More on the Sony Imageworks/SPA partial sale.

Articles have surfaced that Sony Imageworks and SPA are going up for sale. Or at least a portion of them. This obviously is a result of a shortage of cash. Surf's Up and Open Season didn't do as well financially as expected. Their for-hire work on various films have slowed to a trickle. The company needs money to stay afloat. Layoffs have already happened and you can only assume more will take place unless something happens quick. Two of their CG feature films are still in development, but a ways off and realistically, they may never see the light of day. The moral at this studio must be low.

I know of one group that is seriously contemplating sending money their way. Whether it will surface or not depends on a lot of factors. Mostly it depends on what they would get out of it. Let's assume that it does happen and this company comes in with a wad of cash, what happens then? Will the company continue as it has been? Or will new management take over and clean house and streamline the company? The latter choice would suggest more layoffs as they try to start somewhat fresh. The first choice would suggest continued problems.

If I were in charge of several hundred million dollars and had the option of either buying part of Sony Imageworks/SPA or starting a brand new animation studio... It would be a hard decision. On one hand you can start completely fresh without the baggage. On the other, you are able to get into a company with decent infrastructure and more importantly, a well known name. My choice would all come down to what where in the details of the contract. I have a feeling that Sony would want a high dollar figure for not a (relatively speaking) lot in return and make it very unattractive.

Sony Pondering Sale

Click on the title for a link to a story that appeared in the New York Times on Halloween. In short, it says that not only Sony Imageworks, but SPA are possibly up for a partial sale.

I'm not sure what to make of this. If you can believe what is written, I guess Sony is looking for some financial relief. For years, Imageworks has been having a more and more difficult time keeping afloat with the under bidding going on the for-hire effects jobs. And with SPA's films not performing as high as hoped, I guess there is some consideration being given to selling portions of the companies.

I don't really have any comments other than it doesn't really surprise me. From what little I've heard over the last year, these guys are hurting. They are looking for ways to cut costs (India and New Mexico) and selling portions off is a quick way to bring in some money.

New business models? Part 1.

It appears that LA Times published an article about the Sony Imageworks relocation. Or partial relocation, whatever the case may be. It provides a little more information regarding where the studio would go and how many people would end up there initially. Anyone that comes here regularly knows that I hate outsourcing. When a US based business ships their stuff overseas to get it done on the cheap, it really ruffles my feathers. However, just for the record, I'm okay with this New Mexico move.

It doesn't thrill me that work is moving out of LA, but, I would much rather see it move somewhere else in the States than out of the country. Sorry my Canadian brothers. I'm okay with your homebrew productions, that's cool, but that is where I draw the line (not that I can't blame you for taking advantage of the situation).

So, how long until California starts offering tax incentives to keep productions here? It will probably not happen for a while, but if they wish to keep one of the biggest industries in Southern California producing income for the area, they are going to have to do something. Let's face it, the cost of doing work here is expensive. The only reason to keep it (feature animation production) locally is because of the talent pool (in numbers and experience) exceeds every other part of the world (extreme bias here) except for maybe San Francisco. And even that is going to shift if something isn't done.

Part 2 will be focused on "that new studio" that I keep barking about. I'm editing and re-editing it in order to say something without saying anything.

Imageworks toying with moving?

First off, everyone here knows about Sony flirting with the idea of opening shop in New Mexico. The tax incentives make it attractive to the company and since the studio seems to be hemorrhaging money they are thinking of possible solutions. Some of the comments in my last post seem to suggest "if you build it, they will come". Seriously though, does that always work? If Sony opens a studio in NM, will many people really pack up their lives and move to a one pony town? I realize the cost of living is lower there (and you can be assured your income will drop too), but is it worth the gamble? If Sony goes through with it, I guess we will find out.

The above isn't really news. Now that I think about it, neither is this. However, I've heard that Sony is also flirting with a satellite NorCal studio. I'm not sure what they would do there, maybe just a way to steal talent local to the area. This btw, is unrelated to another move to the San Francisco area - the Zemeckis thing.

Meanwhile, back in Culver City, I've been told that they are down to a pretty small crew working on a couple of shows. If you believe the people I talked to, they don't have much lined up right now. Surf's Up is done, their next SPA film is a ways off and they don't have many pure Imageworks fx jobs.

I don't know what any of this means or how true any of it is. Perhaps I am just spreading rumors. Whatever the case, I'd like to see Imageworks and SPA succeed. I enjoyed Open Season and Surf's Up looks pretty good too.