Walt Disney Co.'s $4.05-billion acquisition of Lucasfilm help them grab
hold of the pioneering visual effects company Industrial Light & Magic and Skywalker Sound.
ILM is considered one of the preeminent visual effects firms in the industry, known for its high-level work on the "Stars Wars," "Indiana Jones" and "Jurassic Park" movies, the "Pirates of the Caribbean" and "Iron Man" films and an upcoming "Star Trek" film from J.J. Abrams.
"They are certainly considered the grandfather of all visual effects companies,'' said Eric Roth, executive director of the Visual Effects Society. "Will it give Disney a big competitive advantage? I don't know. Is it something that will bring further stability and a moving forward future to ILM? I suspect it will."
ILM employs 800 people in San Francisco and 200 more at a studio in Singapore. In recent years, the Lucasfilm division has moved beyond providing post-production services to producing its own content, including its first animated feature film in 2011, "Rango," directed by Gore Verbinski and released by Paramount Pictures.
In a conference call with analysts Tuesday, Disney Chief Executive Bob Iger said Disney had no plans to change ILM's operations.
"Our current thinking is that we would let it remain as is,'' Iger said. "They do great work. They do work for multiple studios. It's been a decent business for Lucasfilm and one we have every intention of staying in."
Owning an in-house visual effects company could give Disney a leg up at a time when increasingly expensive visual effects are increasingly important to the success of movies. Visual effects can cost as much as $60 million on a big-budget movie.
"It will lower the costs of making visual effects,'' said Dave Rand, a senior visual effects supervisor who has worked on "Transformers: Dark of the Moon" and the upcoming "Life of Pi." "It's far more efficient to have everything close to home and having everything under one roof rather than having to go to several locations to get their movie done."
Despite the strong demand for their services, California effects houses have been squeezed by foreign rivals that benefit from tax credits and lower-cost labor.
In a sign of the times, ILM rival Digital Domain's parent company recently filed for bankruptcy, prompting the sale of the Venice studio to China's Galloping Horse and India's Reliance MediaWorks.
Disney and other studios, however, have had a mixed track record in buying visual effects companies.
Although Sony had success with the launch of Imageworks in 1992, Fox purchased visual effects shop VIFX in 1996 but sold it three years later to Rhythm & Hues.
In 1996 Disney acquired Dream Quest Images, which later became the Secret Lab that worked on the digital film "Dinosaur," but it closed five years later.
"There is some benefit to holding (ILM) but there are an incredible amount of costs associated with it," said Scott Ross, a founder of Digital Domain and former general manager for ILM. "Disney has not had a good experience with visual effects companies."
Despite the magnitude of the deal, investors seemed to barely react to the news Wednesday. Disney shares closed at $49.12, down 96 cents, or only 2%, which analyst Tony Wible of Janney Capital Markets said may be attributable to disappointed investors who hoped Disney would spend more money repurchasing stock than on new acquisitions.
Some analysts reacted positively, saying the deal could ultimately prove as successful as Disney's purchases of Pixar and Marvel.
No comments:
Post a Comment