A month ago, on Friday, Feb. 21, Technicolor began to alert employees that it was in dire financial trouble and could (and did) begin to shut down that Monday. The stunning collapse of the iconic century-old company sent shockwaves through the industry, affecting its brands and thousands of employees around the world, as well as their customers.
Paris-headquartered Technicolor had reorganized several times in recent years and when it closed it was the parent company of VFX giant MPC, commercial VFX studio The Mill, Mikros Animation and Technicolor Gaming. None were headquartered in the U.S. but all maintained either domestic studio operations or points of contact.
“Just like that, the place where we had poured the majority of our professional careers and passion — our creative home — was gone,” says Robert Sethi, who was executive creative director at The Mill’s Los Angeles base. But he and additional members of The Mill’s U.S. leadership weren’t ready to give up on the team behind what was long considered among the top commercial VFX brands in the world. A group of them banded together and joined forces with Dream Machine FX, a group holding company for VFX brands, to launch a new venture dubbed ARC Creative. A month later, members of The Mill’s U.S. leadership team shared with Variety their personal stories and recollections of the 72-hour period from receiving notice of Technicolor’s downfall to launching ARC Creative amid a chaotic and emotional weekend. Technicolor was contacted for this story.
Members of the ARC Creative team share that after receiving word from Technicolor, that Friday afternoon they talked with David Li, chairman of Dream Machine FX, the venture behind VFX brands such as Important Looking Pirates, whose recent credits include “Shogun.” The meeting was hastily arranged by Niklas Jacobson, co-founder of ILP and a Dream Machine partner.
“I go back 25 years with several key people at Dream Machine. Yafei Wu and Niklas Jacobson, the founders of ILP, and I started our careers together in Sweden in 2000,” Sethi says. In the close-knit VFX community, other leaders at The Mill also had ties to individuals at Dream Machine including Li. The Mill was founded in 1990 in London and grew to become a globally-recognized VFX and creative leader for short-form work in areas including commercials, marketing and games. It was acquired by Technicolor in 2015.
The individuals say that they explained their situation to Li, and together they went to work to find a way forward, though amid increasing disarray.
“By the time we get off the call with David, news has already leaked that Technicolor is shutting down and that everyone had been fired. As you imagine the next 12 hours are absolute chaos, talking to the crew, getting frantic calls from clients, all while trying to figure out if this Dream Machine thing could even be possible,” according to Anastasia von Rahl, managing director of The Mill L.A.
The Mill’s clients, it appears, didn’t hear directly from Technicolor, but rather learned of its predicament through the press or industry colleagues. Von Rahl says that through that weekend, The Mill team also worked with clients to help them to retrieve their assets, including projects in production.
“We called the crew who just got WARN notices and asked them to come in and help us prep and ship material back to clients so they could finish their productions,” she remembers. “A moment stands out vividly to me. Jacky Gilson, the head of production from EA, called and I immediately start running through the plan on how we had a team working all weekend to be able to hit their deadline and she stopped me mid-sentence to say, ‘I called to see if you are OK.’”
Gavin Wellsman, who was executive creative director at The Mill New York, reveals that there were other challenges in trying to create a business amid the shutdown. “Over the weekend, senior Technicolor executives — the same ones who had their hands on the wheel this entire time and some of whom had proclaimed just a few months prior in the last town hall that Technicolor had turned a corner — attempted to launch similar companies with private equity backing, which created even more confusion for the staff,” he reveals.
Wellsman was on a family vacation when he got the news. “I was shocked and devastated. I was fully aware of Technicolor’s financial problems but I never thought for a second that The Mill would ever close its doors,” he says, adding that he spent that Friday on the phone, calling staff and clients. “Having spent my entire career at The Mill, my first thought was the staff and their families, from the runners to the MD’s we were all being relieved of our duties and left without any severance so we knew we had to make a plan and act quickly.” On those calls, he also learned of the potential opportunity with Dream Machine. “I raced back home to Brooklyn to get to work.”
Sethi says that by Saturday morning, he and von Rahl were back on the phone with Li, “who laid out a possible path forward. The night before, we had worked tirelessly — drafting a business plan, exploring every angle, and trying to shape what this could become. Together with David we outlined exactly what needed to happen and the scale and number of people Dream Machine could responsibly bring on. We knew time wasn’t on our side. With a crew this talented, people had to do what was best for their families and livelihoods.”
Angela Lupo, who was The Mill’s New York managing director, relates that with Li’s go-ahead, they began to share the plan with artists, “communicating that we may have a path out of the fire and taking a temperature on who was in. I knew we had to move quickly to make as smooth of a transition as possible for the people coming along. We also needed to get ahead of all the misinformation out in the market.” Von Rahl adds that the logistics of starting the venture over that weekend ranged from finding insurance — “this was the end of the month so people were losing insurance at the end of the week” — to setting up payroll and onboarding the team.
Over the years, The Mill’s work has been recognized with countless honors including Cannes Lions, Clios, and Visual Effects Society Awards, in addition to a VFX Oscar for its work on 2000’s “Gladiator.” But now they needed a new brand. Sethi relates that they chose ARC Creative because it “meant something to us, because not only were we trying to build a proverbial boat over a weekend, but this was a major pivot in the story for all of us. ‘Creative’ being added was important because that’s the through line of all the talent.” Mill creative director Ilya Abulkhavov sketched company logos amid the naming discussions.
The Mill leaders believe it was trust in a tight-knit team built during their careers that also helped to launch the effort amid the Technicolor closure. “Trust had been gradually eroding for a long time and I think at this point with the sudden notice of closure, the trust was now gone completely with corporate management,” suggests Wellsman. “On the other hand, with the four of us [The Mill leaders in New York and L.A.], the staff had seen us push for change over the years. I never thought that I would be faced with a decision to start a company within 72 hours and would be making the biggest decision of my career. The message in my head that was on loop was ‘the staff deserve better’ and even though I had also been left high and dry along with everyone else I felt like it was my duty to try and keep as many of the core team together as possible.”
According to von Rahl, ARC Creative was able to hire roughly 100 people full-time while providing freelance work to an additional 50 artists — more than half of The Mill’s U.S. team — and plan to keep their bicoastal operations. They are currently working in temp space while looking for permanent locations in Los Angeles and New York. Lupo acknowledged PostWorks New York, which shared their space, allowing ARC to quickly start working with clients. Von Rahl reports that ARC Creative currently has 21 projects in house, thanks to relationships they had developed over the years, including with Electronic Arts and Amazon.
In prior Variety coverage, sources who were employed by Technicolor (both in the past and at the time of the closure, though not Mill employees) contended that mismanagement was the major cause of Technicolor’s collapse, though VFX pros also acknowledge that some poor decisions were likely exacerbated by an already challenging business model. The industry continues to suffer from low margins and is heavily impacted by tax credits that have post-production work moving from one part of the world to another in an endless quest for the best incentives. And like the rest of Hollywood, in recent years the impact of pandemic shutdowns and 2023’s double strikes by the WGA and SAG-AFTRA further challenged the business.
At noon on Monday, Feb. 24, The Mill staff was walked out of their offices and the doors were closed. That day, thousands of employees from around the world at Technicolor-owned brands lost their jobs as the company began to close. (Since that day, Technicolor Games was acquired by global language translation and AI tech business Transperfect.)
ARC Creative was then hurriedly announced. Von Rahl says community support gave her optimism, “from our editorial friends offering to let us come into their space, production companies ringing to say they will support and send work, an agency partner offering to help write strategy, to Amazon calling and asking to be the first client.”
“We were overwhelmed with the outpouring and love and support from friends, clients and colleagues who could not believe that we rallied so quickly,” Wellsman remembers. “I think that most of the people that responded really needed something good to come out of this absolute disaster.”
“I had mixed emotions. I was still in shock, a little nervous but also extremely excited for the future.”
