(Source: Variety.com) Not long ago I got a call from a Time magazine reporter working on a story on the visual effects business. As we discussed the dire financial straits of many vfx companies despite their growing importance to studio movies, she asked, “Don’t these people have business plans?”

I told her she was proceeding from the false premise that people start vfx companies to be business owners. Most people who go into vfx do it for the same reason people become actors: They love the work. But when they fail as businessmen, the result is too often misery.

The latest bad news from the vfx biz comes from Montreal’s Fake Studio, part of the Camera e-Motion Group. A handful of artists who worked for Fake on the 3D vfx for Dimension’s “Piranha 3D” have yet to receive payments due in April. Their plight has inspired a great deal of anger in vfx circles, where hearing “unpaid artists” and “Montreal” opens the old wound of Meteor Studios and the problems artists had getting paid for New Line’s “Journey to the Center of the Earth.”

One of the unpaid artists, Manny Wong, told Variety that with the Meteor incident in mind, he negotiated a payment-in-advance deal, but upon arrival in Montreal, he liked the atmosphere at Fake enough to forego advance payment. He says the producer was “very upfront” with him about the pic’s financial difficulties through two crises that threatened to shut down the picture. Then Fake management said it hadn’t been paid by the client and couldn’t pay the 3D team anymore from its own pockets. Months later, payment is still due.

Last week Dave Rand, a veteran of Meteor who has become something of a watchdog for abuse of vfx artists, posted about the Fake and its unpaid artists on his Facebook page. Marc Cote, an owner of Fake, responded with a note admitting the company is in arrears and saying it is “making arrangements with all of the creditors … to reimburse them as quickly as operations permit.” He continued: “Short of shutting down the company we cannot reimburse everybody’s debt in one shot. … We are 100% committed to reimbursing this debt.”

It’s been common for vfx shops to get behind on debts and wind up paying past debts out of current receipts; that’s why one analyst calls the entire vfx business “a Ponzi scheme.” Fake’s problems seem to fit that pattern. Earlier this week a Dimension spokesman said Fake has been paid. Cote was in production and did not respond directly to Variety’s inquiries, but we did hear from Louis Turp, a consultant working with Cote on “options and strategies for the future of the company.” Turp quoted Cote saying, “It won’t happen again” and added. “Cote always fulfills his obligations.”

It’s easy to paint Cote and Fake as villains, but these problems are endemic in the vfx business, and the response has been mostly finger-pointing. Studio execs blame unprofessional management of vfx companies. California artists call for an end to runaway production. Some artists call for a union, others despise the idea, and no existing guilds are rushing to organize vfx artists.

“The show must go on” has been the showbiz mantra, and the movie biz has counted on artists taking that to heart. But the patience and goodwill of vfx artists aren’t infinite. Whether the solution is market-based (i.e., artists negotiating ruthlessly and walking off immediately if a payment is missed) or a union, it’s becoming clear that the status quo will not hold. Something has to give



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