Effects Houses Enter Cutthroat Competition

Like a lot of people in the film business, Ellen Somers spends time every day sifting through the trades, looking for the next job. But as head of production at Boss Film Studios, one of the leading visual effects houses, Somers’ mission is searching out monster movies and sci-fi epics, action spectaculars and any project needing a big dose of movie magic that might keep the more than 125 Boss employees and their high-tech equipment humming.

The business of nailing a visual effects contract on feature films is getting harder – and riskier. Despite a profusion of visual-effects stunners in studio pipelines, the crowded field of f/x houses may have outstripped demand.

“I wouldn’t want to be starting a visual effects business now,” says Carl Rosendahl, head of Pacific Data Images, an f/x house that recently was forced to close down one of its two shops when it lost the contract for Carolco’s “Cutthroat Island.”

“You don’t do these jobs on a high margin,” Rosendahl says. “The big cool jobs, everyone’s competing for,” and consequently, there isn’t much profit.

Laura Buff, a visual effects producer who worked at George Lucas’ Industrial Light & Magic for five years, says, “A lot of the smaller companies exist by having very competitive prices. They go from job to job with no real profit and no financial reserves.”

ILM gets the lion’s share of the big, feature film effects contracts. The 450-500 employees of the 13-Oscar-winning house are working on about 180 Silicon Graphics workstations – each of which can cost anywhere from $5,000 to $30,000, not counting the pricey software that goes into them.

ILM is now going full steam ahead on “Village of the Damned,” “Casper,” “Congo,” “The Indian in the Cupboard,” “Jumanji,” “Dragonheart” and “Mission: Impossible.” The smaller houses, by contrast, have to scramble for jobs.

“You need to have both commercials and film,” says PDI’s Rosendahl, who notes the cyclical nature of the business. “The day after summer releases are out, there’s no more work.”

Mark Galvin, exec producer at Dreamquest, which is now engaged on Tony Scott’s “Crimson Tide” for Disney, says his 125-person company has spent as much as $25,000 putting together a bid on a project – and still lost the contract.

The cutthroat nature of the business was brought home to Rosendahl when the Sunnyvale, Calif.-based PDI was forced to shut down its Hollywood shop in December after losing the big contract for “Cutthroat Island.” The incident provides a textbook example of the pitfalls of the f/x business today and what Boss Film Studios boss Richard Edlund refers to as “the agony of bidding, redesign and rethink.”

Effective origins

Rosendahl founded PDI in 1980 with the novel idea of using computer-generated graphics for TV station IDs. After thriving on commercial work, in 1989 Rosendahl took a third of PDI’s 60 employees to Hollywood to enter the feature arena.

PDI accomplished the morphing effects for Michael Jackson’s “Black or White” musicvideo and went on to create cutting-edge sequences for the films “Toys” and “Angels in the Outfield” and eventually, a total of 70 features.

Last year, PDI bid on “Cutthroat,” which had three big effects sequences, including a spectacular battle between pirate ships in a storm.

Boss, Digital Domain and ILM also were after the project, even though there was a shortage of storyboards and no finished script to work from.

A source on the “Cutthroat” visual effects team says there was mounting pressure to settle on somebody to do the f/x: “‘Godzilla’ was threatening to gobble up every effects house on the planet,” he says, referring to the expensive TriStar project that is itself now moribund.

To nail “Cutthroat,” Boss produced nearly a minute’s worth of film showing a computer-generated seagoing vessel – a “ship on a chip.”

Not to be outdone, ILM tried to wow director Renny Harlin with its own CGI test ship that it had pixeled for Columbia’s “Mistress of the Seas,” a competing pirate pic that has yet to leave the dock.

But Harlin was enthusiastic about working with PDI, even though it would be a stretch for the smaller house. Rosendahl says his company was favored because it took a different approach from the other houses, combining computer graphics with miniatures and live action.

But lack of storyboards and script made it impossible for the f/x house to give Carolco a precise bid. “We made a deal to make a deal,” says the production exec who was on the project. Rosendahl confirms documents were signed that, to his understanding, awarded the contract to PDI, which then turned down work on “Godzilla” and hired five people as it began preparing for “Cutthroat.”

But Harlin had decided to build full-scale ships for his sea-battle sequences, the visual effects producer on the “Cutthroat” team was replaced and PDI was told it did not have a contract.

Carolco has declined to comment on the incident.

The company picked up some smaller jobs but ended up laying off 30 people, some of whom had been with the company for the better part of a decade, and closing down its offices at Hollywood’s Raleigh Studios.

Though he did consult with lawyers, Rosendahl has chosen not to pursue any legal claims against Carolco, instead continuing to pursue feature work to augment PDI’s healthy commercial business.

Left at the altar

It wasn’t the first time a movie had fallen out of an f/x house. Dreamquest’s Galvin says his company built its entire digital division on the hopes that “The Crow” would sign on. But “The Crow” didn’t fly when planned, so the house scrambled and pulled in work on “Coneheads” instead. Luckily, says Galvin, “The Crow” eventually happened and the house was busy.

Sources say there were a few tense weeks at Boss when, having closed a deal with MGM to do the effects on “Species” – which had not sought bids elsewhere – Boss got word that the producers wanted to check prices at other houses. With “Species” and also Warner Bros.’ “Outbreak” inhouse, Boss had felt safe turning down a chance to bid on Warner’s “Batman Forever.” The “Species” job came through.

“Even with a signed contract in hand, things can change,” says Rosendahl. But most people in the f/x business agree that what happened at PDI is rare. In most cases, if a movie is canceled and a contract has been signed, a kill fee is paid. In the case of “Cutthroat,” there was no kill fee.

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