The main reason for the collapse of Digital Domain Media Group (DDMG) – or at least the trigger on the hand grenade that blew up last year – was Wall Street, according to its former CEO Textor. ...
His view of what happened may be coming from someone wanting to re-write his place in history, but as he pointed out: public policy is being formulated right now based on what people think happened. At the very least, he feels the industry will not improve if it does not examine what he thinks DDMG did wrong and who boxed them into a “death spiral” ...
* Textor today points out that he never thought that abandoning the VFX ‘services industry’ was a good idea. While it may have been necessary to change, he says he would prefer to see a change that had the industry paid a “premium for its artistry” and would have preferred “the industry to play out such that artists were rewarded more for their creativity.”
* Textor claims the key problem was not the studios. He believes the industry is broken and that it needs to change; he cannot believe that the industry is so polite in its negotiations and discussion. Textor seemed as tough he was particularly surprised at the lack of anger expressed to Ang Lee over not acknowledging the VFX contribution at the Oscars. But issues with the studios, Textor feels, are not the single thing that broke DDMG. “There are problems…and we have discussed those, but even with those the bankruptcy did not need to happen.” ...
* Textor: “The reason we failed is that we had a bank in the middle of 2011, and they went bankrupt, a bank called Lydian. In the middle of 2011 they started seeking a buyer of their [Digital Domain] notes (loans) they were owed a certain amount of money by us, and they also owned stock options which had become quite valuable and they viewed selling their loan and ownership position in Digital Domain as a way to raise emergency cash. They sold their position to a group lead by Florida power and light, an investment fund, and a group called Comvest, opportunistic investors, they bought this as a discount, and not by our choice, our bank went bankrupt, they sold their position and now we have a hedge fund as a lender.”
So, per Mr. Textor, Digital Domain was the victim of unhappy circumstance. The company would have survived (and prospered?) if only some bad outside occurrences hadn't happened.
But then there is this from a previous DD Chief Executive Officer.
Mr. Textor once said that while Scott Ross may know a great deal about the VFX industry, that he, John Textor, knew a great deal about high finance.
Given the outcome… it sure looks like John Textor didn’t know much about either.
I wonder about the Tenor Capital deal… they lent DDMG [Digital Domain] $35M… I wonder how much they received from BK? I believe that DD went for $30.2M, so that leaves $4.8M plus attorneys fees that they needed to recoup just to break even…. did they recoup that and more? Maybe Tenor Capital looked at DDMG’s balance sheet and felt BK was the only option to recoup any of their money?
So, it was Wall Street that tanked DDMG?
It wasn’t bad management decisions? It wasn’t the Paradise Lost/Enders Game deals? It wasn’t opening up an animation studio in FLA and funding outrageous buildings/furniture and fixtures? It wasn’t Mr. Textor's and upper management's considerable salaries and perks? It wasn’t getting into businesses that had no revenue streams yet had considerable costs and overhead? It wasn’t bad business decisions on Mr Textor’s part to enter into financial deals that were onerous? It wasn’t buying out Mr. Bay and Mr. Plumer’s contracts? It wasn’t the decision by the courts that Mr. Call was awarded the $2M settlement for unlawful discharge by Mr. Textor? No….
It was beauty that killed the beast!
-- Scott Ross
John Kennedy and Count Galeazzo Ciano (Benito Mussolini's foreign minister and son-in-law) separately observed: "Victory has a thousand fathers, but defeat is an orphan."
What we've got above is defeat, and a parent who's saying:
"Hey now! That ain't MY kid! It's somebody else's! ANYBODY else's!"
I guess people will have to make up their own minds. But the one indisputable fact is that Digital Domain did indeed go belly up.
Posts
2 comments:
I've never seen such a pack of blundering idiocy and complete untruths, not to mention scam artist mumbo jumbo by a single person since Bernie Madoff.
What goes around comes around, and truth has already spoken on textor's sad and shameful place in both wall street and hollywood history. It ain't a pretty site. He's best relegated to the footnote of a footnote.
Four decades ago, a college prof said to me: "Hulett, based on your RESULTS, how are you doing?"
Somewhere in there, with help from the professor, I figured out that the main yardstick on how we're doing comes from outcomes and results.
Because there isn't much else to base it on.
Post a Comment