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Following the announcement on Nov. 4 that Framestore — the visual effects house whose work on Gravity and Blade Runner 2049 won VFX Oscars — in partnership with London-based Aleph Capital and New York-based Crestview Partners acquired postproduction giant Company 3, VFX business Method Studios and their sister companies, Framestore founder and CEO Sir William Sargent spoke with The Hollywood Reporter about why he pursued the mammoth VFX deal, plans for the combined companies and his vision of where the VFX and postproduction business is heading.
The company declined to reveal purchase price and terms of the deal, but the combined businesses now make up a global VFX and postproduction powerhouse with bases in major production centers on four continents. Framestore — whose recent work includes Netflix’s The Midnight Sky and Jingle Jangle — maintained facilities in London, Mumbai, Montreal, New York, Chicago and Los Angeles. Company 3 (best known for color grading, with recent work including Wonder Woman 1984 and Top Gun: Maverick) and/or Method (Top Gun: Maverick, Ad Astra) has bases in most of those cities and extend the combined companies’ reach to additional markets including Atlanta, San Francisco and Melbourne. Company 3, Method and its sister companies were Deluxe Entertainment Services brands until last summer, when Deluxe, sans its creative businesses, was acquired by Platinum Equity; Deluxe had previously filed for Chapter 11 in late 2019.
You caught a lot of people by surprise. What prompted the deal and how did it come together?
I have felt, and this is pre-COVID, we needed to change. You can never stand still. [I thought about] consolidation, not for the sake of less companies that are bigger, but companies that maybe offered a range of skills and a scale that met the scale of our clients. If you think about it we deal with some very large content-making clients who in turn deal with an awful lot of smaller players … which is not necessarily efficient for them nor the people doing the work. We’ve seen it in other industries, where the people in the supply chain slowly come together into bigger and more coherent businesses aligning themselves with the way the clients work.
That lead me to being introduced a few years before to [Company 3 head, co-founder and colorist] Stefan Sonnenfield. One of the comments [when the Company 3 deal was announced] is “we’re very different,” and people go “I shall never put the two of you together.’ You know what I mean? We’ve become great buddies and have a lot respect. Lots of things we have different views on, but quite often come to the same conclusion from a different angle. He is a complete dynamo, larger than life, major figure in the industry. I’m a shy Irishman who rarely gets out of his box, so to speak. You have the two contrasts.
I’m not a Hollywood person, I’m not based in Los Angeles. I thought if I am going to evolve, I need to evolve with an eye on that part of the world.
When did you start thinking about the acquisition?
With the Chapter 11 last year and Stefan taking over the company, it was clear to me that the banks would dispose of the business because they’re not in the business of owning visual effects houses. I was entirely aware that there was window which would at some point close. So if I wanted to have a group of people like Stefan and others on board, the opportunity would not be available in 2021.
Let’s clarify the new Framestore ownership structure. Your company had been majority owned by Cultural Investment Holdings in China with the management team holding a minority stake.
Basically what I’ve done is not taken any debt into the company. I’ve taken equity because as you know I don’t like debt as a rule and I don’t mind a small amount to oil the wheels but I don’t like it as a way of life, so we brought on board some financial partners who I’ve known for a number of years. We now have (minority partners) Aleph Capital and Crestview Partners. So basically Capital Investment Holdings switched to being a minority partner when these new investors came on. And then your management team [has a minority stake]. In addition to myself [there are] seniors like co-founder and chief creative officer Mike McGee; chief creative officer and VFX supervisor Tim Webber (who won an Oscar for Framestore’s work on Gravity); and head of film Fiona Walkinshaw. And Stefan is coming on board as a partner.
With regard to the way visual effects are produced for tentpoles, in the case of films like Guardians of the Galaxy Vol. 2 and Avengers: Endgame, Framestore has already worked with Method.
Yeah, completely. We generally split movies with [large visual effects houses including] DNEG, MPC, Method. It’s very unusual for there not to be two [or more] bigger players on the same picture [in addition to smaller players].
Will it all be branded as Framestore or will you continue to use the Company 3 and Method names?
We’ll spend three to six months thinking that through [along with evaluating other aspects of the combined companies]. I don’t know. I’m not hung up on, hey, what should we call all this, guys?
Would you elaborate on your overall strategy for the company?
At Framestore we do pre-vis. Then you go into virtual production on set, and then you go into execution of visual effects. That’s where we stop with Framestore. Company 3 does dailies and everything that’s involved in dailies. So they’re engaged with the director while we’re engaged with the director. Stefan just sat with George Clooney grading [The Midnight Sky for Netflix, for which] we’ve done VFX. So we are going to be unique in that we cover [these combined] aspects of filmmaking.
And you will continue to do interactive work, like virtual reality and theme park attractions.
Oh, absolutely. We work on all the platforms that a story’s told on, and my vision is that the same story, environment and characters will be delivered across the platforms. If you take a Marvel, we did Guardians. We did the characters in the movie. We then did the content in the dark ride in the theme park. Storytelling is moving to a nonlinear, multiplatform format. And when you look back in ten years time it will be different. If you think about the group that we put together, we can pretty much cover all the bases and so we can help an IP owner, whether it be a studio or a director or a writer. We designed, for example, the characters with J.K. Rowling when she was writing the script for Fantastic Beasts, because Fantastic Beasts was not a book. It started life as a script that she wrote.
How does the deal impact the staff?
[We want to] do great work and to build on it. This has not been an easy time. Not just with us, you know, there’s been job losses across the industry. And we’re in a situation where the volume of work is down collectively, it’s across all the companies because most of us have been dealing with material that was filmed pre-COVID. All the companies including ours and the companies that we acquired have less staff than they had this time last year. So my ambition is that we get back to the levels we were at last year because I believe that the volume will come back. Therefore this is an exercise in not one plus one and take out half. This is an exercise in one plus one equals more. You can’t have too many great supervisors. You can’t have too many good systems people. I’ve done this in order to enhance the people equation. It’s not about equipment, it’s not about buildings, you know, it’s about good people.
What impact has COVID had on the way your company’s been working this past year and how is it impacting the way you’re thinking ahead about brick-and-mortar facilities?
To my astonishment and everybody else’s, we’re working incredibly well delivering major movies working from home. And if you’d said that to me 12 months ago, I’d have said that’s not an option. We’ve learned a lot, we’ve adapted and we’ve made it work so to speak. [As to thoughts on brick-and-mortar facilities] I said to myself, as a result of this, that we would not acquire more property, even if we grew in size because of the flexibility [of remote working]. So the instinct, and this is not a conclusion, the instinct tells me that the amount of property we have is as much as we’ll ever need.
With regard to cities where both Method and Framestore, for example, operate, would you keep the two facilities?
That’s a very good question. There may be like a studio in one and something [else that’s unique] in the other one and so until one spends the three to six months [examining this], I don’t know the answer to that.
Interview edited for length and clarity.
A version of this story appeared in the Nov. 18 issue of The Hollywood Reporter magazine. Click here to subscribe.
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