Exclusive: DIGITAL DOMAIN Update: Bankruptcy. The Investigation Has Begun And A Potential Suitor Is Circling

A few quick updates on Digital Domain today. First of all, Digital Domain Media Group (DDMG) declared Chapter 11 today:
"Digital Domain Media Group, Inc. (NYSE: DDMG) today announced that as part of its previously announced strategic realignment, and to ensure the long-term future of its core business and facilitate a sale of assets, it has filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court."

Further, I have received two emails and I'd like to share them both with you:

- The first one is from an employee (and more then likely a now previous employee now unfortunately) of Digital Domain in Florida:

"Rick Scott's office has in fact begun an investigation and unfortunately the word word is some sort of fraud. It appears that things are going to get worse around here, before they get better. John Textor and Kevin Ambler's seem to be on the tip of everyone's tongue." 

Rick Scott is the Governor of Florida. John Textor was the just departed CEO of DDMG and Kevin Ambler is the state Rep. in Tampa. Ambler lost his re-election bid in 2010 but was brought on the DDMG board by Textor.

- The second one is from Stephen Castor of Rocket Science 3D (a 3D conversion company) who writes:
"I wanted to let you know, Rocket Science is in the midst of opening dialogue with DDMG for the purchase of the company." 

So DDMG is in play - not entirely unexpected with the weight that Digital Domain has in the marketplace and in history. Where will DDMG wind up in a year or two? I can't tell you, but it will be interesting to follow along.

Again, godspeed to the unemployed from DDMG. There is demand though - perhaps it IS an opportunity.

Sources: MarketSaw Exclusive | fxguide | Variety

Possible Bankruptcy Looming For Digital Domain - What Will It Mean To All Of Their Operations? Potential Silver Lining? And A Michael Bay Statement...

Click to enlarge

With a recent filing with the SEC, Digital Domain Media Group states that they are defaulting on a $35 million loan now, bringing their now owing number to $51 million plus another $16 million in interest and penalties. But further than that, it also told the SEC: "An inability to quickly access additional sources of liquidity to fund the company’s current operating cash needs would materially adversely affect its financial condition and would require it to seek relief or protection from its creditors."

The local Florida newspapers are tearing up not only the leadership of Digital Domain, but also of their political leaders who bought into the glitz of having a big piece of Hollywood in their backyard. DDMG had received promises of $135 million in cash, financing, land and tax credits from Florida and the cities of Port St. Lucie and West Palm Beach. Apparently DDMG only had $6.6 million in cash back on June 30.

It seems that Digital Domain's film school built in cooperation with Florida State University will be able to continue operation. Says FSU's Andrew Syder (Director of Digital Media Programs): "We’re in bed with Digital Domain. But if Digital Domain went belly-up tomorrow, we’ve designed our curriculum so we can still serve our students. Our students wouldn’t be left high and dry."

The film school is unique in that it allows the $28,000 / year program students to work for Digital Domain while learning. That option may now not exist if a bankruptcy ensues. Hopefully that's not the case.


Many well known celebrities have been associated with Digital Domain over the years. The company's website still lists James Cameron and Stan Winston almost as if they are still involved as founders (remember this t-shirt from 1996 when they were working on AVATAR) - clearly that's not true with Cameron busy with Lightstorm Entertainment, his world breaking dives and other projects, and the sad passing of Winston in 2008. Dan Marino was also a very visible investor in the company.

Here's a statement from Michael Bay on Digital Domain:
"For those people and press asking: I stopped being an officer or director of the company over three years ago, and have not owned stock in the company for some time. I have remained a loyal client and supporter of the company however. It has amazing people and talent, and it still can be a great company! During this difficult time, my thoughts are with the great people I've had the pleasure to work with at DD."

I have also received word from someone who works for Digital Domain and it's not looking like there is much silver lining to any of this:
"Things are up-side-down here. It looks as though the In-Three Re-Vamping-Expansion is going to be a bust. Cuts are coming across the board."

In-Three was a top tier 3D conversion specialist that Digital Domain bought out in 2010.

SAME DAY UPDATE: I just received a great email from Barry Sandrew of Legend3D. In it, he passes on his comments about the state of the industry and DD itself:

"At issue: Here is a company, DD laying people off while another, Legend3D is hiring like crazy. The question is… which is indicative of the current state of the industry? My message is that the industry is alive and well. Florida was a very unfortunate anomaly that is not representative of the Industry. Lots of talented people, many that had jobs and some that were promised jobs, are unemployed today because of DD closing down their Florida operation. I know of at least one family that sold everything and was driving out to Florida for what turned out to be a non-existant job. But fortunately, these people do not have to be unemployed. Legend3D is hiring to meet an increasing demand for both our expanding 3D conversion business as well as our StereoWorks service that offers both 2D and 3D post production and VFX.

It's important that people understand… DD has historically been and continues to be an exceptional, if not iconic VFX studio. Indeed, the industry would be negatively affected if DD were not here. Legend3D has worked closely with DD on several projects, the most memorable of which was Transformers: Dark of the Moon. The cooperation and professionalism from their very talented artists and management was instrumental in making that project a success. I believe it's positive that they are currently in reorg mode. The downsizing will be very difficult for many people but it will likely mean the long term survival and a healthy turn around for DD."

I'm uncertain as to where this leaves Prime Focus and their licensing of Digital Domain's (In-Three) 3D conversion technology. I've reached out to someone I know at Prime Focus and we'll see if everything's good on their end. Hopefully it's full steam ahead for them and that this potential bankruptcy doesn't affect other companies and individuals.

**UPDATE, Sep 12: I've heard from my friend Bobby Jaffe, CSO and Vice Chairman of Prime Focus and here's his comment on the situation: "Our agreement with DD is a perpetual agreement and forever unaffected by any changes to the management or financial situation at DD."

A silver lining? Potentially. Those unemployed artists can perhaps take solace in the fact that there are other companies hiring - and hiring many. Legend3D for example is currently on the hunt for 150 compositing and depth conversion artists, rendering technicians, software programmers and data managers for upcoming projects that they have secured from three major studios. Their timeline for hiring? The next 3 months. Perhaps this is the opportunity that many have been looking for and perhaps some good can come out of this bad situation.

I want to firmly state my opinion on this matter: DDMG's demise has nothing to do with 3D or conversion. 3D Conversion is very much alive and thriving. DDMG's condition is due to over zealous leadership and decisions that were made by many (including politicians that should have known better) that has caused these events to take place. Best of luck to everyone involved - I hope that you will land with your feet on the ground in a timely fashion!

Sources: DigitalDomain | ShootForTheEdit | South Florida Business Journal | Palm Beach Post | TCPalm

3DFF Boots Up October 10-12 & 17-19 In Florida

ORLANDO/SPACE COAST TO HOST THE WORLD’S FIRST
DIGITAL 3-D FILM & INTERACTIVE FESTIVAL
OCTOBER 10 – 12 & 17-19, 2008

Orlando, FL & The Space Coast (October 7, 2008) – Representing a milestone innovation for the worldwide film festival community, the world’s premier digital “3-D Film & Interactive Festival” (3DFF) will debut October 10 – 12, 2008 in Orlando and continue October 17 – 19 at nearby Cocoa Beach. Hosted by AMC Entertainment® (AMC) and presented by RealD 3D, The Kerner Company, Domaine de Canton and Florida’s Space Coast. The project is noted as the first competitive film festival in the world to feature a program comprised entirely of digital 3-D stereoscopic content in all forms of entertainment media.

Founded by The Dream Factory Studio’s Chief Creative Officer, Christopher Crescitelli, 3DFF aims to shine the spotlight on up and coming independent 3-D directors and emerging gaming technologies. “3DFF will be dedicated to driving innovations in the 3-D entertainment industry and to help perpetuate the art and science of the medium. Through its biannual and touring non-profit festival programs, 3DFF will pay tribute to and honor the many companies, technologists, and content creators, who have in the past and are currently pioneering the future of the 3-D stereoscopic motion picture and video game industries,” stated Crescitelli.

The show opens with a gala event in Orlando on October 10 with a screening of “3ology,” a feature length program comprised of various 3-D feature clips, short films and music videos from around the world including: the trailer for Disney’s upcoming “Bolt” directed by Byron Howard & Chris Williams, Missy Elliott’s “Ching-a-Ling” 3-D Music Video directed by Dave Meyers, and Bjork’s “Wanderlust” 3-D Music Video directed by Encyclopedia Pictura. The program also features clips provided by several leading 3-D production companies including: CGI Studios, DzignLight, In-Three, nWave, Paradise FX, The Scar Company, PassmoreLab, Uvphactory and 3-D film and television pioneer 3ality Digital, who will feature a song from their “U23D” film, directed by Catherine Owens and Mark Pellington. All films and 3-D content will be screened in RealD 3D.

The three day Orlando portion of the event, hosted by AMC at Disney’s Pleasure Island, continues through October 12 with additional 3-D screenings, the weekend prior to the ShowEast Convention, where 3DFF will support its sponsors on the showroom floor.

3DFF relocates to the Cocoa Beach Hilton Oceanfront for its three day Space Coast Edition from October 17 through October 19. 3DFF’s scenic beachside venue will kick off with a Space Coast Screening and Party on October 17 and feature “The 3-D Film & Interactive Lounge” where attendees can interact with some of the world’s most advanced 3-D HDTV displays and 3-D video game presentations presented by leading 3-D technology companies including: Dynamic Digital Depth (DDD), Samsung, Hyundai IT, JVC, IZ3D, Brain Paint, Mtbs3d.com and Vzillion, the world’s first 3-D stereoscopic virtual world platform. The “3-D Film & Interactive Lounge” will tour the film festival circuit as part of a special outreach program to integrate with existing film festivals that might be interested in establishing a 3-D program of their own.

Orlando Schedule:

The Opening Night Screening will take place on Friday, October 10 at AMC Pleasure Island 24 in Downtown Disney at 7:00 p.m. The Opening Night Gala, which follows the screening, will be held at the luxurious Buena Vista Palace Hotel from 9:00 p.m. – 12:00 a.m. Additional 3-D screenings will take place at AMC Pleasure Island 24 from 12:00 p.m. – 12:00 a.m. on Saturday, October 11 and on Sunday October 12 from 12:00 p.m. to 6:00 p.m.

Space Coast Edition Schedule:

The Space Coast Screening and Party will take place on Friday, October 17, at the Hilton Cocoa Beach from 8:00 p.m. – 12:00 a.m., and The 3-D Interactive Lounge will operate Friday October 17 - 19 from 12:00 p.m. – 12:00 a.m. and the Virtual World Award Show will debut live via webcast on Sunday, October 19 at 9:00 p.m. on 3DFF.org.

Passes for the 2008 3-D Film & Interactive Festival, and Opening/Closing Night Galas are available at www.3DFF.org or by calling (415) 448-2115 for more information. Tickets will also be sold at the door for all venues.

About 3-D Film & Interactive Festival (3DFF)

3DFF is noted as the first digital 3-D film & interactive festival program of its kind in the United States. 3DFF’s non-profit initiative, whose mission is to educate and inspire independent filmmakers to use 3-D as a new tool for telling their stories, will be comprised of 3-D animated and live action film screenings, red carpet events, technology displays, and educational panels. The festival operates as a non profit 501(c)3 through a fiscal partnership with the Women In Film organization (Las Vegas Chapter).

About RealD

RealD is the global leader in 3D, bringing the most advanced and enjoyable digital 3D experience to cinemas worldwide. RealD’s next-generation technology, deployed across the world’s largest 3D platform in 27 countries with more than 1,400 installations worldwide, provides a stunningly realistic viewing experience beyond the usual concepts of 3D cinema. The impact of 3D upon today’s moviemaking has been compared to the advent of color film when once there was only black and white. Beyond cinema, RealD is the worldwide inventor and provider of key stereoscopic technologies used in science, manufacturing, marketing, and other industries, with thirty years of scientific development behind its systems. RealD’s mission-critical 3D visualization technologies are used by organizations such as NASA, Pfizer, BMW, Boeing and more. For more information, visit www.RealD.com.

Looks like a great time! I like the competitive nature of the festival - it will be interesting to see the results...

List of 3D Movie Theaters In Colorado, Connecticut, Delaware, District of Columbia and Florida

**UPDATED** The following is a list of Colorado, Connecticut, Delaware and Florida 3D Movie Theaters using RealD technology (Effective August 1st, 2008):

COLORADO
Cinemark Century Boulder 1700 29th St Boulder CO
Carmike 10 - Colorado Springs 1550 Pulsar Dr Colorado Springs CO
Carmike Chapel Hills 15 1710 Briargate Blvd #15 Colorado Springs CO
Cinemark Carefree Circle 3305 Cinema Point Colorado Springs CO
Cinemark Tinseltown 20 USA - Colorado Springs 1545 E. Cheyenne Mountain Blvd Colorado Springs CO
Harkins Northfield 18 Theatres 8300 E 49th Ave Denver CO
Regal UA Denver Pavilions 15 500 16th St Denver CO
Carmike 10 - Fort Collins 3636 Manhattan Ave Fort Collins CO
Cinemark 16 - Ft Collins 4721 South Timberline Road Fort Collins CO
Carmike 7 Cinemas - Grand Junction 590 24 1/2 Road Grand Junction CO
Regal Canyon View 14 648 Market Street Grand Junction CO
Carmike 5 - Greeley 2495 W 28th St Greeley CO
AMC Highlands Ranch 24 103 West Centennial Blvd Highlands Ranch CO
Regal Colorado Mills Stadium 16 14500 West Colfax Ave Lakewood CO
Cinemark Tinseltown 14 - Pueblo 4140 N. Frwy Pueblo CO
AMC Westminster Promenade 24 10655 Westminster Blvd Westminster CO

CONNECTICUT
Natl Am Showcase Cinemas Bridgeport 286 Canfield Ave Bridgeport CT
Natl Am Enfield Cinemas 12 90 Elm St Enfield CT
Natl Am Showcase Cinemas Buckland Hills 99 Redstone Rd Manchester CT
Natl Am Connecticut Post 14 Cinema de Lux 1201 Boston Post Rd Milford CT
Natl Am Showcase Cinemas North Haven 550 Universal Dr N North Haven CT
AMC Plainville 20 Theatre 220 New Britain Ave Plainville CT
Marquee Cinemas Westbrook Cinemas 12 314 Flat Rock Place Westbrook CT

DELAWARE
Carmike 14 Theatre - Dover US Route 13; Dover Mall Dover DE
Regal Peoples Plaza Cinema Stadium 17 1100 Peoples Plaza Newark DE
Regal Brandywine Town Center 16 3300 Brandywine Parkway Wilmington DE

DISTRICT OF COLUMBIA
AMC Loews Georgetown 14 3111 K Street NW Washington DC
Regal Gallery Place Stadium 14 701 Seventh St NW Washington DC

FLORIDA
AMC Altamonte Mall 18 433 E Alamonte Dr Altamonte Springs FL
AMC Aventura 24 19501 Biscayne Blvd Aventura FL
Muvico Palace 20 3200 Airport Rd Boca Raton FL
Carmike Royal Palm 20 5125 26th Street East Bradenton FL
AMC Regency 20 - Brandon 2496 W Brandon Blvd Brandon FL
Marquee Cinemas Coralwood 10 2301 Del Prado Blvd Cape Coral FL
Regal Magnolia Place Stadium 16 9645 Westview Dr Coral Springs FL
Muvico Paradise 24 15601 Sheridan St Davie FL
R/C Theatres Oceanwalk Movies 10 250 N Atlantic Avenue Daytona Beach FL
Rave Destin Commons 14 4000 Legendary Dr Destin FL
Carmike Amelia Island 7 1132 South 14th St Fernandina Beach FL
Regal Belltower Stadium 20 13499 Belltower Dr Ft Myers FL
Regal Royal Park Stadium 16 3702 Newberry Rd Gainesville FL
AMC Regency Square 24 - Jacksonville 9451 Regency Square Blvd Jacksonville FL
Cinemark Tinseltown 20 - Jacksonville 4535 Southside Blvd Jacksonville FL
Regal The Avenues Stadium 20 - Jacksonville 9525 Phillips Highway Jacksonville FL
Regal The Loop Stadium 16 3232 N John Young Pkwy Kissimmee FL
AMC Pleasure Island 24 1500 Buena Vista Dr Lake Buena Vista FL
Premiere Oaks Stadium 10 1800 W Hibiscus Blvd Melbourne FL
Rave Avenue 16 2241 Town Centre Ave Melbourne FL
Cobb Theatres Dolphin 19 Cinemas 11471 NW 12th St; Suite 100 Miami FL
Regal Kendall Village Stadium 16 8595 SW 124 Avenue Miami FL
Regal Southland Mall 16 20505 S Dixie Hwy Miami FL
Regal Hollywood 20 - Naples 6006 Hollywood Dr Naples FL
AMC Woodland Square 20 3128 Tampa Rd Oldsmar FL
AMC Orange Park 24 1910 Wells Rd Orange Park FL
AMC Universal Cineplex 20 6000 Universal Blvd Orlando FL
Cinemark 20 at Festival Bay 5150 International Dr Orlando FL
Regal Waterford Lakes Stadium 20 541 N Alafaya Trail Orlando FL
Carmike 10 - Panama City 4049 W 23rd St Panama City FL
Carmike 10 - Pensacola 161 E Nine Mile Rd Pensacola FL
Rave Bayou 15 5149 Bayou Blvd Pensacola FL
Rave Pensacola 18 6595 North W Street Pensacola FL
Regal Park Place Stadium 16 7200 US Highway 19 North Pinellas Park FL
Rave St Lucie West 14 1900 NW Courtyard Port St Lucie FL
Regal Royal Palm Beach 18 1003 N State Rd 7 Royal Palm Beach FL
AMC Sarasota 12 Theatre 8201 S Tamiami Trail Sarasota FL
Regal Hollywood Stadium 20 - Sarasota 1993 Main Street Sarasota FL
Carmike Lakeshore 8 901 US Hwy 27 North, #120 Sebring FL
AMC Sunset Place 24 Theatre 5701 Sunset Dr, Ste 300 South Miami FL
Muvico Baywalk 20 151 2nd Avenue North St St. Petersburg FL
Regal Sawgrass 23 2600 NW 136th Ave Sunrise FL
AMC Tallahassee Mall 20 2415 N Monroe St Tallahassee FL
Muvico Starlight 20 18002 Highwoods Preserve Pkwy Tampa FL
Regal Citrus Park Stadium 20 7999 Citrus Park Town Center Mall Tampa FL