UK VFX Financial Statements

Christmas came a little late for this blog. I didn’t know financial statements for companies were publicly available which can be purchased here:

Here were a few that I pulled of some of the big VFX companies in the UK:

Double Negative
Framestore – (Framestore Features Limited) Updated, see below.

As I was quoted in a recent Associated Press article, I’ve debated with many that subsidies do not create a sustainable VFX industry. If the financial statements above are true, then it’s pretty clear that UK VFX industry is not sustainable at all even with massive subsidies that need to increase every few years.

For example Double Negative is losing about $US 8 million a year which is probably just as bad if not worse than CA VFX companies that don’t have subsidies and also have to pay their workers overtime.

If any of you decide to purchase any other statements please email them to me. It’s important info for our legal effort on subsidies.


Steve Hulett:

If you don’t have a viable business model, a government handout will not, long-term, save you. And a viable business model is something other than performing sub-contract work for big entertainment conglomerates.

[Update 2]

Some have pointed out that FrameStore Limited is the correct financial statement to look at which I’ve added. The numbers are in the 1000s so make sure you multiply accordingly.

The FrameStore Limited

Page 12 states that in 2011 there were 527 total employees paid total wages and salaries of $US 38,396,326. In 2012 there were a total of 603 employees paid total wages and salaries of $US 45,870,749.

Given that we can assume that the average wage for Framestore employees was $US 72,858 in 2011 and $76,070 in 2012.

I’d argue the average wage at many VFX companies in CA are around the same. Unfortunately the costs of living in the UK are some of the highest in the world and there is no overtime. My point is that I’m not seeing evidence that wages are significantly lower than CA as many have argued.

Soldier On.

43 Responses to UK VFX Financial Statements

  1. Andres says:

    Rhythm went went under because of a $5 Million shortage. D-Neg had an $8 Millon loss? They’ve gotta be moving some funds around to be staying afloat this long. Very curious.

    Ofcouse Prime Focus has been in the Red for years, so this might not be news afterall.

    Then again, what the hell do I know about blance sheets.

    • Alex Lim says:

      Was not RH about 20 mil at the time it collapsed? I may have been mistaken. However, it would not be such a surprise if UK companies are for now, able to withstand more debt-load because subsidies will lure some amount of work there in order for them to attempt to balance funds from new work. It does become quite dangerous, however.

      RH was in a perfect storm when all projects went into haitus, delayed, or cut, and mostly at RH’s own expenses. RH’s situations were probably more complex than most of us will ever realize.

      Just understand that when it collapse, those of us who are on the projects are often the first group of people to subsidize the film. So for the sake of all my colleagues and friends in the vfx industry around the world, I only hope this downward spiral will reverse soon so that it will be about creativity and innovation rather than be on a borrowed time.

    • LAskyline says:

      R&H had a five million hole that they couldn’t fill, but they owed much much more.

  2. anon says:

    theyre in profit. good at playing numbers to pay zero tax. There’s many holdings financial backers or parent companies relating to them. I maybe wrong. Some could do some financial forensics.

  3. Chris Simmons says:

    I think DNeg may be playing with their numbers after looking at MPCs. They are reporting what equates to $16mil losses tow years in a row on these reports. Who would lend them money to stay in business unless they have their own film underway and will have some way to make it back down the road.

  4. VFX Soldier says:

    For those of you saying these numbers are being played, let’s not be silly here. I know many readers want to *believe* UK facilities are making great profits but the evidence doesn’t support that.

    These reports are required by law. They are audited by very big auditing firms for the purposes of reporting to actual owners/members of the company:

    Click to access ukpga_20060046_en.pdf

    If any of you are calling this bullshit then you better have evidence otherwise. Don’t give me the “I saw Alex Hope driving a supercar” excuse.

    • Jose Mosca says:

      Check guidedraw limited, last page of framestore docs

    • vfxmafia says:

      I read a recent article (on the tweet page on VFX soldier) that Sony executive was quoted as saying…..”Sony is actually building the $100 million they get a year in subsidies and “Building” it into their business model.” They actually cut back the number of movies on their calender year because it was easier to take the subsidy money rather than making an and extra movie for the year……

      seems like the studios are getting good at taking subsidies and shaving tax loop holes ….rather than making good movies.

      Now there are consulting firms that show film companies how to get subsidies and dodge taxes for people that want to fund state subsidies…..(off coarse they take a nice % fee from the total of the subsidies…)

      So there are rich people and companies that donate money to get a tax break. There are consulting firms that profit from a % to give away the money. They are film companies take the subsidy money who make less movies and take more free money….and everyone makes more money except …the governments who get jilted of tax loop holes that donate money….the governments who give away subsidy money and don’t get a full and permenant return on their money……and lastly….us the VFX workers who chase our living……..

      If you follow the money….subsidies are a giant “ponzi scheme” …for the wealthy and companies dodging taxes….or the companies taking the money…….

      I have to ask myself why i pay taxes at all…..because the big companies are getting away with the worst money lending scheme in modern history.

  5. Joe VFX says:

    The numbers in the Framestore one had me wholly confused (£36,000 total income?) until I realized that I don’t think it’s for the vfx company. It’s for “Framestore Features”, which is probably their co-production arm or something like that.

    • VFX Soldier says:

      The Framestore financial statement number are based in 1000s. So its actually supposed to be £36,000,000.

      Sorry I didn’t clarify that 🙂

      • X says:

        Framestore Features is not the VFX company, Framestore Limited is.

      • X says:

        Also MPC’s numbers are in the 1000s, Framestore Features are not: “The lost for the year is £51 780”

      • VFX Soldier says:

        okay I’ve updated the post with framestore limited which has numbers based in 1000s

      • LSP says:

        My understanding is that Framestore Features was the separate company created for The Tale of Despereaux many years ago. I presume it’s being kept alive in case Framestore decides to pursue any other CG features in the future, which staff have been told would be a possibility if the “right project” came up. This would explain the relatively small figures in its statement compared to those of Framestore Limited, which is where the main VFX and commercials business takes place.

      • Joe VFX says:

        For the record, before I originally posted I had considered that the Framestore Features numbers might have a 1000 multiplier, but that would have meant that they were £50,000,000 in the hole last year (which would be beyond shocking even for vfx), and owed nearly 3 billion dollars in liabilities (see page 7). 🙂 It was pretty clear that those numbers couldn’t be for a vfx company with or without a multiplier.

  6. Burbank vs. Los Angeles for Example says:

    For years Burbank has offered businesses no business tax and no gross sales receipt tax for those who locate in the city.

    Companies like Warner Bros and Disney pay NO taxes to the city! Who subsidizes this enormous loss of revenue? The residents of course. You can, however, argue the economic gains by the residual business activity created by the tax break outweighs the break itself. Is it a subsidy? No, not in the strictest sense, but for years “Hollywood” (aka City of LA) has lost significant revenue to Burbank as entertainment companies fled only a couple of miles north.

    My point is that there are numerous ways to attract business, and if direct subsidies are outlawed by trade sanctions, other market incentives like those instituted by Burbank in other locales will continue to drive business from LA, and California. If people are not going to get 50% rebates from Canada or the UK because of a CVD do you think they will ignore smaller savings elsewhere just because the bigger bounties have dried up? No way.

    Forcing companies to come back to Hollywood with trade embargoes alone won’t work in a fractured and fragmented industry like entertainment.

    Here’s my take. The VFX Company and reliance on them is largely the problem. This needs to change. They don’t have spines, don’t have relationships with the Hollywood elite, don’t respect their employees and are poor business people in general and their model is inherently unstable.

    If Artists were employed directly by the production and VFX companies became largely obsolete I think the Artists would be in a better place. As Scott Squires mentioned in his tweet, Artists hired by third parties like VFX companies are faceless to a studio and there is no emotional tie to the filmmaker. No chance for a Stockholm Syndrome to occur (lol). Artists are often required not to interface or even smile at a client who is at the facility. They are behind the curtain.

    Studio VFX Producers and administrators are often lame brain and love putting the artist management onto a third party VFX House and beating them down like a company hiring prisoners to maintain a call center. There are probably 30 movies that need Tier One ILM type pipelines but a good vfx producer should be able to do most movies working with small, lean lower tier companies and independent artists. That is where the industry needs to go. Lower CAP EX, lower overhead, less admin and less staff IT people sucking the life out of the artist. Empower the Artist, not a VFX Company.

  7. Burbank vs. Los Angeles for Example says:

    Oh, one more thing. Happy New Year!

  8. Idiot says:

    So you think the company finance are directly related to subsidies. Have you looked at dd finances 1993-2006 when it was sold. They. We’re constantly in the whole just ask yor buddy Scott Ross .

    As I can see MPC is doing pretty well with profit and divedend payout back to technicolor .

    • VFX Soldier says:

      No what I am saying is that it is an illusion to think subsidies create a sustainable industry.

      Subsidies create a bubble that needs will permanently need government assistant and cost more and more every few years.

      Once the subsidies stop, the bubble collapses.


      • the end says:

        Bubbles? DD’s feature Vfx business has made a loss in nearly every single year of its existence – that’s decades – and never returned a penny of the tens of millions of dollars that the founding investors put in. And then sank it all that debt in the bankruptcy. Talk about screwing the industry’s business model. Talk about Ponzi schemes….

      • VFX Soldier says:

        Again, you keep getting the premise of my argument wrong:

        Subsidies do not create a sustainable VFX industry.

        Do you agree or disagree? If you disagree then explain why UK facilities that benefits from subsidies have low margins.

        That’s isn’t to say they are not getting an incredible amount of work. Their revenues have exploded as subsidy hungry US studios have sent them more work to attain the subsidy. However it’s the US studios that benefit mostly.


      • meinvan says:

        absolutely agree with “the end”,

        how on earth are you making this into a subsidies thing. doesnt it become crystal clear from this alone that subsidies is not the studio killer you say it to be.

        decades of bad buisness practices, and over saturation of a geographic location seems a lot more likely… you say about the subsidies, what goes up most come back down…this is what is happening in LA. Decades of artists flocking there, as it had to be back in the days of getting your dailies reels processed at the lab. but now its just not balanced at all, and there is no real reason to being in LA anymore (specially for VFX).

        or am i missing some huge point your trying to make by bashing how unsuccessful the UK companies are on paper.

      • the end says:

        There is no sustainable Vfx industry under the current model; the behaviour of the major US facilities – the LA ones in particular – is just as much to blame for this as subsidies. You’re living in a bubble that blew up in the 90s and has been collapsing for 10 years – all subsidies are doing is hastening the end. Your campaign is pointless.

      • VFX Soldier says:

        One of the best ways to force a change in the business model is taking subsidies away from US studios.


      • VFX Soldier says:

        “I absolutely support (your efforts) standing up for workers right, proper pay, normal hours and the respect that we are not just button pushers. But if you get into bed with these kind of companies you need to be prepared to play by there rules.”

        You want me to stand up to the studios but play by their rules at the same time? A Chicken hawk would be jealous of you!

        I don’t play by their rules, I play by mine. Buckle up and enjoy the ride.

      • meinvan says:


        by your argument it would mean that the LA industry isnt sustainable either as their profit margins are just as low. Hence the argument of that the work leaving LA needs to come back because LA has a sustainable buisness model is not valid either?

        The “bubble” manifests itself in different forms. I agree, that subsidies alone cant build a budding industry, but it most certainly can be start. The amount of skilled artist in vancouver has grown exponentially, large part due to subsidies, and that alone is not enough to sustain the industry here, i get that. But you forget is that industries grow over time, and with more artist here, more studios, better immigration and labor laws….and knowing how many people up here like it enough to want to become permanent residents……I call that building an industry.

        And even if the subsidies stop, yes some of the shops will close up, but certainly not all….and hopefully by then there is a budding bc vfx industry, not controlled by the mega corps of the US of A.

        So yes, in the long term, I strongly believe subsidies can (if done right) help build up an industry that can then stand straight on its own two feet, without an government handouts.

        and before anybody start bashing on me, i just want to add that handing out money to the US film studios, is probably not the best way of doing this….but clearly in the world we live in where it all revolves around share holder profits, it seems like a good way to lure the work this way……its sad but its true.

        If these companies wernt as ruthless at what they do, they wouldnt exist, and all the money going into movies wouldnt exist either.
        I absolutely support (your efforts) standing up for workers right, proper pay, normal hours and the respect that we are not just button pushers. But if you get into bed with these kind of companies you need to be prepared to play by there rules.

      • minoton says:

        Meinvan, once the subsidies stop, Vancouver becomes the next L.A. Because once the subsidies go, so does the work. Those artists are not as permanent as you might like to think. They are not there for Vancouver, they are there for the work. And all that talent is talent brought in from elsewhere, and will go elsewhere when the subsidies are greater someplace else. Artists today are the digital version of the Jews in Exodus, wandering the global Sinai chasing subsidized manna to stay alive.

      • Jackadullboy says:

        That… is extreme 😀 Happy New Year folks. May it be a year filled with progress and good analogies!

      • vfxmafia says:

        @ meinvan

        I happen to agree with you on several points…(something i wouldn’t have done 6 months ago.)

        You are correct that subsidies are just an economic tool that all countries use. Whether they are good or bad depends if they are directed at one economy or another. Mostly they become over used and an economy can be dependant on them….(as Dan and Dave have pointed out)

        I also think your are correct that BC soon will be able to sustain a VFX industry up here…especially in Vancouver. Enough artists are flocking up here especially… the next 3 years. And cinesync work is becoming normal and efficient.

        The rent is reasonable and gastown is a blast. Its too soon to tell about the healthcare….but im sure i will comment on it in the next 6 months.

      • LAskyline says:

        “Subsidies do not create a sustainable VFX industry.

        Do you agree or disagree? If you disagree then explain why UK facilities that benefits from subsidies have low margins. ”

        How about this then: The major LA facilities have never made a dime, they have always lost money from the get go.

        Do you agree or disagree? If you disagree, then explain how it works and please show evidence of these companies making a profit at any point in their history. Please explain how they will ever become viable business, with or without subsidies.

  9. X says:

    Can you get Framestore Limited (01972029) statements?

  10. hector says:

    Happy and blessed 2014 – keep up the good fight!

  11. whookam says:

    Without getting too much into the whole ‘are subsidies good or bad’ debate, I don’t think looking at a companies yearly accounts is a good way of proving anything.

    First of all, a companies accounts in the UK can have very little resemblance to the actual profit/loss of the organisation as a whole for the simple reason that it is sometimes preferable for a company to look like it is making a loss when it isn’t and sometimes for it look like its making profit when it’s actually making a loss. There are totally legal methods of distributing profits to avoid paying corporation tax as the UK has seen with companies such as Starbucks and Amazon. Do we think these companies are not making any money just because the accounts submitted to Company House suggest this?

    Without doing a massive paper trail, its impossible to tell the actual financial state of these companies from these documents. You can’t tell who the creditors are or who owes who what and almost certainly there are numerous other companies that are being used to shift money around. Don’t put too much emphasis on these numbers.

    On a personal note. Having worked for two of these companies for a number of years, neither ‘feel’ like a company particularly fighting for survival. I’ve been there, trust me, you can tell when your employers are in trouble. Looking at the amount the directors are getting paid is quite a good indicator of the actual success.

    It should also be noted that MPC’s accounts seem to be taking into consideration the Commercials department which I should imagine would more than subsidise any minor loss that the film department could be making. The versioning and grading departments are particularly lucrative. To compare this with Dneg or Framestore is not comparing like-for-like.

    • John Crane says:

      I believe MPC film actually bring in more money overal than comercials. Not sure if that is due to good film performance or bad comercial performance though.

      • subsidise this! says:

        Thought it was common knowledge that the film division is pretty much a loss leader. The peanuts from VFX work is a juicy titbit to sell film and tape stock duplication for the parent technicolor. Similar dal with Method/Deluxe. Sorry guys, I know everyone thinks VFX is super clever and all but it has always been a non-earning entity for any corporation compared to the massive profits of physical medium distribution and manufacture or the creative work of producing studios.

  12. PolarisSoup says:

    Like many company based or operating in the UK (Starbucks comes to mind as a good example) reducing your profit and even posting a loss is common practice. Simply put if you make a profit you have to pay corporate tax, if you don’t you don’t. This is especially true for privately held companies where making a loss does not incur any shareholder anxiety.

  13. subsidise this! says:


    Try doing that as a sole trader or small firm. The tax revenue service will compulsary repatriate your home or throw you in Jail. So begs the question now, will any new firms ever organically grow again in Soho now the few big studios have carte blanche to behave as they want, pay next to no tax, prop up profits from tax payer derived sources, probably provide services from this at loss to take work from small rising firms. All sorts of things could be going on in this kind of pre-selected oligarchy of corporate welfare supremos.

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