In September 2010, Textor closed a deal with the West Palm Beach City Commission to build the Digital Domain Institute — a film and animation college that would be run in cooperation with Florida State University in that city. West Palm offered Digital Domain a $10 million piece of prime real estate, free of charge, in the heart of downtown. The city also agreed to give Digital Domain a $10 million grant in several installments, contingent upon the company's hiring employees and enrolling students over the next few years.

"We have vetted this project extensively, and there's nothing... of concern," Kim Briese­meister, the executive director of the West Palm Beach Community Redevelopment Agency, said at the approval meeting.

The city had hired a private investigation firm to run public-records searches on Textor, Teaford, Sims, and BabyUniverse. It also contracted a California entertainment lawyer, Steven Beer, for $15,000 to review the company. He produced a glowing report.

Video instructor Dwayne Taylor (left) and his student Andrew Spence (right) pose with John Textor in West Palm Beach.
Video instructor Dwayne Taylor (left) and his student Andrew Spence (right) pose with John Textor in West Palm Beach.
Digital Domain's founder says working on Titanic almost sank the company.
Digital Domain's founder says working on Titanic almost sank the company.

"There was not one statement in there that had anything to do with financing," Domino fumes. "They hired some frickin' entertainment lawyer."

Commissioner Kimberly Mitchell and Mayor Lois Frankel were Textor's main champions on the dais. Few critical voices were heard as the gavel came down.


The film school in West Palm Beach was slated to open in 2012 in temporary quarters while construction began on a shiny new 300,000-square-foot building. As part of the welcoming brigade for Textor and his crew, city officials hired kids and a teacher from a digital video after-school program to make a documentary about Digital Domain.

Textor wore an open-collared paisley shirt and a dark blazer to an interview that the students filmed. In it, he told the youngsters just what they wanted to hear, suggesting they could have wonderful futures in film. "I'm not sure why we have such difficulty getting parents to support their kids' dreams," he said.

At another point, he said, "One of the toughest things is to come back to your hometown, where everybody's watching. Some are rooting for you; others are rooting against you, hoping you fail."

By the end of the interview, Andrew Spence, a 21-year-old West Palm native, thought Textor was "the coolest guy ever" and decided to apply to the Digital Domain Institute's four-year film degree program.

Dwayne Taylor, the teacher, was equally impressed with Textor's promise to employ the top 10 percent of the institute's class at the new Port St. Lucie studios.

"He sold me," Taylor says. "There's no doubt about it."

But even with the government grants and freebies, Digital Domain was spending more than it brought in. In 2011, it hired hundreds of employees, including Disney veterans, to work in Port St. Lucie. Its first film as part of the company's Pixar-like reinvention was underway: The Legend of Tembo, an animated feature about an African war elephant trying to return home. Success was not assured, though: The film didn't have a distributor yet, and no major celebrities were signed on for voice-overs.

Tembo was a hugely ambitious undertaking. An average animated feature can cost around $100 million, and industry sources have indicated Digital Domain set aside far less than that amount for the project. Few animated films survive long without the support of a major film studio and star talent. Sources say Digital Domain also sank about $3 million worth of preliminary work into the film Paradise Lost — an adaptation of the Milton poem slated to star Bradley Cooper — at a discount, in exchange for production credits. But the movie was shelved due to budget issues by Legendary Pictures before filming even began.

In 2011, seeking an infusion of capital from new shareholders, Textor and the management moved to take the company public.

Before the offering took place in November, Textor made a video presentation to potential investors. Talking up the company's prospects, he raised a controversial idea: saving money on films by getting the students from West Palm to work on them for no charge. "While the rest of the industry is chasing cheap labor all over the world... we'll have this right under our nose at the Digital Domain Institute: student labor. It's not only low-cost; in our model it's free."

Industry veterans, already dispirited by the cutthroat world of digital effects, were livid. Textor's speech eventually ricocheted around blogs, garnering angry comments. ("When I was a student, I would have loved to have been taken advantage of like that," Textor later explained.)

The initial shares were priced at $8.50, down from the company's goal of $12. Just days after the offering, Textor did something that would have likely spooked investors if they'd known about it. He took out a bank loan for $10 million to personally buy up shares of the new public company — roughly a quarter of them. "That, in my lay judgment, is as close to stock manipulation as you can find," Domino says.

During a conference call to shareholders in December 2011, Textor made excuses and urged them to be patient. The effects side of the business was busy, he said, but cash flow from major film projects can take a long time to materialize. Textor admitted, "If you finish a project and you don't have another project immediately on its heels, you can show an irregularly large cash burn in that particular quarter."

« Previous Page
 |
 
1
 
2
 
3
 
4
 
5
 
6
 
All
 
Next Page »
 
My Voice Nation Help
0 comments
 
Miami Concert Tickets

Around The Web

Loading...