Technicolor collapse highlights critical state of VFX industry

Some of the most famous names in VFX, including The Mill and MPC, are closing as the ongoing crisis in the VFX industry forces Technicolor into administration.

Despite a weekend spent trying to construct an eleventh hour deal to save the storied company and some of the most iconic brands in the industry, Technicolor has begun to wind up operations around the world. Different countries have different laws and procedures about this, so given its global nature it’s a complex picture, but the story is the same wherever you go: the company is closing down.

Sadly it looks like there won't be a 2025 edition...

That means we’re losing two of the most famous brands in the VFX industry: The Mill and MPC. Variety reports that around 100 employees of The Mill U.S. has already crafted an escape route and joined forces with Dream Machine FX to launch a new venture, Arc Creative. Undoubtedly there will be more moves as well; the companies might have failed but the creative teams inside them are some of the best in the business.

In London’s Soho community there is a profound sense of shock at all this. MPC’s film work is legendary and The Mill’s warren of Flame suites were at the heart of a creative flourishing that changed the face of advertising and shortform vfx. Just writing the words ‘Flame suites’ now is an exercise in nostalgia in itself though. The industry has moved on, the economics of producing vfx have gotten toxic, and making money even from doing cutting edge creative work has become a challenge that can defeat the best of them.

Technicolor has been in trouble for some time. It filed for chapter 15 bankruptcy protection in the US in 2020, and has undergone several restructures and changes in top management since to try and turn the situation around. The company ran out of road at the end of last week, though, as Group CEO, Caroline Parot, said in the following memo to staff yesterday. 

“As we have communicated over the past months, the Group has been experiencing difficulties linked to a variety of factors and has not been spared from external headwinds: the difficult operational situation resulting from post-covid recovery, a costly and complex separation from the previous group followed by the writers’ strike leading to a slowdown in customer orders causing severe cash flow pressures. 

"Today, the company must face reality. Due to inability to find new investors for the full Group, despite extensive efforts, Technicolor Group has filed for Court “recovery procedure” before the French Court of Justice to give a chance to enable to find solutions.

“In each country, the appropriate framework for orderly protection and way forward is currently being put in place to allow, when possible, to remain in business continuity.

"This decision was not taken lightly; every possible path to preserve our legacy and secure the future of our teams will be thoroughly explored to offer a chance to each of its activity to be pursued with new investors. 

“Technicolor is more than just a company, it is a community of talented, passionate, and creative individuals who have brought some of the most iconic visual experiences to life. The work we create together demonstrates our dedication and artistry and defines Technicolor.

“As we move forward, our priority is to support you through this transition. Given the complexities of labor laws and regulations across the different countries in which we operate, this process will be conducted on a country-by-country basis, ensuring compliance with local frameworks, and providing the necessary support for each of you. 

“We recognize that this is an incredibly difficult moment, and we are here to support you in any way we can.

“In each of your countries, you will receive a dedicated email in relation to your situation in due time.”

In the UK, the majority of the company’s circa 440 employees have been made redundant, and Nick Holloway and David Pike of Interpath Advisory have been appointed as joint administrators. The company asks that any parties interested in acquiring assets of the UK business, including specifically The Mill brand, should contact them. 

But, in total the company employs 10,000 people around the world and if all those jobs go that is a huge blow for the VFX industry. And, of course, there are several huge projects currently underway in the facilities such as the latest Mission Impossible outing, not to mention the live action remake of Lilo & Stitch, that suddenly and rather urgently need to find new homes. They will just be very different ones from those that the industry has been used to for so long.

tl;dr

• Technicolor has entered administration, leading to the closure of iconic VFX brands The Mill and MPC, with around 100 employees from The Mill U.S. already forming a new venture, Arc Creative, in collaboration with Dream Machine FX.
• The company has been struggling for some time, filing for Chapter 15 bankruptcy protection in 2020 and facing numerous operational challenges exacerbated by the post-COVID recovery and a slowdown in customer orders linked to recent industry strikes.
• The UK has seen the majority of its 440 employees made redundant, while the global workforce of 10,000 faces uncertainty, impacting ongoing projects like the latest Mission Impossible film and the live-action remake of Lilo & Stitch.
• Technicolor's leadership is exploring various recovery options and offering support to employees as they navigate the complex labor regulations in different countries during this transition.