The Final Days of Technicolor: Inside a Band of Employees’ 72-Hour Race to Launch New Company ARC Creative (EXCLUSIVE)

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A little over a month ago, on the chilly Friday of February 21st, I found myself stunned as I received a warning from Technicolor about their precarious financial state. By Monday, this century-old icon began its shutdown process, sending tremors throughout the industry that echoed across the globe. This collapse not only impacted their brands and countless employees worldwide but also their valued customers like myself.

Based in Paris, Technicolor, which has undergone multiple reorganizations in recent times, eventually closed as the parent company of several prominent visual effects (VFX) entities. These included MPC, a VFX titan, The Mill, a commercial VFX studio, Mikros Animation, and Technicolor Gaming. While none were headquartered in the United States, all either operated studios within the country or maintained domestic contact points.

Robert Sethi, former executive creative director at The Mill’s Los Angeles branch, found himself in a difficult situation when the place where he had dedicated a significant part of his career and heart — our creative sanctuary — was suddenly no more,” he expressed. However, he and other key members of The Mill’s U.S. management refused to abandon the talented team behind one of the world’s top commercial VFX brands. They rallied together and partnered with Dream Machine FX, a collective company for VFX brands, to initiate a new endeavor called ARC Creative. Within a month, they opened up about their personal journeys during those tumultuous 72 hours — from receiving the news of Technicolor‘s decline to launching ARC Creative amidst a whirlwind weekend. We reached out to Technicolor for comment on this story.

Representatives from ARC Creative’s team reported that following a communication from Technicolor, they had a quick conversation with David Li, the chairman of Dream Machine FX, an enterprise responsible for VFX brands like Important Looking Pirates, whose latest projects include “Shogun.” This meeting was organized by Niklas Jacobson, a co-founder of ILP and a partner at Dream Machine.

25 years ago, Sethi began his career alongside Yafei Wu, Niklas Jacobson, and others who would later found ILP, at Dream Machine in Sweden. Notably, key figures from The Mill, a prominent VFX company founded in London in 1990, also had connections to Dream Machine members like Li. Over the years, The Mill established itself as a globally-respected leader in VFX and creative fields such as commercials, marketing, and games. It was eventually acquired by Technicolor in 2015.

I’ve shared my circumstances with Li, and we’ve joined forces to seek a path ahead amid growing chaos.

During our conversation with David, it became clear that Technicolor was closing down and everyone had been let go. Over the next 12 hours, the situation unfolded into a whirlwind of activity as I reached out to my team, fielded panicked calls from clients, and grappled with whether The Dream Machine project could still be viable. This is according to Anastasia von Rahl, managing director of The Mill L.A.

It seems that The Mill’s clients were notified about Technicolor’s situation indirectly, either via news outlets or by fellow industry professionals. According to Von Rahl, over the course of that weekend, The Mill team collaborated with their clients to assist them in recovering their assets, which included projects currently in progress.

She recalled that we contacted the team who had recently received WARN notices and requested them to assist us in readying and shipping materials to our clients, allowing them to complete their productions. A particular instance sticks in my mind: Jacky Gilson, EA’s production head, phoned me, and as I began outlining our strategy for a team working throughout the weekend to meet their deadline, she interrupted to express concern, asking, ‘I called to check if you are alright.’

As a devoted follower, I’d like to share my perspective on some unexpected hurdles faced while establishing a business during the lockdown. You see, top executives from Technicolor New York, the very individuals who had guided us through this journey all along, made attempts over the weekend to establish similar ventures with private equity support. This move added to the confusion among the team, as it mirrored what some of these same executives had asserted during our last town hall meeting – that Technicolor had finally turned a corner just a few months prior.

While on a family vacation, Wellsman received troubling news about The Mill. He was shocked and saddened, as he had known about Technicolor’s financial struggles but never anticipated The Mill closing. That Friday, he spent the day making phone calls to both staff and clients. Given his long career at The Mill, his immediate concern was for the employees and their families, from the entry-level runners to the Managing Directors, as they were all being let go without any compensation. This realization spurred him into action, as he knew immediate planning was necessary. During those calls, he also learned of a potential opportunity with Dream Machine. Upon returning home to Brooklyn, he wasted no time getting back to work.

Sethi communicated that by Saturday morning, he and von Rahl were conversing once more with Li, who proposed a potential course of action. The previous night, they had been laboriously engaged in the creation of a business plan, examining every aspect, and trying to mold what this could evolve into. In collaboration with David, they clearly defined what steps Dream Machine required and the magnitude and number of individuals it could reasonably accommodate. They were aware that time was a crucial factor. Given the caliber of this team, it was essential for each member to make decisions that prioritized their families and financial stability.

Angela Lupo, previously The Mill’s New York managing director, recounts how with Li’s approval, they initiated discussions about their plan with artists, emphasizing that there might be a way out of the crisis and gauging interest. She recognized the importance of acting swiftly to ensure a seamless transition for those joining. Furthermore, they aimed to counteract market rumors prematurely. Von Rahl also mentioned the challenges involved in launching this venture over the weekend, such as securing insurance (as it was near the end of the month and people were losing their coverage), setting up payroll, and onboarding the team.

Over time, The Mill’s work has been celebrated with numerous accolades such as Cannes Lions, Clios, Visual Effects Society Awards, and an Oscar for Visual Effects (VFX) on “Gladiator” from 2000. However, they found themselves in need of a fresh brand identity. Sethi explains that they chose ARC Creative because the name held significance to them; not just because it symbolized a quick construction project, but also because this was a significant shift for everyone involved. The addition of ‘Creative’ was crucial as it represents the continuous thread of talent within their team. Mill creative director Ilya Abulkhavov began sketching potential logos during the discussions about the company name.

The top brass at The Mill feel that their long-standing camaraderie, cultivated throughout their professional journeys, played a significant role in initiating the new venture following Technicolor’s shutdown. According to Wellsman, trust had been deteriorating for quite some time. He believes that with the abrupt announcement of closure, any remaining trust between staff and corporate management vanished completely. Conversely, the team in New York and L.A., led by The Mill leaders, were known for advocating change over the years. It never crossed Wellsman’s mind that he would find himself starting a company within just 72 hours, making what would become the most crucial decision of his career. A constant thought echoing in his head was ‘the team deserves better’, despite also being left in a similar lurch as everyone else, he felt it was his responsibility to keep as many key members together as possible.

As per von Rahl’s report, ARC Creative has managed to employ around 100 individuals full-time, with an additional 50 artists working as freelancers. This accounts for more than half of The Mill’s U.S. team. They aim to maintain their bicoastal operations, currently operating out of temporary spaces while searching for permanent locations in Los Angeles and New York. Lupo acknowledges the contribution of PostWorks New York, who generously shared their space, enabling ARC to promptly collaborate with clients. According to von Rahl’s latest update, ARC Creative has 21 ongoing projects, many of which are a result of long-standing relationships they have built over the years, including with Electronic Arts and Amazon.

Previously, it was reported in EbMaster that individuals who worked for Technicolor (including those before its closure, but not necessarily Mill employees) claimed that mismanagement was the primary factor leading to Technicolor’s downfall. However, VFX professionals also admitted that some questionable decisions might have been compounded by a difficult business model. The industry has long struggled with low profit margins and is significantly affected by tax credits that cause post-production work to constantly shift from one region to another in search of the most beneficial incentives. Moreover, similar to Hollywood as a whole, the industry has recently faced difficulties due to shutdowns caused by the pandemic and the double strikes by the WGA and SAG-AFTRA in 2023.

On Monday, February 24th, at midday, The Mill’s staff were escorted from their workplace, and the building was sealed shut. That very day, countless workers across various brands owned by Technicolor were let go as the company initiated its closure. (Following this event, Transperfect, a global leader in language translation and artificial intelligence technology, acquired Technicolor Games.)

ARC Creative was swiftly unveiled to the public. Von Rahl expressed her optimism, stating that “from our editorial companions generously offering us their workspace, production companies reaching out to express support and send work, an agency partner offering strategic assistance, to Amazon themselves contacting us, eager to be our first client.

As a movie enthusiast, I was touched beyond words by the torrent of affection, encouragement, and support from friends, patrons, and associates who were astounded by our swift recovery. It struck me that many of those who reached out were yearning for a silver lining amidst this catastrophic situation.

I felt a blend of feelings. I was still stunned, somewhat anxious yet incredibly thrilled about what lay ahead.

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2025-03-25 23:17