C.O.R.E Closes the Doors

16 03 2010

C.O.R.E Digital Pictures closed its doors yesterday afternoon. There are speculations as to the reasons for this tragic ending to a business, once a booming success. I’d like to share some comments posted by fellow Toronto studio owners after yesterdays news release.

http://www.canadiananimationresources.ca/?p=1371

Gene Fowler – Fatkat

March 15, 2010 at 8:36 pm / Canadian Animation Resource

I don’t blame the liberal government or RBC. They’re protecting their bottom line. I lost my studio with over 100 staff about this time last year, RBC pulled the plug on our line, the government wouldn’t step in to save 100 jobs. Plus prior to that, they wouldn’t increase the tax credit to be on par with other provinces, wah, wah, wah.

In the end, it’s no ones’ fault but the CEO. I certainly take full blame in the downfall of Fatkat. We grew too quick and had too much overhead and we couldn’t change quick enough. Core is no different, I’ve watched them grow and cripes the expenses of running a studio in Toronto, man I wouldn’t want to know what they pay in rent.

You need to have constant deals, constant work in the pipeline. If you have a weak quarter or god forbid a loss in consecutive quarters be ready for the bank to call their lines and loans. Because when you’re in the service business, all you have as security is computers that are out of date and some chairs and that’s worth squat to a bank. They don’t like that. If you have a library of IP well now, that’s a different story I’m sure.

To keep a studio rolling, it comes down to sales, and when sales and the prospect of sales is based on how “low you can go” in price compared to the next province, country or now even state in the realm of competitive tax credits. then you’re shit out of luck and it’s a bad business model. At any given time the government can simply change their regulation on their tax credit and almost overnight put you the hell out of business. (insert studio names here, there’ tons of them I’m sure)

You should not keep a massive overhead of facility, staff or pricy liabilities when your business is based (at it’s core, no pun intended) on government subsidies. It was CORE’s turn to learn this. I wonder who’s next? Ubisoft? EA? Starz? Who knows… it’s sad though. Seems tax credits are this industry’s curse. We can’t live with them and we can’t live without them.

My heart goes out to the crew, I hope you get some back cash out of it. Find out who the directors are through a search in the ontario corporate registry. Perhaps you can find the shareholders and communicate with them. Or if they’re a public company, they must publish their financials and a contact resource. Start researching and sending communications. Keeping copies of the correspondence for you and of course the labour board of Ontario. Start a blog for the ex-employees where you all can post resources perhaps.

Best of luck for you and us all.

Ricardo Curtis – House of Cool / Red Rover

March 15, 2010 at 11:11 pm Canadian Animation Resource

I feel badly for everyone at Core. It is very difficult to watch everything you have worked for come tumbling down around you. As both an artist and studio owner of House of Cool and Red Rover, Core’s demise is something that hits very close to home.

It’s unfortunate that people are quick to lay blame on management or government. I have yet to meet any manager from any studio who are willfully trying to drive their companies into the ground. The surprising end to a company usually happens as management is exhausting every option to save the company. I highly doubt that Core’s management was any different.

As far as the government’s involvement, I have no knowlege of Core’s situation but the Government’s only goal is to create jobs. They will do it through tax breaks, grants etc. but generally only move when we (the industry) tells them what the best course of action is. Typically the Canadian animation industry will push for tax breaks that makes our services cheaper and more competitive. This is good in the short term because it does make our services more attractive. Unfortunately policies like this cannot work in the long term because eventually someone else will do it cheaper and we start under bidding ourselves and eventually the tax credits become an essential part of the business.

If Canadian animation professionals were serious about protecting other studios from Core’s fate they would lobby the government to support original content and distribution so that we can OWN instead of SERVE.

Advertisements

Actions

Information

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




%d bloggers like this: