Technicolor has three main divisions: DVD services, electronics and production services (vfx, post-production and animation). The DVD arm has taken a beating in recent years; in its US filing, the company cited the general shift in mainstream media as one of the reasons for its problems.
But storm clouds are also hovering over its production units, which include MPC, Mr. X, The Mill, Mikros Image and Technicolor Animation Productions. The filing also noted, “To make matters worse, the Covid-19 pandemic has resulted in the suspension of theatrical releases and postponement of production deadlines, which significantly reduced Technicolor’s revenue from production services.”
The company reiterated this argument in a statement:
Like many companies in the media and entertainment industry, we have been severely affected by the global Covid-19 pandemic. On Monday, June 22, we announced that we had reached an agreement in principle with our lenders on a new financial framework for our long-term sustainability. It is the financial framework from which we will build a stronger future as a company and in turn become an even stronger partner for our customers. This plan includes the injection of 420 million euros of new money into the company and debt reduction.
Our new financial framework and the approval processes required to implement it will not affect our operations. Providing superior service and innovative solutions to our customers is our priority, as is maintaining the strong relationships we have with them.
Technicolor has previously cited the pandemic as a reason for changes, but the company’s woes began before the virus hit. Here are some recent examples of upheaval within the company:
- Last month, Mill Film and Mr. X merged under this last name. A statement from Mill Film described the move as “a direct and necessary response” to the effects of the coronavirus.
- During the same month, Moody’s Investors Service downgraded Technicolor’s rating from Caa2 to Caa1, citing “the impact of the pandemic on Technicolor’s operating performance and in particular the uncertainties regarding the execution of the proposed capital increase to lift approx. 300 million euros”, but also noting the “poor operational performance” of the company before the pandemic.
- In April, labor activists from the Art Babbitt Appreciation Society of Canada Technicolor castigated in a letter to its CEO Richard Moat, alleging hundreds of layoffs at three studios in Montreal: MPC, Mr. X and Mill Film. Technicolor did not respond to Cartoon Brew’s request for comment on this.
- Last December, MPC’s Vancouver studio was abruptly stopped. He had recently worked on Pokémon Detective Pikachu, Maleficent: Mistress of Evil, Cats, and the redesign of the main character in Sonic the Hedgehog.
- Also last December, Technicolor and its former CEO Frederic Rose have been charged in France for fraud and breach of trust. The charges related to the 2011 bankruptcy of post-production company Quinta Industries and the company’s acquisition by Technicolor the following month.
Between them, the Technicolor studios work on dozens of feature films and series each year. Recent projects include Ad Astra, The Lion King, Lady and the Tramp, The Call of the Wild, Dolittle, Alvinnn!!! and The Chipmunks, Elena of Avalor, and The Mandalorian. Upcoming projects include The movie Spongebob Squarepants: The Sponge on the Run, The Little Mermaid, and West Side Story.