Deluxe signs deal with Sony Pictures Entertainment

Five years after launching its digital intermediate facility, Sony is turning over operations to Deluxe Entertainment, one of Hollywood’s leading post-production and digital asset management companies.

Deluxe, which is based in New York and Los Angeles, said it has signed a deal to take over operations of Sony’s Colorworks digital entertainment facility, which is closing.

Deluxe said it acquired certain assets from Colorworks as part of a broader production services agreement with Sony. Financial terms were not disclosed.

The 14,000-square-foot center housed in the studio’s Stage 6 offers digital workflow services for filmmakers, including scanning and managing film in 4K for archiving and other purposes.

Under the agreement, the facility will offer color grading, mastering, restoration and related services for film and TV projects by studios, networks, independent producers and filmmakers worldwide, Deluxe said in a statement.

“This agreement is a milestone in our strategic efforts to link our industry-leading artisans arm-in-arm with world class content creators,” Deluxe Chief Executive David Kassler said.

When it opened in 2009, Sony touted the Colorworks facility as a state-of-the-art center that epitomized the studio’s position to capitalize on the convergence of entertainment and technology.

“Colorworks represents an important blending of the highest level of talent and the most powerful tools in our industry,” the studio said in 2009.

Handing over the operation to Deluxe would allow Sony to save money at a time when the studio is under heavy pressure to reduce costs in the wake of an unprecedented hacking of its computer network last year.

The hack attack, which the U.S. government has pinned on North Korea, resulted in the posting of the salaries of executives, Social Security numbers of employees and other private records that exposed the inner workings of a major Hollywood studio. Analysts have estimated repairing the damage will cost Sony tens of millions of dollars.

About 70 people work at the Colorworks center. The consolidation is expected to result in some job losses, although it’s not clear how many people will be affected. A representative of Sony was not immediately available for comment.

“Sony Pictures has made the business decision to close its Colorworks facility,” the company said in a statement. “We are pleased to enter into a services agreement with Deluxe to offer state-of-the-art color grading, mastering, restoration and related services for film and TV projects by studios, networks, independent producers and filmmakers at Sony Pictures.”

Projects completed at the facility include Sony’s “Michael Jackson’s This Is It,” “Zombieland” and “Cloudy With a Chance of Meatballs” in 3-D.

Deluxe, which is a subsidiary of MacAndrews & Forbes Holdings Inc., is controlled by billionaire Ron Perelman. The company in November hired David Kassler as its new chief executive officer.

Kassler is a former top executive at EMI Music and British technology store Phones 4u. He replaced Cyril Drabinsky, who has been chief executive of Deluxe since 2006.

Twitter: @rverrier