American Cybercast files for bankruptcy
American Cybercast, the Marina del Rey-based company that pioneered Websodics with “The Spot,” has re-organized under a Chapter 11 bankruptcy filing.
The move was not unexpected. Earlier this month, company president Sheri Herman called a staff meeting, at which she told employees that unless an investor or buyer were found, the company was in danger of folding (Daily Variety, Jan. 7).
American Cybercast execs wouldn’t specify the amount of money they were seeking to keep the company afloat, but a company spokeswoman said reports of $20 million or more were exaggerated.
However, since AMCY’s first round of employee layoffs in November, insiders have criticized the company for being profligate in its spending. Sources singled out a project called “Quick Fix Theater,” designed to resemble TV interstitials. “Quick Fix,” featuring short multimedia pieces by performers such as Dave Thomas and Johnathan Katz, cost the company more than $200,000. By Hollywood standards, that doesn’t sound like much, but any num-ber of Internet companies are having trouble raising money for programming.
AMCY, like many, has gone the advertiser-supported route. Though AMCY reeled in an impressive roster of advertisers, including Sony, Eastman Kodak, Apple Computer, Toyota and Visa, ad revenues weren’t enough to keep the Webcaster afloat. But company execs were aware of that last fall, with Herman telling Daily Variety in October that a product placement-type of business model would likely be introduced this year.
AMCY’s investors include Creative Artists Agency, Tele-Communications Inc. and Softbank. Intel is also reportedly an investor, but the company won’t confirm or deny that.
On Wednesday, Russell Collins, chairman of AMCY’s parent company, ad agency Fattal & Collins, told employees that only scaled-down productions of two Web series, “The Spot” and “The Pyramid,” would continue.
About 30 staffers were laid off Wednesday, leaving a skeleton crew of about 14.
Last week, sources said, Herman was removed from day-to-day oversight of the company. She has not returned to her office since then, sources said, with Collins stepping in to manage operations.
The company’s entertainment president, Scott Siegler, who joined AMCY in November, remains on board. How-ever, the company’s chief financial officer has been let go, as have the majority of software developers and other creative talents.
Siegler is a former president of Columbia Pictures TV.
Earlier this week, Lightspeed Media, headed up by Troy Bolotnick and Scott Zakarin, former AMCY employees who created “The Spot,” made a bid to buy back that program. American Cybercast, however, rejected that bid. Sources said no other offers have seriously been considered.