The VFX community is abuzz with the sudden fall of Digital Domain stock prices and the revelation that they are in massive debt.
We asked ourselves what this could mean for Tembo, the feature film Digital Domain had slotted to develop in it’s new Florida studio? The Institute they’re developing? While Digital Domain’s plans to open a school remain unchanged, their studio is definitely shutting right down.
And while John Textor may have succeeded in repressing his Internet naysayers, he’ll have a lot of time to reflect on his experiences. Since he quit his job today.
If there’s an upside here, it’s that their Vancouver location will continue on as before.
EDIT: They’re shutting down the studio now, and they have called in the police. Just in case.
Full press release below.
Digital Domain Media Group Initiates Strategic Realignment
Company Begins Cessation of Florida Studio Operations
PORT ST. LUCIE, Fla.—September 7, 2012— Digital Domain Media Group, Inc. (NYSE: DDMG)
today announced that it has initiated a strategic realignment that will enable it to focus its resources
on its core business, Digital Domain Productions, Inc., a company focused on creating digital
visual effects, CG animation and digital production for the entertainment and advertising industries.
As a key part of this strategic realignment, DDMG has begun the cessation of its Port St. Lucie
operations by reducing virtually its entire Port St. Lucie workforce, retaining approximately 20
employees who will remain as part of the wind-down.
DDMG’s studios in California and Vancouver intend to continue to operate without interruption,
as will the Digital Domain Institute, based in West Palm Beach, Florida. Long-time Digital Domain
executive Ed Ulbrich has been promoted to Chief Executive Officer of Digital Domain Productions.
Digital Domain Productions is working closely with its clients, vendors and other critical
constituencies throughout this process.
DDMG is implementing this important operational change and will continue to evaluate various
restructuring alternatives, as previously disclosed, as part of its effort to reduce its overhead and
restructure its long-term debt.
As previously announced, DDMG is continuing to work with the holders of its senior secured
convertible notes, each of whom has agreed to forbear temporarily from exercising its remedies
under such senior notes until such time as it elects to withdraw such forbearance on not less than
48 hours’ advance notice to DDMG. An inability by DDMG to quickly access additional sources
of liquidity to fund its current operating cash needs would materially adversely affect its financial
condition and would require it to seek relief or protection from its creditors.
John C. Textor has resigned, effective immediately, from his positions as Chief Executive Officer
and Chairman of the Board of Directors of DDMG, as a member of the Board of Directors of
DDMG, and from all positions as an officer and director with all subsidiaries of DDMG.
Safe Harbor Statement
Certain statements in this press release constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements include comments about the Company’s
plans, prospects, strategies and future performance. They are made on the basis of our management’s
current expectations and beliefs, as well as a number of assumptions regarding future events and business
performance as of the time the statements are made. Such forward-looking statements are subject to known
and unknown risks, uncertainties, assumptions and other important factors, many of which are outside
the Company’s control. These could cause actual results to differ materially from the results expressed or
implied in the forward-looking statements.
Such differences may result from actions taken by the Company, as well as from developments beyond the
Company’s control, including, but not limited to: price volatility of the Company’s common stock; changes
in domestic and global economic conditions, competitive conditions and consumer preferences; our
dependence on a limited number of large projects each year, and the timing of revenue flows from those
projects; developments in the status of strategic initiatives taken by the Company; audience acceptance
of feature films we may co-produce; and rapid technological developments, including new forms of
Further information on these and other factors and risks that could affect our business is included in filings
we make with the Securities and Exchange Commission from time to time, including under the heading “Risk
Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012 and our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2012. These documents are available on the SEC
Filings subsection of the Investors section of the Company’s website at: http://www.ddmg.co.
Information on our website is not part of this press release. All information provided in this press release
is as of September 7, 2012, and the Company undertakes no obligation to update publicly the information
contained in this press release, or any forward-looking statements, to reflect new information, events or
circumstances, or to reflect the occurrence of unanticipated events.
Jennifer E. Mercer, Van Meter Consultants for Digital Domain, email@example.com,
Julie Miller, Director, Communications & Marketing, Digital Domain, firstname.lastname@example.org, 310-259.5834
UPDATE: JON TEXTOR’S RESIGNATION LETTER
To the Directors of Digital Domain Media Group:
I hereby resign as a director of Digital Domain Media Group, Inc. (the “Company”) effective as of the close of business on September 6, 2012.
As you are aware, I am in profound disagreement with the decision to close our animation and visual effects studio in the wonderful community of Port St. Lucie, Florida. The people of Florida welcomed us with open arms and we certainly owed them greater consideration. We were able to hire and train local residents and have them mentored by the very best of our industry. Our incredibly talented artists and filmmakers were building something truly special in Port St. Lucie, not just our favorite first film, The Legend of Tembo, but also our first home, Tradition Studios. I am deeply saddened and heartbroken by this decision.
I believe that each of you as directors, and specifically those on the Strategic Alternatives Committee, have tried to do your very best to deal with the unfortunate consequences of our life as a public company. I also know that, in making your decision, you relied on the counsel of highly qualified advisors and legal representatives. That said, I think the outcome was not only unwise, but also without compassion. While I understand and support the effort to streamline costs, I believe this to be the wrong path. It is never a bad time to reconsider a bad decision. This can be reversed immediately.
Although I will no longer be a member of the Board, I intend to stay actively involved as a shareholder of the Company, and a believer in Florida. This decision will hopefully give me greater flexibility to independently consider other strategic alternatives for the Company, the Port St. Lucie studio and the people affected.
God bless you and thank you for your service.
/s/ John C. Textor
I guess even the CEO’s model of free student labor was not enough to save his studio. Lot’s of people from Ontario went to work there. I’m sure they are pretty stressed out.
Yes. About 300 people lost their jobs. Textor himself didn’t want to shut down the studio, but he’s resigned so it’s a done deal.
I’ve seen a lot of places popping up looking to get some of the folks who have lost their jobs at DD, hopefully that’ll help. I can’t even fathom how stressful it must be to have relocated all the way down there just to have the rug pulled out from under you.