Animal Logic’s Zareh Nalbandian on the Fuel acquisition and VFX industry
Animal Logic chief executive Zareh Nalbandian says it will be "business as usual" at the new Fuel VFX by the end of the year and the company hopes to shortly announce work on a new Hollywood feature film project.
“By the end of the year… the vast majority of the people that were stood down at the beginning of the administration will either be working at Fuel or Animal Logic,” Nalbandian said.
“The value is in people and the assets – anyone can buy hardware and software – we’ve been really really focused on trying to keep the team as intact as possible under the circumstances.”
The new Fuel VFX company, relaunched from the ashes of administration, currently employs between 20-30 people but will add to those numbers in the coming weeks. Administrator Jirsch Sutherland, appointed on August 27, had previously said about 80 people were employed by the company prior to the administration although Nalbandian said the figure was lower.
Animal Logic employs about 450 people – about 10 per cent work in short form and advertising. That division will be merged into Fuel’s short form and advertising division in Newtown although their respective film division’s will continue to operate independently.
“We hope that very soon we’ll be announcing the success of bringing in contract work on a US feature film into Fuel,” Nalbandian said. It is understood that a feature film contract delay was one of the core reasons that originally sent Fuel into administration.
Nalbandian declined to reveal the terms of the Fuel acquisition or whether employees and other creditors had received their full entitlements, citing confidentiality terms. “We made a very fair offer for the company and I hope that that’s gone some way to dealing with the creditors,” he said.
Animal Logic's infrastructure strengths – storage, render power, and connectivity – will now be made available to Fuel.
“We’ll open all those resources to Fuel to allow Fuel to be more competitive and certainly the combined strength is going to be greater than the individual parts but, having said that, we’re not trying to make Fuel into Animal Logic – we like the light weight they carry, we like the relationships they have with their own clients and particularly like the lead talent here.”
Nalbandian said Hollywood studios are generating lower revenues from feature films and passing that pressure onto VFX vendors. “It really has become a commoditised business,” he said.
Animal Logic has entered the production business, in 2010 releasing animated feature Legend of the Guardians: The Owls of Ga’Hoole, as one way to avoid the 'commodification' of the business while supporting the broader Australian production industry. It is currently working on Walking With Dinosaurs 3D – Nalbandian is an executive producer – and also contributing VFX to The Great Gatsby and LEGO: The Piece of Resistance.
However, Nalbandian said Animal Logic’s foray into production was quite different than the failed strategy of Digital Domain.
“We invest in development – developing our projects. We don’t invest in production and financing and Digital Domain did. The second distinction I draw is we are a very focused company; focused on our talent and operations here in Australia with a satellite capability in Los Angeles. They were out to rule the world with companies everywhere you looked and that’s not a talent-driven company, that’s a kind of financially-modelled company which to me is fraught with danger because this is a talent business.”
Nalbandian called on the Australian government to raise the level of the 16.5 per cent Location rebate in line with the 30 per cent Post, Digital and Visual effects (PDV) rebate. Qualifying productions are eligible for one, but not both rebates, so a large Hollywood production shooting in Australia and receiving the Location rebate is likely to go offshore for post and VFX where those rebates are more competitive.
“I don’t know why there’s a discrimination between physical and digital considering how much overlap there is now between both techniques of filmmaking so to me that’s a no brainer – that’s got to come to 30 per cent. It’s got to be announced as soon as possible so the US studios and international producers can start planning to be here in 2013.”