VFX Company Wins Oscar And Goes Bankrupt. Hollywood Ignores.

The life and disrespect of Rhythm and Hues, the Oscar-winning company responsible for Life of Pi.

I apologize for the poor quality of the video, but I wanted you to see how the VFX artists for the Life of Pi were treated during the Academy Awards last week. Generally speaking, the supporting jobs in movie-making are given the short shrift in favor of the actors. Those who actually merit being in the main program (rather than the lesser, non-televised Technical Awards) are expected to get up on the stage, grab the award and get the hell off, lest they be chased off by the Jaws Theme. And they should expect the actors, who let's face it, rely more and more on visual special effects, to be sneering and joking about giving them the respect they deserve.

But the story is even more poignant than what was shown on your television screen. If you happened to be in Hollywood that day, you would have seen more of the Rhythm & Hues Visual Effects crew outside the Kodak Theater, protesting the bankruptcy and subsequent layoffs of the same company simultaneously accepting an achievement award for a movie largely comprised of visual effects:

You might assume those who work on a film that wins an Oscar would be excited about it taking home the gold, but that's not the case for over 400 current and ex-employees of visual effects company Rhythm & Hues, which filed for Chapter 11 Bankruptcy and fired over 250 employees last week. Deadline reports that many of those workers gathered and staged a large protest near the 85th Academy Awards ceremony last night.

Following the company's filing for bankruptcy and laying off hundreds of employees without pay, the effects house hoped to receive an emergency $17 million loan from 20th Century Fox and Universal so all their VFX artists could finish work on contracted projects that would last until the end of April. Legendary Pictures stepped in and paid the company around $5 million to finish the effects work on Seventh Son, the upcoming fantasy film set for release on October 18th, 2013. But things are still looking shaky for the VFX house.

The protest took place at the corner of Hollywood & Vine last night, only a few blocks away from the red carpet pre-shows near the Dolby Theatre. Reportedly even those who stuck around to work on Seventh Son haven't received a paycheck in weeks, and many are distressed about Hollywood's practice of hiring foreign companies instead of local ones to complete effects on blockbusters. Unionization is another big issue for VFX artists, but an undertaking like that is difficult to organize in a community with this many members. When VFX supervisor Bill Westenhofer accepted the award for Life of Pi last night, he was ominously played off the stage by the Jaws score and abruptly cut off just as he was beginning to tell the audience about the current situation. "Sadly, Rhythm & Hues is suffering severe financial difficulties right now, and I urge you all to remember..." and that was all he could say before his microphone was turned off.

While it's easy to dismiss this as the free market working its invisible hand, remember that Life of Pi has now grossed $585 million worldwide, not counting DVD sales. Likewise, The Avengers, which stars Robert Downey Jr. (with a reported $50 million payday) and Samuel L. Jackson (a paltry $5-6 million) grossed $1.5 BILLION worldwide. Yet the crew that gave the Hulk his bulk has to resort to literal panhandling to stay in business. A Reddit discussion enumerates the grievances:

VFX studios are having a very difficult time making profit on movies they work on, even if that movies goes on to make millions or over a billion dollars. VFX studios make 5% profit on a GOOD year, but most of the time breaking even or even losing money on a job. This in turn has a very negative effect on vfx workers working at those companies. The entire fault does not lie with movie studios or vfx studios, but both contribute to the bad state of affairs in different ways.

  1. The most noticable, is that other countries offer tax subsides that do not allow even competition. If a VFX studio in California bids on work for a set price, then a VFX studio in Vancouver can bid that very same price AND offer a 30-35% (not sure of exact figures) tax rebate on that work, but the VFX studio doesn't get that money, the movie studio does. So they (the movie studio) automatically get 30% of their VFX paid for by tax payers instead of out of their already wealthy pockets. The California VFX studio therefore cannot compete with this situation, so fair competition is impossible.

  2. Low rung jobs such as roto/paint fixes are being outsourced to China and India by movie studios because they can get the work done far cheaper there.

  3. Movie studios put vast pressure on VFX houses to lower costs AND do more work at those costs. They also put huge pressure on VFX studios to open offices in subsidized locales so they (the movie studio) can take advantage of tax breaks. Most VFX studios who refuse or can't afford to offer a subsidized location don't get the work and go out of business. However, movie studios expect the VFX studio to take care of all the costs of moving to the new country themselves. And still have the nerve to ask for cheaper labor.

Read on...

Ironically, for an industry that lives and dies by the strength of its unions (Writers' Strike, anyone?), VFX is not unionized, although there are grumblings to that end (much to the dismay of the studios).

But in the end, it's like so much of America: a very few getting huge amounts of wealth while those who dedicate huge amounts of work get kicked around until the money for them runs dry. (h/t D)

About Nicole Belle

Nicole Belle's picture
Mom, Wife, Media Critic/Political Analyst, Blogger, Austen Fanatic, Unapologetic Liberal NicoleBelle@crooksandliars.com

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