . . the letter states that if you do not agree to the terms, the Company will accept your resignation. Unless I don’t recall CA employment laws (been awhile since I was there), if you resign, you are not eligible for unemployment insurance. If they want you to leave, make them lay you off or terminate your contract. This would open up a whole new can of worms if they have no lawful reason to terminate you other than you refused to take a pay cut. But no one should automatically accept their language in this letter on how they want you to depart the company.

      • NateCow says:

        Also, by not signing, you are not agreeing to anything in the letter, including the bit about them accepting your resignation, right? How can they hold you to new terms spelled out in a letter that you didn’t sign? You should be able to just refuse and hold them to your existing contract. Reminds me of the mess during the GOP primary with Ron Paul delegates getting very similar letters. It should be as simple as not signing it.

      • vfxartist says:

        From soldier’s posted article above:

        http://english.caixin.com/2012-10-18/100448887_1.html

        “Another page of the business plan, Zhong said, calls for using the American company studio’s resources for educational services that would including training programs for film professionals in China.”

        …Sounds like Prime Focus all over again.

        “Yet Zhong said she plans to make Digital Domain’s services more affordable and win over small filmmakers, including Chinese. For example, she’s proposed offering services at different price levels: ”

        …The Microsoft-ification of VFX. And we all know how well that worked for customers… diluting the brand into different price points. This is Diluting the brand… assuming you want to keep the brand… or just poach the tech. this is the Chinese we are talking about. Knock-off-capital of the world.

        Its pains me to say this but DD is a failed business.. its effectively been bankrupt three times in its lifetime. This is not a reflection of the hard working people there, however it is a reflection fo the leadership.

        Look at the Hostess ….

        http://www.washingtonpost.com/business/hostess-to-seek-approval-for-executive-bonuses-liquidation-plan/2012/11/29/4ec8f34e-3a24-11e2-9258-ac7c78d5c680_story.html

        Execs are awarded 1.8 million to expedite the bankruptcy to maintain the value of the company. They claim its to get the 15,000 workers freed up as fast as possible to get them on unemployment. (what? really? A sudden layoff helps expedite unemployment insurance?). Truth is they want to make the company available without the labor contracts or pension obligations, the latter which they haven;t paid for over a year. Wipe the slate clean, while the top brass keeps their standard of living. Make the state pay the workers Textor style.

        So what did the union accomplish in all of this? They maintained the value of the bakery worker. They didn’t accept a lower wage for what was a failing business that didn’t invest in its product, keep up with the times (kids go to starbucks to eat snacks.. no hostess there.. they are far more sophisticated.), and have any real restructuring plan. The workers would have ended up worse off than walmart employees: working a full time job for a low wage and then needing food stamps. Mainly because the Hostess business would have failed anyway even with the new labor contract.

        BTW, the Gregory Rayburn, the CEO that was hired as a restructuring expert still gets paid $125,000 a month… A MONTH, for his “leadership.

        From:

        http://www.latimes.com/business/la-fi-hostess-20121130,0,1027676.story

        “The [$1.75 mil bonus] money is intended as an incentive for 19 top-level managers to remain with the Twinkies and Ding Dongs maker to oversee its liquidation.”

        Keep in mind we are talking about Wonder Bread and Twinklies here… Nostalgic, yes, but not a modern and competitive product. They have been replaced by Starbucks and reformed school lunches. What exactly is there to save here as a product. A future Gluten free Twinkie?

    • vfxartist says:

      They could have done this even if vfx were unionized. The thing is, the artist would have been able to go across the street or across town to the other union vfx shop and worked there instead, still keeping their umbrella coverage that is for the ENTIRE industry.

      That is your leverage.

      Just ask any Former Dreamworks employee at Disney, or former Disney employees now at Dreamworks.

      • Wheee! says:

        save that most of the folks working at Disney, at the time Dreamworks was formed, were not employees. They were non-union independent contractors. As was I. For 11 years.

      • anon says:

        For whatever reason , Dreamworks artists in Redwood City are not union either.

      • skaplan839 says:

        Wheee! – I would love to know which division of Disney you’re talking about. Having walked through Feature, TVA and Toon extensively, I can say that every artist there is an active union member.

        anon – DWA: Redwood City, aka PDI/Dreamworks, is a wholly-owned subdivision of Dreamworks. It is not included in the contract, therefore those artists are not union. Just like Pixar (and now ILM) is to Disney.

        For those studios to be union, the artists will have to stand and demand it.

  2. VFX_Boom says:

    That’s correct. This would not have been allowed if DD Venice was a Union shop.

    • skaplan839 says:

      Not entirely true. What would have been different if DD Venice was a union shop was the way in which this would have been handled.

      Anything of this nature would have to be brought to the union for discussion. The union would not simply take a “Because we have to” as an excuse. A review of the reasons with any pertinent documentation with lawyers and accountants from both sides would take place.

      Then, if the union felt this was something that wasn’t just a push for profit on DD’s part, it would gather *ALL* affected artists together and hold a VOTE.

      So, could a union shop have unilateral pay cuts instituted? Sure, once its been properly vetted and the affected members vote it in.

      That’s how leverage works.

  3. jon says:

    awful situation for all involved…dont blame DD….its simply a symptom of an industry thats under sold itself. DD are a good company with good people…no one deserves this kind of scenario.

  4. Junkie VFX says:

    This is across the board at DD? In Vancouver, I think has a minimum 3 week pay cut notice period. California has a 24 hr notice period! I hear Guys in Venice have taken a immediate paycut effective on Dec 3rd and/or being forced to resign?

    Ouch, that cannot be legally right as these artists are not eligible for UI (Unemployment Insurance) in the states and EI (Employment Insurance) in BC. Most of the DD employees in BC are leaving because they have options now, but in Venice?

    A “group” has been meeting with labor lawyers in BC to go over this as the closer they get to the expected start date of salary cuts, the more invalid the plea gets. There is a time period where the companies will have to face labor issues which will further hurt business and reputation that DD once HAD.

    This is sad, I just hope other studios don’t use this and expect EX DD artists to work for cheap or for that matter use the same salary paycut business module as DD and get away with it! 2, 4, 5, 7,10 %
    paycuts hmmm..

  5. yet_another_anon_vfxer says:

    Even the lowest-paid employees at Digital Domain got this message. I know people working for $16/hr who were given pay cuts, even though the work they do and the skills they use daily are worth three times that amount in a different industry. Included are some people who are routinely made to work excessive hours without overtime compensation because the company has them on salary. (Not just 10 hours on an 8-hour pay rate, but far more; talking routine 14-hour shifts on a set rate that’s already around the $30,000/yr mark. Those people got pay cuts.)

    So, if an employee does not accept a pay cut, the wording of that letter makes it sound like they are automatically considered “resigned” from their position, as if they chose to leave. Does this prevent them from receiving unemployment?

    • skaplan839 says:

      Unemployment benefits are voided if an employee leaves the job willingly (resigns). They are only for employees who are fired. The letter is implying that since the artist chose not to accept the working conditions, DD considers this a resignation.

      I’ll contact our lawyer and see if state law concurs.

      • yet_another_anon_vfxer says:

        I know of at least one example (though this was in IL and not VFX) where a company tried to tell an employee her job was only available at a pay cut to $9/hour. She essentially quit but the unemployment office decided in her favor and gave her the unemployment wage. She was also being required to work large amounts of overtime and weekends with no compensation. (I suspect after the pay cut she would have been well below minimum wage, if someone were to compare her actual hours to her salary. She also wasn’t the only one, the company had become somewhat infamous with that office.)

        This has not a lot of bearing on CA though.

      • B4adle7 says:

        This morning this shenanigans was brought to my attention. (no I do not work at DD). It isn’t that the letter is just offensive, but it was worded carefully.
        Nope, it does not say that if you don’t sign, it is considered your resignation. I really cannot think of how that could be in any way legal of them to do. It simply says that by the letters stated date, it accepts your signed acceptance of pay reduction, or your resignation. Nowhere does it say that you have to give them either.
        For them to tell ANY of their employees that they have to give them a resignation is illegal I believe. That is like saying “we are firing you, but refuse to pay the unemployment”.
        Please remember. DD’s financial issues are their own doing. They tried the get-rich-quick schemes, and the lets-get-people-to-pay-us-to-work model, and now seems to want their employees to pay for it.

      • skaplan839 says:

        Spoke to the Guild’s attorney who concurs that this isn’t a resignation, these artists are being terminated.

        Anyone DD artist who:

        * doesn’t take the paycut
        * is properly employed by the studio (No 1099 employee can file a UI claim)
        * and is interested

        .. should file an unemployment insurance claim after being let go by the studio.

      • Ymir says:

        It’s tricky wording, but they definitely tried to plant the idea, and steer the employee towards resigning. ” . . . we will accept your resignation . . . “

      • skaplan839 says:

        Indeed. As is pointed out in a comment below, there seems to be some reason to believe this could be a problem.

        http://www.edd.ca.gov/UIBDG/Voluntary_Quit_VQ_500.htm#Wages

        I still encourage artists who are eligible and terminated from DD to apply for Unemployment per state law.

  6. Junkie VFX says:

    “Group” BC Lawyer Update:

    “Employers essentially cease to meet their obligations and are therefore terminating the employment contract. Employees can therefore treat the contract as fundamentally breached and consider themselves as being dismissed through the employer’s actions.The employee would generally have to object to the substantial changes or incidents within a short period of time of their occurrence.

    It is not recommended that an employee resign without first obtaining legal advice. However, if the employee does resign, the employee must make it clear to the employer that the resignation is due to the substantial change or incidents. If not, This would be considered implied acceptance and may provide a basis for believing that the employee is in agreement with the unilateral changes”

    It seems all DD officially denying the change and show cause of distress and breach of contract due to the CHANGE in company policy. Hence can claim damages before the set paycut date employees also need to send in these official letters so that the company is legally bound by it! Digital Domain has no choice but have to let them go! which atleast holds the vfx artists to apply for unemployment Insurance.

    I say you guys DON’T sign and go in with official denial letters!

    Good luck.

    • another vfx dude says:

      If you are not lined up to have a new contract elsewhere when this goes into effect, I would suggest submitting a letter specifically stating that you do not agree with the pay cut, and that you find them in breech of contract. If you resign, you are not eligible for Unemployment benefits. People should not allow themselves to be pushed into resignation unless they do not require these benefits.

  7. Desk Jockey says:

    For California, at least, there is some information on how the unemployment office adjudicates wage reduction cases:

    http://www.edd.ca.gov/UIBDG/Voluntary_Quit_VQ_500.htm#Wages

    Scroll down to “5. Wage Reduction”. Summary: it’s complicated, and multiple factors are considered.

    • yet_another_anon_vfxer says:

      In all of the cases I actually know the details of, the reduction is not anywhere near 20%. The lower paid people seem to be getting lower percentage decreases and I’m sure the DD lawyers have thought this through extensively. Some of them may have good cause with the combination of unpaid overtime and weekend work along with a pay cut and refusal of vacation time during “crunch time” (which for some departments there, never ends as one show or another is always in “crunch time”.)

      Thanks for the link, I’m keeping it around. If anyone asks I’ll make sure they get it too.

  8. brett says:

    Everyone keeps talking about breach of contract by not signing it, but isnt this new contract a breach of the original contract between employer and employee? Me personally.. I’d sue the shit out of them. If you have in writing a fixed wage for x amount of time, I would hold them to that contract. They can’t decide later that they no longer want to pay you. What they can do is fire you, and hire you back at a lower wage, but they can’t force you to work at a lower wage than was previously agreed upon. At least by my logic, but I will forward this to my entertainment lawyer, and see what she thinks.

    • a guy says:

      I assume everyone’s contract states they are “at will” and can be fired for any or no reason. They can also quit for any or no reason.

      • brett says:

        Yeah, I am sure peoples contracts vary, and you are right they probably can fire or quit at will, but they are asking them to stay and work at a lower wage. Without seeing someones contract its hard to see what their legal recourse is but to me, this seems like classic strong arming.

    • Scott Squires says:

      This is one of the things that’s been going on for a while in the US regarding workers and unions (not necessarily VFX). Unions have pension plans and various benefits. Management (or politicians for public employees) decide to tighten their belt, they end up scraping pension plans and benefits that they had agreed to and that were part of their contracts. That’s a lot of what happened in Wisconsin a year and half ago.

      Even if some of this were to be illegal (like the Sony portfolio rights agreement issue), how many individuals have enough money to take it to court? it can easily cost tens of thousands of dollars to take a person or company to a real court.

      This issue once again highlights how little power individual employees have. When it is a company wide issue the only way to make any type of progress is as a group. Individually it’s easy to be intimidated and to be fired/let go. If it’s a significant group of the work force, management has to consider other options.

      • cck says:

        All contracts say “at will” I am presuming. And if that is the case I dont believe many of these people are even eligible for unemployment. At least here in florida we are able to get on unemployment. I am sorry but I do not feel for these guys loss at all. They all cheered when Florida went under and now they are being served what they dished out.

      • skaplan839 says:

        Not true. While california is an “at will” state, Unemployment is still available to workers who aren’t independent contractors and are terminated or laid off from their work.

    • FXGUY42 says:

      I have a feeling that going bankrupt might effectively void those contracts. The whole point of the exercise is to restructure.

      I dont like it, but I think youd lose in court.

      • skaplan839 says:

        Working contracts were renewed under the new company name. The contracts referred to are those.

      • Scott Squires says:

        DD itself has not gone into bankruptcy and hasn’t filed for bankruptcy. They were bought by another company who I assume had done some due diligence in the short time provided.

        There are many ways to become more efficient and to cut costs and make more profits. An across the board wage cut is a lazy and ineffective way to handle that.

        The myth would be that this alone will save DD from going bankrupt and if all employees would just be willing to continue having their wages cut then everything would be fine. Look at Hostess. At some point employees will have to determine whether they (the artists putting in all the extra work and effort) are being used as a kick-starter for the very company they’re working for? Are they having to pay for the mistakes of management (bad contracts, underbidding, poor structure, etc) Why should the workers, who are already doing their jobs well, be the ones to sacrifice so the company and investors can make more profits even from poor management?

      • Ymir says:

        I agree with what Scott says about cutting salaries being the lazy way to cut costs. A more efficient way is to look at how the company is actually running. The money people need to track where the pork and wasteful spending is happening. That means the top people need to be more involved in the day to day operations. Get down on the factory floor and see what’s actually going on. Some mentioned earlier about the incessant pixel f***ing that goes on. Where is the producer to put an end to this and say “move on”? Until things get back on track and running cost efficiently, the head of studio should be sitting in on dailies every day, watching just how shows are being run. Every one at every level of the chain needs to be held accountable.

  9. Bickleton Wigglesworth III says:

    “soldier on” seems like salt in the wound.
    dicks.

  10. anon says:

    After some research I came across these articles. I think these may be of some use to those in bc.

    http://www.bcjobs.ca/hr-advice/managing-the-risk-of-constructive-dismissal/

    http://en.wikipedia.org/wiki/Constructive_dismissal

  11. ag says:

    I think this industry is dying…is there someone else who can see it this way?

    • yet_another_anon_vfxer says:

      The industry is being killed, by the people running it.

      • vfxartist says:

        You are right. The industry is being killed by the people who run it, who admit themselves, they aren’t businessmen. The irony is that while at the ves union Q&A, you hear about how there’s no margins in vfx. Then I go across the street to check out Life of Pi, and it says right here in the ticket price menu, $3.50 extra for stereoscopic shows. The Markup is on the ticket but not the business.

        Hostess had an inferior product. We don’t. We have an inferior way of doing business and labor.

  12. xfv says:

    Doesn’t DD have a very very high standard of work? (i heard about this thing called “the gauntlet”, where they pixelfuck the fuck out of the shot after it’s already been finalled by the director).
    Wouldn’t it be cheaper to slightly lower the standard of work (while still maintaining it to a high level), instead of cutting salaries?
    It would save you from having to pay artists to pixel fuck hours on end (think of all the overtime)?

    • DD Truth says:

      You say that because you can’t even spell VFX right.

    • qualityVSquantity says:

      wow, this is the future. just brilliant

    • van_vfx_dude says:

      The pixelfuck process adds very little time based on the overall time spent on the shot in question. This coming from an ex VFX coordinator who worked at DD in the past.

    • vfxartist says:

      The “guanlet” is actually a great implementation of quality control at DD, and attacks specific technical things like black levels and checks for clipped data, matched grain.. something that will affect the quality fo the shot from theatrical presentation to blueray to chinese knockoff copy (where the black levels get beat up the most).

      But trust me, there’s other type of pixel-effing that goes on at DD and other places that throw the concept fo production economy out the window. The gauntlet ain’t one of them.

  13. Dave Rand says:

    Training program for Chinese students:

    Lesson #1

    The most valuable software in any VFX shop is not on any disk but rather in the minds of the artists at hand. You must value that above all other considerations.

    • yet_another_anon_vfxer says:

      The current state of DD is proof of this. I can name examples of shows that thought they had a technology to create a certain type of effect cheaply, only to find once they were halfway into the shot work that they did not have a technology, but a few people with a good method. People who no longer worked there, because they had been dismissed and not re-hired, and now worked at a different studio. What they thought would be a quick and efficient piece of cake, turned into a brute-force crapfest that barely made it to delivery.

      Had they retained those people, they may have actually made money.

  14. CoMPoSiToR says:

    This potentially has the power to backfire on the new owners substantially.

    Since in order to keep costs low, shows are already staffed lean and mean, as if even a small group of key artists on any one of the shows presently in production decide to get up and leave and the company can’t fill the gap in a hurry, then the real possibility of failing to deliver rears its head which could spook the studio client side causing them to pull work. That in turn could cascade across other shows if other studios feel the risk of further artist walkouts threatens their shot deliveries and schedules due to overall facility instability.

    It’s a dangerous game they’re playing.

    • yet_another_anon_vfxer says:

      Knowing DD, this is accurate. Lean and mean is a good way to describe how they run, as is “small group of key artists”.

      Compounding this, is the fact that the people losing more paycheck are the people getting the higher pay. Which means that core “A-Team” of rockstars are likely losing the most pay.

      Add in that I’m sure many people have a reluctance to take a position at DD for many reasons (the bankruptcy, the fact that there are freelancers and other vendors going unpaid, the fact that the company’s goal is now to remove industry from the United States as fast as possible) and I’m thinking DD will find their staff have quite a bit of sway at the moment. If they tell the company “No” on that pay decrease, they will probably find the resignation thing to be an empty threat.

      Now, DD artists also tend to have a lot of solidarity for their group. So I imagine most core artists will roll with the punch.

  15. i_used_to_care says:

    The solution is simple. No one take the paycut. Everyone resign. Leave them with a $30.2m bill for a sign that says “Digital Domain”, a pile of lawsuits from studios for unfinished work, and go take the work across town(s) to Sony. Same people, same work, different vendor. Destroy the people who seek to destroy you.

    But this won’t happen. Because a bunch of mids and juniors and a few scared seniors will take the cut, then get ground into dust trying to complete the work, be ecstatic when their name gets printed on fxguide, then be fired as the next show is done completely in China.

    • S says:

      Work won’t go across town to Sony because Sony is being just as mismanaged and forcing all their work and employees to Vancouver. Sony is a sad place these days. The guy in charge is killing that place too. They can’t get work to keep their own people employed in Culver and seeking out lower cost labor and tax incentives across the border.

      • i_used_to_care says:

        i specifically said town(s) because I meant both LA and Vancouver.

        The point still stands. If everyone just left, it would ( rightfully ) force DD to either negotiate fairly or fold.

    • NateCow says:

      “be ecstatic when their name gets printed on fxguide, then be fired as the next show is done completely in China.”

      Bahaha, that part cracked me up. I’ve been considering even going back and selling movie tickets at the very theater where I’ve seen my name roll by in the credits. Totally been in that boat though: seeing my name on-screen or printed, meanwhile at that very moment, the next project is being outsourced. Isn’t it so grand working on movies?!

  16. Dave Rand says:

    Confucius say: He who believe that in business the machine is more important than the person who operates it will soon lose both.

  17. bela says:

    this will keep on happening until we all grow some balls.

  18. Daniel Hayes says:

    This is a pretty stunningly terrible business decision. Given the incredibly fast turnover of workers in VFX, it would have been much easier to do what nearly every other big studio has done – lay off high-paid staff members and then focus on hiring low-paid junior and mid-level artists in places with subsidies.

    I would have thought the level of backlash you’d face by cutting pay across the board, even to people making pennies on the last few months of a project, would be pretty obvious.

    Is this how business is done in China? Honest question…

  19. VFX_Boom says:

    I’ve been curious which VFX house would be the first to completely fail to deliver a big name show. We all know it was gonna happen at some point with the current state of things.

    Now, even money on DD!!! Bankruptcy, slashing wages, no moral, and now ……no loyalty. Does not bode well. But do the folks making those decisions know, or even care?

    It sucks. There are some fantastic artists and overall great people at DD.

    • KennyLogginsDangerZone says:

      “But do the folks making those decisions know, or even care?”

      Yes. Decisions like these are made by MBAs and lawyers who have extensively researched and sought consultation about the exact effects on the workforce, and keeping the entire process above-board legally.

      • edwardh says:

        … I am not sure whether you are being sarcastic or not. At least when it comes to the part before “and keeping…”

      • KennyLogginsDangerZone says:

        @edwardh

        Not being sarcastic. Do you honestly believe that a large company wouldn’t seek legal council to make sure they’re not going to be left vulnerable after affecting 400 people’s contracts? There’s no doubt that this was done hand-in-hand with a legal team to ensure that DD’s ass is fully covered.

    • Ymir says:

      When was the original release date for “Jack the Giant Killer/Slayer”? ;-)

    • Thad Beier says:

      It was Bob Abel and Associates, on Star Trek: The Motion Picture. Set CG in film back 10 years.

    • Concerned artist and proud citizen. says:

      having the new Chinese investors loose millions when DD fails would send a sign to other studio execs and artists that a better way needs to be reached. It shouldn’t be about slashing wages and outsourcing from the inside.

      • Anon789 says:

        I hope that they will realize that no client will allow all your workforce to suddenly be in china. they could have accepted the bid from baseFx in the first place then ;)

  20. erin says:

    For a second there was a glimmer of hope that Galloping horse reliance knew that what they were buying was the people that make the DD brand. The quality they produce IS the talented people that work there. Otherwise that’s 30M worth of dusty workstations. Logical right? They must know right? Oh but no. They started with cuts cuts cuts. laying off people, scary company meetings, taking away hope then giving them a mandatory paycut. So who is going to stay knowing DD is dead? Everything has changed at DD strangling creativity and spirit. Even if you can stomach the paycut, would you want to be there? If the people leave then what do you have? A bunch of dusty workstations. Thank you Textor and Galloping Horse reliance for killing one of the best.

    • Yeah, you buddy! says:

      Not so sure on that one …. DD has become like a revolving door for a good few years, and there are one or two folk hanging around long term who have become adept at spining an ‘image’ but not really delivering the goods … writing a few books that are rehashed software ‘help’ files, training videos about making a ball bounce up and down … great to spin in a management powerpoint presentation, just leaves you dependent on hiring skilled freelancers over and over again as the s*** hits the fan come production end … plus the huge long term employee salaries of that deadwood. Textor was probably the only hope to create a viable business there … now you have a return to the ‘east india company’ of british empire days and their billionaire raj’s … that model of society brings abject poverty give or take a hundred years of stagnation and ‘cast’ system slavery. I say, ‘let ‘em crash’. But the oil in this machine is the uber competiveness of mid level CG and VFX supervisors, trying to cash in on ‘image’ management techniques to management layers, usually throwing in terms like ‘I am the best programmer, artist, lover and scholar, I should be given dominion over these co-workers..’ Seems nobody wants to do an honest job and develop a professional skill nowadays, lots of folk want to be the vague ‘supervisor’ figure, lording it over an army of raggle-taggle freelancers. Image is everything, right? Ray Harryhausen would puke at some of these folk nowadays. But that’s where we are with this vfx business model. All foam and no beer.

      • vfxartist says:

        All foam and now beer. Well put. Unfortunately the VFX biz has favored sentimentality and fanboyism over business and sense. Can’t tell you how many brits were hired as sups because of their accents almost site unseen. The industry is getting what it deserves. now we just have to dust ourselves off, learn about labor and how to negotiate, and do business differently.

  21. deanareeno says:

    Those DD employees in Vancouver B.C. should look into something called “Constructive Dismissal”, where if the employer “fundamentally breaches or changes any major term of the employment relationship, such as duties or status, you could claim you’ve been constructively dismissed. In other words, you were, in effect, fired. You could then sue for wrongful dismissal.”

    Reduced pay is one of the qualifying changes.

    http://www.lawyers-bc.com/wrongdis/articles/constrct.htm

    http://www.rosekeith.bc.ca/CONSTRUCTIVE-DISMISSAL.pdf

    At the very least, all the employees should consult lawyers in their respective regions before agreeing to anything.

    • The problem is that Constructive Dismissal is a difficult thing to prove.

      A: you need to express objection (this goes beyond simply not signing)
      B: you have to convince the court that this is a significant change to the work place. (people have lost constructive dismissal cases on much more than 4-10% wage changes)
      C: It’s easy for employers if they give “reasonable notice”

      http://www.bcjobs.ca/hr-advice/managing-the-risk-of-constructive-dismissal/

      Not that it’s impossible, and by all means consider it… but it seems like it’s kind of a lost cause to pursue it.

    • Yeah, you buddy! says:

      And people still don’t think anything strange to the way DD florida was closed in breach of WARN employment law with no back pay, holiday benefits, or notice, for over three hundred workers? With senior executives getting multi-million bonuses during the planning of all that? Remember back then, it was a ‘fuck ‘em’ message given load and clear from many folk here.? Welcome to the future! Shame on some of you! You shall reap what you sow.

  22. jaded_DD_artist says:

    To those saying this is a “terrible move” on the part of DD management…I really hope that turns out to be the case but I tend to think it is a gamble that will work for the new owners.

    The reality from inside the company is that most folks here will take the “salary realignment” and stay on either out of lack of other options or simply out of what I consider to be a misplaced “team mentality.” Real teams watch out for one another, not for a company that has renegged on its contractual obligations, but I digress.

    The real question now is whether people will continue to stay on once the current crop of projects end. The artists here have more leverage than they realize but lack of a lockstep approach turns us into a doormat for the boots of management. The very fact that more people aren’t walking out the door is telling the new owners that this move is working, and may even exert downward pressure on wages across LA.

    DD WILL finish its current studio contracts – delivering the same quality of work for less money. Studio win at the expense of well meaning employees. My worry is that given the passage of enough time the talented folks here will become complacent and continue to roll onto other projects at this new low rate.

    It is a sad state of affairs. People are not near angry enough and that apathy rolls the dice in favor of management. If every show simply said, NO – this would be resolved by next week. Instead folks are ‘taking one for the team’ or understandably not in a position to be out of work…and that, I’m afraid, will cement this “new normal.”

    Also…the whole contract thing is legal. Contracts are at will, they cannot force anyone to resign (it was simply there to plant a seed) and people will be able to get unemployment if they don’t sign. There are expert lawyers that handle this stuff and build these considerations into the calculus…

    • Scott Squires says:

      Agreed. Don’t be surprised if other vfx companies (even those in other countries) decide to lower wages as well. “Hey, we have to remain competitive.” Bad enough when companies underbid but even worse when they underbid with your wages.

      Just how many “for the team” do you have to take before it’s enough? We’ll all end up like Steve Martin in The Jerk. “And all I need is this thermos”

      In the future there will be crowd sourced vfx work:
      “I’ll do that shot for a dollar.”
      “You won!”

      • jaded_DD_artist says:

        Indeed…the back-and-forth underbidding downward spiral that VFX Studios have to engage in just to get awarded work is about to start happening with artist wages. “But I will do that shot for 99 cents!” Hired.

      • Ymir says:

        All of these companies are headquartered, or have satellite branches in high cost of living cities. It’s going to be harder and harder for artists to compete with each other paying $1,700 rents or mortgages on million+ dollar homes. Too bad there’s no place (anymore) to go where cost of living is low and quality of life is pleasant for the artist and cost of business is low for the facilities.

      • Scott Squires says:

        There’s the possible potential for work at home scenarios. There are some people already doing this. Artists living in a small town in an area of lower costs and telecommuting to work as it were. With cloud computing and storage. The nice part would potentially be a better work environment. The downsides are many. How feasible will it be to be moving terabytes of data? What about security issues fro the studios perspective? What about labor protections? You’ll still be given impossible deadlines and have to work overtime but they’ll no longer have to see you. No synergy or one to one interaction with your fellow artists and supervisors. Shot tasks will be commodities you’ll bid on and do isolated.

      • anon says:

        Actually there was a place where it was cheap to live, you could own a house, and the cost of doing business was dirt cheap. Winnipeg’s Frantic Films office was great, but got shut down once it was bought by Prime Focus. One of the many reasons being that we could produce better VFX than the indian office for basically the same price. Shots were sent to WPG rather than India, and the owners didn’t like that.

        It’s too bad. Winnipeg could have been a great place for a lot of VFX workers, but it’s not as sexy as BC even though we have a 40% tax credit.

      • anon2 says:

        I lived in Winnipeg for a while, believe me, no one would willingly move there if they had the choice. 6 months of freezing, biting, windy cold; then 3 weeks of terrible mosquito season; then a short dry, dusty summer. All the while there are lot’s of homeless constantly asking for money, and everything closes down after 6pm. Not to mention that the highest nearby point of land is a hill made from garbage. Yeah, that sounds like paradise. The only good thing about Winnipeg was Mitzi’s chicken fingers…

  23. Caleb says:

    Vfxunited anonymously. Why? Man up
    For fucks sake.

  24. Slightly off topic, but also kind of related.
    I, along with a few other people who relocated to Canada on “indefinite” contracts, with the promise of years of work, was kindly informed of my end date after a couple of months of working at Sony Imageworks in Vancouver. A little surprised, i obviously went in search of other work for when my contract had finished. When my last day came around i was asked if i could provide a copy of my resignation letter. I replied that i wasn’t resigning, that this was just my end date. A phone call was made to LA, yes indeed i was resigning! I emailed LA before i left that day, querying the situation, and am still awaiting a reply more than six months later.
    Luckily i had a job to go to, rather than having to take the enforced 4-6 month “hiatus” between projects, that a large number of the staff there had to, and were surprisingly willing to do!

  25. DDicktoucher says:

    DD is over and you need to leave before you hate it.

  26. pixelator says:

    Most of the DD artists will accept this insulting ultimatum but just to buy some time and find another job then leave the sinking ship when they are most needed.

  27. Tony Down Under says:

    A friend that works at the Vancouver location told me that one of the higher-ups interrupted Ed Ulbrich as he was scrambling to defend the pay-cuts in a company meeting. They added something like, “You know, not everyone who wants to do this work is in it for the money.” Unreal. I bet HR had some words with them afterwards.

    • Demosthenes says:

      What?! How did Ed respond?

    • ag says:

      …since most of the movies produced in the last 10 years sucks, I think everybody is there for MONEY!!!
      Don’t tell me that a movie like 2012 was a piece of Art – rather a piece of shit!

    • Locke says:

      Believe it or not, that comment came from HR. Not the place you’d expect to find a bully, but apparently this is the brave new world.

    • Paul says:

      Who in his right mind is not working for the money?! My carpenter loves his job but if I don’t give him a check he’s gonna kick my ass!

      Too many people need to get a fucking life of there own!

  28. Darian Robbins says:

    To all,

    As an outsider but great appreciator of DD’s talent. What it something we can do to help the VFX workers situation in this matter. I don’t like seeing artist shortchanged.

    Darian

  29. Thad Beier says:

    I worked at DD for a bit over three years, leaving on the first day of summer just before the true extent of Textor’s Ponzi scheme became apparent. I had a tremendous time there; the artists (you artists!) are astonishingly capable, the producers could be generals in any army, and the other production and support staff are similarly outstanding. I am proud of every frame of every movie that I was a part of there.

    On the other hand, I had built my own visual effects production company (Hammerhead Productions) with some friends 15 years ago; and when we started it we were far less capable than most of the people at DD. It would seem to me that large swathes of people from DD could do well to start their own companies. Especially today, the barriers to entry are quite small, and the contacts that you have all made within the industry are invaluable. You have natural leaders among your company who could do a great job leading a new company.

    As sad as it is, it doesn’t seem like there are companies in VFX in Los Angeles that can be counted on to look after their employees — perhaps with the exception of Rhythm and Hues. And I don’t think that it’s mendacity on the part of the owners of these companies, it could just be that the economies of scale that made big companies work for the last 20 years just don’t apply anymore.

    • Scott Squires says:

      As much as I like Thad and his gung ho spirit I would caution everyone considering starting a new company. I know it’s very tempting. I too started and ran a vfx company (Dream Quest). And yes, the barrier to entry is less than it was.

      I would say one of the problems we have in the industry is too many vfx companies already. This surplus leads to undercutting and having less demand for each one. How will your company be different than a hundred other companies? Who will be your clients? Don’t expect the studios to be lining up even if you’re cheaper. Where will this extra work come from, how can you do it profitably, etc? If you think getting work and keeping employed is an issue, it’s nothing compared to trying to keep a real company employed and busy. Every year there are small vfx companies closing up. You don’t hear of them because they’re smaller company but don’t think starting a vfx is the fast track to continual employment at your own company.

      Visual effects is a project based service. Ideally the better companies hustle and get more work in to try to maintain a consistency but don’t assume it’s smooth sailing. Look at R&H, they had their own layoffs. If companies actually made widgets there would be less fluctuation but that’s not the case. Animation companies that make their own content have a but more control over the scheduling and amount of work flowing but even there they usually end up with dips in production.

      Most of those working in film are project based. They finish up one show and then try to get work on another project at another studio. As long as you have alternative companies to work at, are paid a better than average wage and in their case have continuous health care, then it’s not a major problem.

      • vfxartist says:

        I also caution people from beige so gung-ho at starting their own shops. We just had two vfx biz folks at the VES union panel that admitted to not being business owners and that they like working on “cool and awesome” images. We need a little more than fanboys. Thats what leads the DD people to think that some people don’t do this for the money. This culture of the vfx fanboy teamplayer has to end. IT should all be about business profit and money.. because there is money to be made.

        What artist need to focus on is understanding solidarity. Yes, you can hand a shingle on your door, but realize that you inherit all of the liability of running a business.. and one notoriously known for low margins. Artist need to understand that without fixing the value equation of the business, any short term pie-in-the-sky dream is exactly that.. a dream.

        Plus DDer’s, luv you guys, have NO concept of work life balance. Any artist turn manager will likely be a workaholic with no reason to go home, want to just hire his like thinking buddies, and work off the flat rate “we are all family here” model.

        Same shit different day.

    • Dave Rand says:

      My friends at Atomic Fiction some of the core folks from IMD formed a great company up in “expensive” San Fran ….One of their first projects was FLIGHT Robert Zumeckis’ return to live action (Ironically Atomic is now on every list to wind a VFX award for Bob Z’s “live action” show) Check out this fine fxGuide Podcast where Kevin Bailie (who often posts here) describes how the use of cloud computing via Zync tecnology makes so much possible. http://www.fxguide.com/fxguidetv/fxguidetv-160-flight/ Anything is posible. I once put a team together that subleased some space at expensive Universal…right on the lot…from Thad and his friends at the fabulous Hammehead Productions actually. We did a whole shows 155 vfx shots in 6 months. Everyone, from tracker to copositor of the 20 man team made 3k/week and in the end we came in way below the bid from a subsidized Canadian shop. The secret to that success was that we worked on a cost plus basis, we did not bid shit…and the director came every day because of that..he was really the vfx sup…although we had an excellent one. Squires is right ot caution….the current business models are flawed and very risky but I believe that will change as it did for the rest of the talent decades ago.

  30. AnonymousVFXer says:

    My deepest sympathies go out to all DD employees and those elsewhere in the industry being faced with similar heart-wrenching circumstances. Our industry is certainly in a state of unprecedented crisis.

    Though I do feel forming unions and collectively bargaining for improved conditions & fairer compensation is a step in the right direction, it by no means represents the only option available to us artists. One very promising alternative that all in our industry should give serious consideration toward is the formation of Worker Self-Directed Enterprises (WSDEs) – also known as Worker Cooperatives or Employee-Owned Enterprises. Unlike traditional corporate organizations that concentrate power in the hands of a few executives – and who are primarily motivated to maximize their own & shareholder value and hence in many respects are in direct opposition to the needs of the majority of workers – WSDEs operate in the exact opposite fashion; with workers themselves managing & sharing the decision-making, what to do with the profits and whom collectively vote any executives into (and out of) their respective positions. In essence the workers become the shareholders and executives then work for them.

    Unlike other industries that are capital-intensive, we are in the very fortunate position to be able to apply our high-skill trade with a minimum of startup & overhead costs. All of the extraordinary artists at DD could quite readily walk out the door and reform under a new banner, leaving all the debt of the company behind as well as the generously compensated executives that do not have their interests in mind.

    For anyone who is interested in further exploring the option of WSDEs I highly recommend the educational materials available here:

    http://www.democracyatwork.info/

    • Scott Squires says:

      Sounds good but there are some difficulties with this model for vfx work.

      Most small vfx companies start as owner/operators already. VFX work is project based. If it was a steady stream of widget making or service to the general public then it would be easier to have all employees be owners. With vfx there will be times when there is a lot of work and there will be times of little work. Does the entire crew cut their wages to the bone during the slow time. Are they all willing to do that? So what do the ‘animators’ on staff do when a show comes in that is all compositing? What do they do when they need extra hands for a month? Are those people employees or owners? You have to separate investment/ownership of a company from guaranteed of employment.

      It will be tricky to make work for a vfx company of more than a few people.

      • AnonymousVFXer says:

        Hey Scott,

        You raise valid concerns/questions.

        I would say workers operating in a WSDE would have many more options on the table than they do today in manager-owned enterprises and this in-turn would allow them much more flexibility and say in contending with the inevitable ebbs & flow of project-based work. Unlike today where workers are thrust out of their positions with zero choice, in a worker-owned enterprise they would democratically decide the course of action. I for one would gladly take a pay cut (and some R & R) in lean times if it meant knowing my fellow coworkers (whom I’ve invested heavily in to build strong team-based efficiencies) would remain when the next inevitable mind-searing work crunch hits. I don’t know how many times now in the course of my career I’ve trained up new recruits at massive effort (and stress) only to see these same poor folks shown the door at the end of a production right when they were really hitting their stride and capable of bringing much greater value to team & company.

        On the flip side of the “lean times”, one must also consider the decided advantages during times of “fat” that WSDEs have over their manager-owned counterparts (which limit upward employee compensation, i.e. by their wages), in that the profits are also democratically managed & distributed and therefore workers are much more strongly incentivized since they stand directly to benefit. What we have today is a structure where managers/executives reap the vast rewards during the good times, and during the down let the workers take it on the chin – as the poor artists at DD know all too well. Also, as we all know executives are directly incentivized to pay workers the absolute minimum they can get away with and where a WSDE would bring opportunities for more equitable wage & profit-sharing arrangements.

        As for your concerns during extreme ramp-ups or where someone is needed for a short stint – a month or so as you say, this can still be handled as it is done today by hiring them as an independent contractor, but in a WSDE where the company proper is composed of worker-owners they would also democratically decided how such individuals might enter the fold. If I were personally involved in crafting a company policy for such circumstances, I would recommend some form of “vesting” system where contractors who worked with the company over an extended time, albeit in small chunks, would gain the opportunity for voting rights, profit-sharing, etc.. This would also act as an additional incentive for attracting and retaining high-calibre talent since they also stand to benefit from the success of the company.

        As for your concern as to what artists of given disciplines (e.g. Animators) would do when their skills are not needed this can be handled in many ways. The “vesting” example I give above could provide one means, but also one should also consider the benefits of cross-training so artists can switch roles depending on the shifting needs of production. I know of many artists who today have skills that are much wider than the narrow discipline their resumes state and whom employers assume they are only capable of. I personally would advocate for cross-disciplinary training programs that during down & lean times workers (and even contractors) could voluntarily take part in. This not only benefits their skill set, but also allows them to get first hand experience how other departments operate which in-turn increases overall company communication/efficiency.

        Lastly, as for your concerns that a WSDE could only operate on a small scale I highly recommend taking some time to go through the materials at the link I sent in my post for examples of existing companies that operate on scales many times larger than those we find in our industry – and whom run the gamut from low to high-tech. One specific example I will point you to now is the Mondragon Corporation (http://en.wikipedia.org/wiki/Mondragon_Corporation) in Northern Spain which last time I checked employs around 120 thousand (approx. 83 thousand of which are worker-owners).

        Hope what I’m tossing out here is helpful and illustrative of the potential benefits WSDEs may offer our ailing industry. They certainly are a different animal and it can take a little bit of time to get one’s head around them.

        Cheers!

      • Scott Squires says:

        Good points. And if there is a reasonable way to make it happen so much the better.

        What many forget is that all film jobs have been freelance since studios closed down their ‘factories’. All camera, grip, makeup, directors, writers, etc are all project by project workers. That’s why they tend to get higher pay than someone in a ‘permanent job’. And thats’ why they have unions with continuous health care, to make jumping from project to project easier. All vfx jobs were like this and most still are. Since people go from school to working for ‘companies’ they assume it’s like working at non-vfx companies. It’s not. That combined with a string of projects if they’re lucky reinforces the idea is a permanent job when it is not. Lulls in projects and employment aren’t always simply because of management problems.

      • AnonymousVFXer says:

        Hey Scott,

        Yes, you are absolutely right. For the more nomadic types of positions you speak of you most definitely want strong unions to support workers in these fields. Fortunately, for most of the positions you listed they’ve been around long enough and through the decades of hard-won battles have some basic protections. Unfortunately, for VFX artists we are late to the game and therefore collectively are not doing so well. We must all unite and continue to support each other in this pursuit.

        I hope I in no way implied lulls in employment being solely a result of management problems. We live in a complex interwoven world so I would be the last to make such a charge.

        I personally have freelanced, worked for small and large companies over a twenty year career and am under no illusions about “permanency” in any of the positions I have held over that time. WSDEs are by no means a “one size fit all” solution so one must consider if the fit in a given situation is appropriate or not. I for one see them as a very promising alternative to the current hierarchically structured visual effects/animation companies which I feel come nowhere near tapping the full creative potential of the workers under their direction. In this respect, those artists who may form under a WSDE umbrella may very well find themselves in a strong competitive advantage over their executively-directed counterparts since many more minds will be set free & invested in solving the myriad of complex challenges that are inherent to such enterprises.

  31. [...] VFX Soldier – Digital Domain Pay Cuts [...]

  32. Former VFX studio owner. says:

    This idea of an all owner VFX house has been done before, and in the end was a disaster. I’m speaking of a company started back in the late 90s called Station X Studios.

    Station X was formed by 22 former employees of Digital Domain who left more or less en-mass in the Fall of 1997. The idea was that this new artist/employee owned venture would flourish unshackled from the grip of executives who didn’t have the artists or the work as a top priority. Instead the owners, who were most of the workforce of the company would band together and act as a group to further the art while at the same time making a decent living by cutting out unneeded senior executive management costs.

    We rented a 25k square foot space in Santa Monica for a steal. We also didn’t have any startup capital. All expenses where funded by incoming work, so we weren’t beholden to any shareholders or investors. We were able to leverage equipment and software through relationships we had with vendors formed over several years to help us get things going infrastructure wise at little to no cost, and we had artists proficient at using these tools.

    Out of the 22 owners, we elected a CEO, who was “one of us”, and also decided on our business affairs guy, someone who was a VP at DD but left the company around the same time we all did. It seemed the synergy and timing of everything was perfect.

    It turned out to be a disaster, and here’s why.

    When you have an all owner company, everyone needs to understand that it can’t be run like a democracy. It just doesn’t work. At first everyone was happy and working hard towards the goal. That lasted until about the time that the work started slipping off and suddenly there were 22 mouths that needed feeding but there wasn’t enough revenue to support them. If only say, 8 guys are actually working on a project, and the money coming in supports just about their salaries only and other fixed overhead costs, how long do you think it’ll be before the people who aren’t working, but still want paychecks start getting on the nerves of those who are pulling the freight? The answer is not long. The sense of camaraderie goes out the window real fast when guys who feel that they’re pulling all the weight yet have to settle for fractional paychecks because “we’re all in this together” is the only binding aspect of the organization.

    Obviously this is long term an untenable situation. The solution is of course more and bigger work, which we did manage to achieve, but that in turn led to other problems, which is staffing up.

    Staffing up creates a whole new paradigm. Are the new employees also owners? We decided at that point that we had enough owners so we just hired them as employees, and for the most part being an employee was a better deal than being an owner. The reason was simple: staff always had to be paid. Owners could get reduced paychecks, or no paychecks because that was the price you paid to be an owner. By law however, we couldn’t ask that of the staff. They got paid regardless, and often at the expense of the owners who didn’t since there just wasn’t enough money to meet a full payroll, and this happened more often than anyone originally bargained for. Owners often went every other week without paychecks, or even as little as once a month, even with minimal staff.

    The answer seemed to be to release staff, but some of the staff had skills that the owners lacked, such as HR type stuff and accounting, so we were stuck. We had too many owners of the artist type and not enough of the nuts and bolts running the day to day business types. The next option was the release owners, especially the ones who were the most often on overhead. The problem with that was that no owner could be dismissed without the unanimous consent of all the others, something politically damn near impossible to do as no one wanted to walk away from their position in the company, meager as it may have been.

    In the end the whole thing imploded as the most valuable members of the company started to leave, leaving the lest valuable members around to try and run it. Eventually everyone was sick of the whole experience and the company folded after about 2.5 years.

    As much as everyone likes the idea of an artist owned company, in the end it still needs a dictator to make the tough calls and run the business, because that’s what it is at the end of the day. Trying to run it like some sort of commune where everyone votes on a course of action doesn’t work as a whole host of other problems crop up and destroy the company just as easily.

    • Scott Squires says:

      At Dream Quest we had 6 equal co-owners but everyone else was hired. Similar issues of who’s pulling the weight and skipping our own salaries at times. Anyone setting up a company need’s to separate owner/investor from employee. You can still be an owner and have a share of the profits (if any) but it’s hard to guarantee employment. The impulse for us was to pay all owners the same but in reality you have people that make different amounts. If you need to replace them you have to be paying standard wages. Also critical to have a buy/sell agreement at the start to layout how the value of the company will be calculated and what the payment is if/when a person leaves.

    • AnonymousVFXer says:

      You raise many good points about the different challenges worker-owned enterprises face versus those of manager-owned enterprises. Station X is certainly illustrative of the types of things that can go wrong, however I wouldn’t extrapolate from this individual case and say all companies that might form in such a manner would somehow be destined to fail and therefore we must forever relegate ourselves to dictatorial management. Depending on the types of people brought together and the policies enacted you can have very different outcomes. Successful cooperative enterprises exist throughout the world and I see no inherent reason why our industry would somehow be exempt from such a structure.

      We’re all learning as we go so we should expect plenty of examples where things go horribly wrong. This can be said for all types of enterprises.

      1) Station X = FAIL
      2) Study what went wrong and establish new policies.
      3) Station Y = SUCCESS or FAIL?
      4) If FAIL go to step 2

    • vfxartist says:

      “Station X was formed by 22 former employees of Digital Domain who left more or less en-mass in the Fall of 1997.”

      That was your first mistake. Good artist. not good managers. I met many alumni from that “graduating” year at DD (read: titianic layoff) while at Disney. Luvable but odd bunch. They all thought that managers should be filmmakers and artists, not managers. That made no sense to me. Disney had hired a bunch of Chicago stage managers to run the Disney digital studios. They may not know filmmaking, but they really knew how to manage artist. Leave the fillmmaking to the directors.

      Today we see many of these “artist manager” vfx shops. I walk in to see someone’s idea of pop culture as if placed in puree mode in a blender. They put emphasis on skateboards and having pets in the workplace over sustainable business and health insurance. They will walk me through some funky architecture that was the home of some start up company three companies ago, talk about how the impractical stairs or low hanging beams that bang your head is so cool, then nickel and dime on my “flat” rate. The Culture of Self is now the business plan apparently.

      No thanks.

      • brett says:

        You just described Psyop – at least

      • Former VFX studio owner. says:

        The 22 owners was the first mistake for sure, which was the point of my post. Too many conflicting interests, too many egos that all had more or less an equal say in how things should be run. In hindsight, I’m surprised it lasted as long as it did, and gave me a new found respect for companies like DD that have managed to stay afloat over the years.

        It’s not easy running one of these houses, and to navigate the murky waters of this industry requires a special breed of shark, because whomever takes that roll not only has to manage the business internally well, but also deal with all the other sharks on the outside who’re always looking for an angle to try and eat you.

        What sucks I suppose about being the shark running things is no one sees that they’re ones bringing in the work and making the tough calls to keep the place running, they just see a shark, and not many people like sharks.

      • Anon789 says:

        Luma?

  33. Hopefulasianamericanartist says:

    It is an interesting comment on human nature that none of my fellow VFX artists and posters here have given a thought to how other people are being treated, or the management philosophy of a company, until it impacts them. Digital Domain for the last twenty years has had a sorry history of employment and contract lawsuits. Ed Ulbrich and Scott Ross in his day have been sued dozens and dozens of times by talent whose contracts were not honored, or who got to expensicve, or who were on the wring side of pollitics, or most importantly, who happened to be women. There are many, many discrimination lawsuits from women who at one time held sei=nior positions at DD than you can shake a stick at. At many times over the years, artists on temporary visa’s had their status used as a lever against them and on many ocasions such artists contracts were terminated without warning forcing unolanned moves and family disruptions. Although everyone who has ever worked there knows that DD treated a portion of tehir employees and many managers in a really shitty way, the majority of people there never expressed an opinion, never suggested that thiskind of environment mught not be in the best interests of the company, never expressed any ethical solidarity in any way. In fact, as long as the shop was getting big projects, and you were on the good side of Ed, then everyone happily pretended (as the author of this blog does) that Ed and his team were only there to promote good projects and good work and any evil that might occur to others must come from some obscure higher level fo financial management. I have three points to make: 1. That the pirate flag flying over the building most saw as a raucous sign of rebellion was in fact truth in advertising, represented the DD brand and is exactly how they treated both their invstors and their employees for 20+ years. They took 100 + illion from IBM, 100+ million from Cox Communications and tens of millions of dollars from Indian, Chinese and American Investors. All this money has disappeared, depsite a huge project cash flow. Employees from the first 15 year period were induced and incentivized with stock options rather than wages and many of tghose employeees exercised those options. Tens of tousands of dollars wereb paid by those employees for actual stock, which was purpsoefully made valueless shortly theerafter when DD started creating a pyramid of ownership corporations.
    2. The one senior manager involved in each and every one of these decsions, despite protestations otherwise, is the guy now violating all the existing agreements and ignoring in many cases, voiding the contributions of artists and managers who have been loyal and contrubuted to the value of the company for at least a decade. 3. All this talk about unions and employee action, and outrage only coms about because now a majority of people are being shit upon. If artists ha, at a minimum, observed how other people were being treated and at a minimum, made their employer aware that ethics and far treatment were an important value, expressed some dissatisfaction with seeing other poeple treated poorly, then hey, and the company would be better off today, because much of the excess, muvh of the iresponsible behaviour to both emplyee and investors, would have been held somehate in check. This is the eternal struggle with the idea of unions or some structure to maintain working condidtions, people have to believe that treaqting people well is, in the end,the most profitable thing and discourage those who are only interested in personal gain. All this talk and outrage now is like closing the barn door after the cowa are all gone. Good luck to those who have been treated poorly ! .

    • vfxartist says:

      Excellent post, Hopefulasianamericanartist. I think this points to the general cultural problem in VFX. This Pirate attitude. This is why I say to unionize to better your conditions as a whole, not to get back at your employer. The latter fizzles out quickly. The former is more substantive and takes planning and thought.

      It wasn’t until the paycut happened that some, not all, got motivated. Yeah, in practice, many of these tectonic shift happen with a catalyst, but VFX artist have to learn solidarity. Because in order to maintain a union, you need solidarity.

      DD was/is still the “throw under the bus” capital of VFX. I’ve never seen so many good artist reps get poo-pooed while the cause is usually bad leadership/management/planning and above all else communication.

  34. jaded_DD_artist says:

    As I stated above I think that Digital Domain, under direction of its new owners Galloping Horse / Reliance Media, led the charge and took a gamble on a hard wage-reset in the US vfx artist market – and they won. Other companies will follow suit.

    The question now is what can be done to stem the inevitable wage-stagnation? I think the most realistic option is a union. As rosy as an employee-owned venture would be – given the historical industry apathy toward unionization I highly doubt there is a collective wherewithal for folks to run out and start some co-op. We can’t even muster up enough action for a union! Furthermore a union has the benefit of being portable and already has a dedicated infrastructure in place.

    What floors me is the continued resistance to unionization. I suspect that computer-based industries like VFX might be more reticent to unionize due to a large concentration of libertarian-types who harbor de-facto anti-union sentiment as part of their entrenched belief system. I certainly hope we all come around…the success of Digital Domain’s pay cuts have sounded the bell that will ring in the slow downhill slide of the US VFX Artists way of life.

    If anyone fears that unionization will only hasten the flow of jobs overseas my counter to that would be that it is only a matter of time at this point…might as well dig in our heels and make a stand to at least ATTEMPT to protect the price of our skill sets. I think the double whammy of subsidy-induced overseas production combined with the wage-stagnation / slippage now here in the US is the writing on the wall.

    In this current market environment I can’t see my wage keeping pace with inflation or cost of living within 5 years. The privilege of working on “cool movies” and “cool shots” does not pay my bills and help me secure a decent standard of living for my family and in my opinion should not be motivation enough for any adult person to stand by while their livelihood is actively devalued.

    When outrage over this fact overcomes “union heebee-jeebees” only then will we get our acts together. The Studio Big Boys have grown up and are playing smart and savvy…leveraging where they can by shopping via subsidy and taking full advantage of the granularity of our industry. Lack of a collective front at Digital Domain has led to their victory at our expense and this will continue to be the case. The fact that we are not unionized is no longer a badge of honor…it is a mark of embarrassment and a testament to ignorance.

    Cost of living will continue to rise. Cost of health care will continue to rise. Profits on big-budget vfx movies will continue to rise as insatiable demand for these types of films continue to rise. Unfortunately it is quite possible that our wages will not continue to rise proportionately.

    • VFX_Boom says:

      DD artists are pretty upset now. But, are they upset enough to say “No” when asked to go to China to start training their replacements?

      We do nothing as is. Might as well continue the VFX tradition of doing nothing and not train our replacements. At least not with a dumb smile on our face.

    • Ymir says:

      High cost of living = ‘cool city’, i.e. Los Angeles, San Francisco, Vancouver, London. Nobody wants to live and work in an ‘uncool’ location, like New Mexico, Louisiana, etc. We reap what we sow.

      • jaded_DD_artist says:

        I think plenty of folks would move to an “uncool city” if there could be a reasonable guarantee that the opportunity wouldn’t evaporate on a whim. I know people who went to both New Mexico and Florida…dragged families around with them…and then had their jobs pulled out from under them. People who realize this is just a job would be fine living anywhere if it afforded a decent standard of living and a stable base.

      • VFX_Boom says:

        @Ymir, are you suggesting it’s the VFX works fault for not taking pay cuts, and living where not many folks would like, all the while VFX films make record profits for the Film Studios?

      • Ymir says:

        @VFX_Boom, not at all. What I am saying, is there has been a lack of support for working in places that don’t lie along the Pacific coast. Especially in various thread comments, these places are referred to as ‘out of the way’ or ‘middle of nowhere’. I can’t think of anyplace more nowhere than Vancouver, expect maybe Juneau or Nome. Or Wellington, N.Z. Before governments started dumping taxpayers’ money into kickbacks to lure productions, these places were just as nowhere as Albuquerque or Baton Rouge. But artists seemed to throw their support behind these ventures because they were going to work in a cool city. Who’d possibly want to leave L.A. or S.F. for some town in fly over country? If you were going to leave a cool city, it better be for a cooler city! These places could have failed just as easily if they couldn’t attract the talent. I worked in Albuquerque. When Sony had big recruiting drives to staff of for shows, I tried to sell the benefits of working in Albuquerque (lower state income tax, easier commutes, easier to get out of town to do stuff). A few came, but most people sounded like they wouldn’t be caught dead working there. If you’re going to travel for work, you might as well live in a lower cost of living location so that during the down times, or pay cuts, cost of living is not the issue it is when living in Los Angeles, San Francisco, London, Vancouver, etc.

  35. Scott Ross says:

    Dear hopefulasianamerican artist…. you are totally full of shit.
    Scott Ross

  36. Scott Ross says:

    In my 13 years at DD there were only two lawsuits regarding employment.

    BTW, IBM’s investment was $15M and Cox’s investment into the Company was $20M. Options were offered to DD employees as incentives not in lieu of pay. The Options, if exercised, by their vary nature were a gamble at best. The Company was not public nor very profitable. Management was very careful not to encourage exercising Options. Certain employees, after leaving the Company ( for better opportunities at places like The Secret Lab) decided to exercise their options because they, according to the Option Agreements (which they signed) would forfeit their Options upon leaving.

    Greed was most likely the reason that the few employees did exercise their Options. It was most certainly not because anyone in Executive Management encouraged them to do so.

    When the Company was sold ( against my better wishes) the purchase price of the Company did not exceed the investments of the preferred shareholders and there for did not have the option holders (the very few that did exercise) in the money.

    I feel badly for those who exercised, but they did so of their own free volition and their gamble did not pay off.

  37. Scott Ross says:

    and finally… during my tenure as CEO of DD, I hired 7 men and 5 women into senior management positions at the Company. I am proud of my track record regarding equality.

  38. bc-anon-la says:

    The purchase of DDP and wage paycuts remind anyone else of Pac Titles downward spiral before they finally closed shop?

  39. Concerned artist and proud citizen. says:

    As painful as it may be, artists at DD need to walk. There needs to be enough pressure applied for DD-China to fold. We already know what management plans to use DD for. If this model of doing business succeeds for them at DD, they’ll start buying up other studios as well as they see fit. Do no reward that.

    I think artists world-wide need to understand what’s going on here. This is out-sourcing from the inside. It’s no longer companies like Apple outsourcing factory work to make products they sell here in the US. Now whole companies are being outsourced from the inside in order to provide products (in this case VFX) for world-wide audiences. VFX is only a fraction of what’s going on with global outsourcing to less skilled workers by government-backed companies in places like China. This is the new reality. More and more sectors of the major economies are selling out their workforce, goods and even name to countries like China. After all, money is money.

    I’ve been out of work for a few months, still living on my earnings and what my wife makes, so I’m not saying this out of the blue at a cushy job, nor do I have anything against hard-working Chinese who do the best they can earning below a functional minimum wage to support their family. Again this issue is bigger than just DD being bought, or Apple using cheap labor overseas to make devices being sold here in the US. The agenda is far more reaching.

    I think a union, which has been talked about for YEARS, needs to happen immediately. Secondly, I think countries need to provide better incentives to keep work AND corporations in their respective countries without outsourcing. If incentives won’t work, then levy penalties and tariffs. To fight the buying up of a country’s economy and resources, leaders must be willing to be vocal and take up arms.

  40. Concerned artist and proud citizen. says:

    As an artist, you put in the blood, sweat and tears to get to where you are now. You put in long hours and probably quite a bit of personal funds for training, relocation, etc. You put your families and friends through some tough times just so you could create some killer art. You should be pissed at the thought of taking a pay cut to train someone yanked off a street in China who was told to sit in a chair and learn from a master (you). You should be pissed that all of the years you dedicated to DD and your craft are now going to waste as an unskilled laborer (not artist) is eventually going to take your job.

    DD artists need to get angry. They need to walk. Leave DD on Y O U R terms and not some foreign-owned company only interested in you training people in their country. Let DD languish and remember it for what it once was. Have pride in yourself, your work, your co-workers and even a bit in your respective country. God knows the Chinese do, so no reason why a person in the US shouldn’t feel a sense of pride in their country, regardless of what corporations here are doing to sell it out. Taking it back starts at the lowest levels. People need to be proud and fight. from the ashes…..

    • bela says:

      nice talk. but who walks the walk ?
      spinelessness, spoiledness, lack of balls and courage, fear of wives or husbands will keep most people working.
      also many cg artists i know did not fight for anything ever in their lives. and they have no real friends or real lives just work.
      they will keep on working too.
      so except for a few hotheads, crazies and real men/woman, nobody will walk out with you.
      i don’t like it but this is how i see it.
      George Carlin talked about the ‘pussyfication’ of the american male…

  41. A says:

    A few hundred clerical workers at the LA Port went on strike. This is what you get when you show some balls. Why can’t VFX artists do the same?

    http://www.npr.org/blogs/thetwo-way/2012/12/05/166550826/deal-struck-to-end-l-a-port-strike-walkout-was-delaying-billions-in-goods?ft=1&f=103943429

  42. vfxlies says:

    Not all artists are receiving paycuts. Only those that DD is willing to lose. Ask around and you will see for yourself. Those not getting cuts are being quiet about it.

    • polyphemus says:

      If that’s true, I’ve experienced that first hand at another, now defunct studio about 10 years ago.

      “Everyone gets the pay cut”, Except for those who fought against it. At the time I was fairly junior and I had little to lose by saying no, I can’t afford a paycut at my level. I was afraid of getting let go, or not getting picked up again on a future gig but that never happened.

      Back then, there were folks who took the pay cut “for the team” and others who “kept quiet” about it.

      • vfxlies says:

        It’s the classic squeeze to try to get employees to quit so the company won’t have to pay unemployment. So many people will accept or resign. The next step is lay offs for those that wouldn’t take the cut.

        Hint on who’s not getting pay cuts: Maleficent.

    • jaded_DD_artist says:

      vfxlies is right. I think it is important to know that Ed Ulbrich *straight up lied* to the entire company during a company meeting while he was “addressing rumors” one of which was that certain artists had been able to negotiate their way out of a paycut. He said this claim was “not happening” and “absolutely not true.” I can tell you that it absolutely IS true as I have personally spoken to artists who negotiated their way out of the pay cuts.

      I think more power to them as they stood up for themselves and used what leverage they had when so many others just bent over.

      The fact is that the pay cuts *are not* across the board and that Ed lied to the entire company regarding this matter is indicative of an unhealthy management ethic in my opinion.

      I think it also demonstrates the leverage that we as artists do have if we choose to exercise it.

      I suppose further layoffs would not surprise me. There is some serious restructuring going on around here…

      • vfxworker4000 says:

        Do you really believe what they say in those meetings? Most of it is to keep you complacent so you don’t look for work elsewhere. DD knows the deal. There’s no jobs in LA and tons of unemployed vfx artists. They can have their pick. It’s like a shadow roster in football. Keep unemployed people by the phone in case one of their players go down.

        DD’s one of the better places to work in LA, but they don’t owe you anything, and you don’t owe them anything. You provide them with a service, and they provide you with cash. If you are more valuable to them, they provide you with more cash. Business as usual.

  43. bela says:

    divide and conquer

  44. vfxworker4000 says:

    DD was never a well run business. So much wasted money burned in the pipeline when shots are redone over and over and over again before the client even sees a sampling of it. If they cut out the extraneous “ooo, wouldn’t it be cool if…” and just iron out a concrete plan with the clients before actually moving forward with the work, (like for example, follow the previs) they would be under budget every time. But where’s the fun in that, right? Hence a business running at a continuous loss.

    • Scott Ross says:

      “DD was never a well run business.”

      vfxworker4000

      … and you would know that because?

      I love the “expert” opinions on how well run or how poorly run a VFX facility is. Keeping a VFX facility afloat is almost impossible.. Note the closures… The Secret Lab, Asylum, CafeFX, The Orphanage, Station X, BOSS Films, Apogee, VIFX, DreamQuest Images, and so many others.

      In fact, the only longstanding non studio or director owned VFX facilities in the US are Digital Domain and Rhythm and Hues. I’d say the “business” is a bad business but given the incredible difficulties… it’s a miracle that these 2 companies have been around for 20+ years. And, as far as I know DD NEVER missed a payroll ( at least not in the 13 years I was there).

      Dear vfxworker4000… I’d say you need to walk a mile in the shoes of a VFX facilities CEO…until then…. shut up. Stop pointing fingers and start solving problems. Your bosses are not the problem, your heroes are!

      • vfxworker4000 says:

        I don’t pretend to be a CEO. I don’t even know what you guys do. If I make any comments with regards to how a CEO runs a business, then yes I will respectfully shut up.

        I made points on where DD burns money in production. Read my post again. I do solve problems. Starting after the first sentence.

      • brett says:

        Heavy is the crown….but it sure is good to be the king!

        to vfxworker4000’s defense, DD did release their business financials when they went public. I suspect their very poor business models was one of the reasons it instantly nose dived.

        But, what do I know.

      • Scott Ross says:

        I guess one needs to talk about DD w version numbers… DD v1.0 (1993-2006); DD v2.0 (2006-2011); IPO DD v2.1 (2011-2) and now post chapter 11 DD, v3.0.

        I agree, versions 2.0 and 2.1 were horribly run “businesses” and time will tell regarding v 3.0.

        On the other hand, no VFX businesses make money. And the quality of work that DD has always produced has been stellar.

      • JustCurious says:

        If no VFX business makes any money, why be in business at all? I really can’t comprehend it. I also find it hard to believe. i saw the financial statements when DD went public. the guys at the top seem to be doing just fine. And here’s just one of many examples from my years in VFX as to why it makes me crazy that artists are always being accused of being too expensive:

        I did 1 show at DD and on my first few days, everyone was too busy getting a trailer out to assign any work to me. I was told to read the Wiki pages. I think there were about 4 of them. I had just moved across town and had a lot to do at home so at 6pm, I asked if it would be ok that I go home since I had nothing to do.

        Prod: (looking at me as though I was crazy) “well, we’re on 10s to get the trailer done.”
        Me: “but I don’t have a shot yet.”
        Prod: “but we’re all on 10s”
        Me: “you want me to sit here until 8pm when I have nothing to do?”
        Prod: “we’re on 10s so yes”

        So I shopped for a car on the Internet while being paid time and a half. But yeah, I’m too expensive. Crazy.

        I just got a call from DD recently asking about my availability for the next 3 months. I should have asked what the offer looked like just out of curiosity.

      • Scott Ross says:

        “If no VFX business makes any money, why be in business at all? ”

        Some of us saw it as a springboard to being very profitable… PIXAR, Blue Sky, PDI/DWA…. Content.

        If no IP ownership, the answer to your question would be….one shouldn’t.

      • A says:

        DD Florida was DD and not some special exception, and I’m here to tell you DD owes me 60 days of back pay for violating the W.A.R.N. Act, plus my vacation pay they contractually and legally owe me.

        So when you say they never missed a payroll (while you were there or otherwise), let’s not split hairs on it. That claim is not true.

        There were so many blatant lies told, and laws broken by DD, I find it shocking anyone would come to their defense.

        Please don’t try to exorcise DD from John Textor because he wasn’t some rogue dictator. DD Venice, Vancouver, Textor, his board of directors, the other management–they’re all parts of the same entity. Don’t come here with Ed Ulbrich’s “Digital Domain 1.0, 2.0, 3.X” nonsense. That’s like saying, “It’s Bernie Madoff 3.0! It’s a totally new Bernie Madoff!” That’s a clever business ploy of squirming out of their crimes. Ask a former DDMG employee, or a current one, if they feel like this is “Digital Domain 3.0″. Do you think we see a big difference, or buy into this lie?

        Blogs like this are a very powerful tool for getting the truth to workers so they can make an informed decision and help change the situation. One important part of that is avoiding working for companies that break laws and act unethically toward their employees, like DD has. Another step is publicly shaming them, which they deserve.

        DD is not the only VFX facility operating unethically and illegally. ILM and Pixar also got nailed. If you’re going to come to the defense of facility CEOs, you’ve got all your work ahead of you.

      • Thad Beier says:

        Hammerhead Productions has been around for 17 years. We had pretty good profit margins for almost all of those years. It’s true that we weren’t Digital Domain — we were a much smaller boutique, but making a business of visual effects can be done.

      • Scott Ross says:

        “A”….A Company is not a person, it has no personality or ethic divorced from the people that own/manage it. DD, even though the name stayed the same was indeed 3 (Three) different companies. The one started/owned and managed by me, the one owned and managed by John Textor and the one owned by the Chinese/Indians and managed by Ed Ulbrich.

      • FacilityGuy says:

        The assumption that facilities can’t turn a profit is a fallacy. While Scott has some great insights, he has been out of the industry for a while and has a slightly US-centric perspective.

        The UK and Canadian facilities are profitable for the most part. In Canada, this is demonstrated by facilities investing in growth. In the UK it’s a matter of public record – company accounts are available to download for a small fee from Companies House.

        Sure, tax incentives are a major factor in this but only in as much as the work is awarded to facilities operating in tax friendly regions. All rebates are passed to the movie studios, not the VFX vendors who are forced to pass it on via discount. The actual profit comes from real operations, not from the public purse.

        Is a tough business, but a viable and sustainable one for people who run it as a business and willing to adapt to a world of tax incentives. It’s made tougher by having to compete with some vendors who are subsidized by entities that don’t care about profit, e.g. Weta and Imageworks to name but two. A Disney-owned ILM is probably going to be another until the Disney Finance folk start digging into it.

        Don’t use DD as a measure of health for the industry, that has not been a well-run business for many years.

      • FacilityGuy, are you able to give any insight into which companies in specific are profitable? I’ve been under the impression that all the Canadian places are struggling too… if they’re not getting subsidies they’re either struggling or closing. It was a shame to see CORE go down, and it didn’t seem like Starz was doing so hot.

      • scottsquires says:

        “Sure, tax incentives are a major factor in this but only in as much as the work is awarded to facilities operating in tax friendly regions. All rebates are passed to the movie studios, not the VFX vendors who are forced to pass it on via discount. The actual profit comes from real operations, not from the public purse.”

        You do realize that government is funding your ability to get work and one of the reasons why the studios go to you is because of the tax incentives? In areas with tax incentives you can bid realistically for the work and get the project. Not a huge leap to make at least some profit. Much different story for those not located in areas with tax incentives. At those places they have to cut their bids (i.e. lower profits) to have any chance of winning a bid.

        How will you fare when your incentives go away or another place offers better incentives? How will your profits look then?

      • Ymir says:

        Let’s all be clear here . . . when a municipal, state, provincial, or federal gov’t doesn’t charge sales tax, income tax, business tax, labor tax, hotel tax, etc., that’s a tax incentive. When the same institution pays money back to the studio, that’s more than any taxes that would have been collected, that’s a kickback. Your tax dollars at work.

      • FacilityGuy says:

        Scott, I totally agree that incentives are essential to getting awarded a decent volume of work these days. Without incentives the work goes elsewhere. Very few of the big facilities are not chasing subsidies these days. Those few are unlikely to be big for long unless they adapt.

        My point was simply that facilities in regions with incentives are generally profitable if well run and that is nothing to do with the facility being subsidized other than getting the award in the first place. Running a VFX facility profitably is viable if you can get the work and generally that requires being able to offer clients a subsidy to be able to bid to a competitive level.

        Stephen, look to the new/growing facilities in Vancouver and you will find that most are profitable although some are perhaps just reducing losses of the parent facility.

      • Ymir says:

        Seriously? DD Vancouver fumbled the ball on ‘Jack the Giant Killer’, so that the film’s release was pushed back. Worked continued on the film down in Venice, rumored to be at DD’s expense. Maybe another reason why DD was bleeding money. Sony Imageworks Vancouver stumbled with ‘Oz, the Great and Powerful’ so that a significant portion of the work was pulled and given to a US facility, rather than push the release date. Even with that, Sony has been bringing back people in Culver City since November pushing 12/hr. 6-day weeks. Both films were examples of, to win the bid the work must be done in Vancouver. How can either scenario be profitable?

  45. Paul says:

    @KennyLogginsDangerZone

    Preposterous! Huge corporations have pulled worse shit on tons of people without having their asses covered

  46. P-Fi says:

    What’s the latest with the DD paycut fiasco. I’ve heard that most employees are not signing the paperwork. DD execs keep pushing out the deadline to sign the paycut. “No really, sign this week or else”, “I mean sign next week or else”. I don’t think they expected so many people not willing to take a pay cut, and willing to walk.

    Several other companies have all been quietly cherry picking some of the best and brightest from DD.

  47. jwhiteman says:

    To sum up this thread – whiney Americans with a jaw dropping sense of entitlement finally encountering the real world.

    • scottsquires says:

      Either that or quite a few in the vfx business have a low value of what they do and are willing to work for less and less pay or benefits. Studios plan to install tip jars at companies for those interested in continuing to fund the films they work on.

      • jwhiteman says:

        No – I think the problem is that quite a few in the vfx business have a higher expectation of their worth than those in the film business are willing to pay. The reality is – many ‘artists’ feel their work should be higher valued than it is. Well it’s not. Studios are quite happy to put out movies with mediocre effects – because – the public actually don’t care. Welcome to reality.

      • Scott Squires says:

        So should all the film crew members drop their rates too? As long as people are willing to under value themselves and work for less they make their own reality of low wages.

      • James David Hattin says:

        I can’t tell if you are jaded or underpaid/under appreciated. There are a lot of juniors who feel that they are worth far more than they probably are. I’ve heard stories of kids out of college jumping 10 dollars/hr a job, or trying to every few months. Maybe those are the people you are talking about.

        There are a lot of us who work in this industry and have for decades, and it’s not a sense of entitlement. We want steady work, acceptable pay for the market and some kind of health care. (I don’t speak for all of my generation) We truly enjoy the work. I think you are bitter, and I don’t know why.

      • jwhiteman says:

        @ James David Hattin
        Neither jaded nor underpaid/under appreciated. Just been seeing this shake-up coming for many years.
        Look at what’s happening in other industries and in the world in general – the expectation of steady work, acceptable pay for the market and some kind of health care is simply unrealistic. Statement of fact. Name one industry where this happens –
        Not bitter at all – love making movies – but anyone who has a teacher or nurse in their family knows we have it pretty cushy . . .

      • Scott Squires says:

        Not sure what fixed location has to do wi it. Films are shot all over the world as well and affected by incentives.

        Very few Vfx workers are on staff or permanent. Different than most jobs. Factor in the time not working, covering your own health insurance and the amount of unpaid overtime I have a hard time seeing how over paid you ink Vfx workers are. We’re stuck having to live in expensive cities. We have to keep up on high technology, we have to give up time with family, we have no bonuses, we have no discounts or 401ks.

        Yes, we’re paid more than some people but less than others. You can find any job and find a lower paying one. That doesnt make it right. Do you think a CEO who is paid $10 million a year is a lot smarter and works a lot harder than a Vfx worker? Do they work harder than those at McDonalds?

        I’m puzzled why some in this industry feel ashamed for having accomplished the creation of something that makes the studios a lot of money and for which they themselves have to do a lot of work and effort to get in and continue to do, think that they’re over paid. For those who think they’re over paid you’re welcome to donate as much as you like to charity. Not much point in trying to lower the bar for everyone.

    • jwhiteman says:

      In terms of film crew – I think location has a lot to do with it. If you’re filming in California you wouldn’t expect the gaffer work to be done in China. VFX work increasingly can be.

      Salaries are dynamic, they change – basic economic supply and demand. The number of VFX artists has exploded since the industry started – of course salaries are going to drop. They will drop exactly to the point at which people don’t want to enter the industry and then supply and demand will balance (for a bit).

      I’d make the case that some CEOs probably are a lot smarter and work harder than the average VFX worker. (And having worked at McDonalds I can tell you from experience it was a *lot* tougher than VFX work in every way.)

      My point is that a wages/remuneration shakedown has started which is inevitable in an industry which has changed so much in the last four decades. I’m not saying that in my opinion VFX artists should be paid less – I’m simply saying that imho the current market simply doesn’t support the salary rates we’ve grown used to, so salary rates will come down. Don’t kill the messenger !

      I don’t think that an American VFX union, court cases against international subsidies, or wishing things are different is going to change anything. It’s a film industry thing – not a VFX industry thing.

      • scottsquires says:

        There are at least 10x the number of film students graduating than visual effects artists. Yet film crew salaries are not dropping. There are many more lawyers graduating but I fail to see lawyer rates going down. Same as many other jobs.

        So why is that? It’s because skilled and experienced workers are worth more than new, inexperienced workers – except when talking to some visual effects people.

        It also doesn’t hurt that all the major studios are union and most of the experienced and skilled crew members (and directors, writers, etc) are union as well.

        Maybe everyone working in visual effects should simply cut their rates in half and forego health care and other ‘extravagances’ simply because some are not willing to stand up for it and place a value on it. Maybe we should be like eyore and simply shrug and give up.

      • jwhiteman says:

        Having been following the VFXSoldier blog for quite a while, I’m always intrigued what the phrase ‘stand up for it’ would actually mean in practice. VFXers refusing to work ? Well that certainly would hasten work being shuffled around the world, and most VFXers simply couldn’t afford to not work and not get a paycheck (however low).

        How about this . . .

        How about if the VFX Supes refused to work with foreign companies, or with the foreign subsidiaries of the companies they work for ? The Supes generally have a lot of clout to determine where the work goes – and while VFX companies and studios might not place high value on your average VFXer, they do kinda care about who the Supes are.

        As a top Supervisor, Scott, would you refuse to work with foreign companies or with a company who outsourced work abroad ?

      • vfx artist says:

        jwhiteman says:

        “My point is that a wages/remuneration shakedown has started which is inevitable in an industry which has changed so much in the last four decades. I’m not saying that in my opinion VFX artists should be paid less – I’m simply saying that imho the current market simply doesn’t support the salary rates we’ve grown used to, so salary rates will come down. Don’t kill the messenger !”

        The market doesn’t support the salaries because the market has been devalued by vfx vendors who don’t know how to value their business …mainly because its run by artist. Its a fact that vfx, as an industry, has been devalued for so long. As the price of tech and capital cost have coem down, which often defined the value of the industry, we never defined the value of the artist time, skill or experience, or the ability of a vendor to assemble a competent team and sustain them..

        As Bill Taylor put it in the VES union panel… studios saw vendors overhead as a profit potential.

        If an artist wants to work all night to the point that their salaried hourly is reduced to the single digits, or a vendor will mortgage the future of the company to work on something “cool”, thats a devaluing of the business. The debate of bringing on a union was to set minimums. This adds value to the business as does a trad org that defines business and ethic standards. Would some businesses shutter, yup, the ones that had no business being in business. But the fact that demand is still in this town, and if that means that we are reduced to just two shops, albeit ones that are union and profitable, so be it.

        Then we can talk about salaries being to high or too low. But right now we have too many artificial economies contaminating the data. (underemployment, misclassification, no OT, ghost hours, etc)

      • jwhiteman says:

        @ VFX Artist

        Totally agree. Especially the ‘contaminating the data’ bit. As long as the macho “I just pulled a 16 hour day even though I only get paid for 10 ain’t I great.” attitude persists, VFXers will always be undervalued by the studios and vfx companies – because they see *us* doing it ourselves . . .

  48. jwhiteman says:

    Digital VFX are relatively new members of the ‘film crew’. The market is settling out, supply/demand, all that stuff. Also – a lot of the film crew members I think you’re talking about work in geographically fixed jobs – where the film is filmed. I don’t think you can equate VFX artists (who can pretty much be anywhere with electricity) with gaffers and grips. My point is that I think VFX artists are generally *over-valuing* themselves. We’re pricing ourselves out of the market. I’m not condoning it – but except for a few tent-poles every year (kinda), the studio attitude is “good enough works”. Your local multiplex on any Friday night bears this out.

  49. B.Woody says:

    Typically I am anti-union. They often end up killing the companies the employees they represent work for. However, in this case the issue is not necessarily the post-house’s issue. The issue comes from the production company and how much they are willing to budget for post and for VFX. The budgets for these parts keeps going down while actor salaires go up plus the actors get residuals on top of base pay. The VFX artist gets their hourly rate and often works insane hours and when the work is done, they may get a thank-you and a nice branded coffe cup. Joy.

    I do not want to let the post houses get off scott free here. They of course will low ball to win work and then figure out how to make a profit off the backs of the workers. All too often new artist are brought in with “stars in their eyes” and they do a ton of grunt work for a pittance.

    I know the VFX community has avoided unionization for a long time but I think the time has finally come where the strength in numbers is needed to survive.

  50. Insider says:

    Studios, directors, producers do not care about VFX artists. There are some who refer to us as “VFX monkeys”. We are blue collar workers to them. It’s about the bottom line, we’re in a satellite industry that’s not to be confused with actually being a party of the film industry.

  51. Stryker3D says:

    If you are an employee of DD you have to come to terms that the DD we all grew and loved is no more. Once it was sold, everything changed. Galloping Horse has made their objectives clear. Ivy Zhong, vice chairman and managing director of Beijing Galloping Horse Film, has even said: The long-term goal will be to make Digital Domain a company that cultivates a stable of Asian customers, including leading filmmakers in China, India and Japan.

    Another page of the business plan, Zhong said, calls for using the American company studio’s resources for educational services that would include training programs for film professionals in China.

    Training would benefit the Chinese movie industry, said Sun, which has lagged behind Hollywood for some 20 years in the area of special visual technology.

    My suggestions. Agree to the pay cut, take the money, and look for an exit plan as you keep working at DD. If the company is free to make a pay cut, then you are free to cut back how hard you work. Take the money and don’t stress. If they fire you, guess what … you get unemployment, which is what they are trying to avoid with this pay cut letter / resignation non-sense. Some might worry their reputation might be tarnished if they start slacking. Screw that, DD’s reputation took a huge hit when they sent out that pay cut letter. You gotta fight fire with fire.

    Again, the Digital Domain we all know is no more, accept it, and start planning your next move. Only those that embrace change are successful, if you don’t, have fun training those that will take your job.

    • jaded_DD_artist says:

      I would say that if you are in the position to do so, and still have not yet signed – then DO NOT sign to the paycut. I understand many people have signed and have their reasons for doing so…but if you are in the position not to, and have other prospects on the horizon, then do what you can to force their hand. There are still folks here who have not signed and there has been radio-silence on the issue thus far. Perhaps layoffs are coming for non-signers…or perhaps DD will let those folks slide. Waiting to find out…

  52. jayman says:

    anybody going to pickup some cheap PC’s at the DD
    port st. lucie auction? I wonder if it will be going for
    pennies on the dollar?

  53. Imported Dry Blackthorn at your service says:

    Galloping Horse and Reliance did NOT do their due dillegence. Don’t be surprised that the new Owners want out…

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