In the latest shake-up in the special effects industry, Boss Film Studios has closed its doors and ended its 15-year history as one of Hollywood's oldest, largest and most respected visual effects shops.
The 90-person studio in Marina del Rey couldn't afford to stay in business, said founder Richard Edlund, a four-time Academy Award-winning special effects supervisor known for his work on the "Star Wars" trilogy.
"We're paying for today's projects with tomorrow's profits, and I can't keep things going this way," said Edlund, whose privately held shop won Oscar nominations for seven films, including "Cliffhanger," "Alien 3," "Ghostbusters" and "Die Hard."
"We're averaging about $20 million [in revenue] a year, and it's not enough to pay the lease, pay the staff and still make a profit."
He cited increased competition from other large shops, including Industrial Light & Magic in San Rafael and Digital Domain in Venice, as well as a growing number of smaller effects boutiques. Some analysts believe the shakeout in the industry, driven in part by technical advances, will leave only a few dominant players and many small start-ups with low overhead.
Company officials also blamed the current boom in computer animators' salaries, as well as huge costs to maintain Boss' hardware supply--which includes at least 60 Silicon Graphics Inc. machines used for generating digital images.
At least 7,000 animators are based in the Los Angeles area, commanding an average salary of $104,000 a year, according to the Motion Picture Screen Cartoonists Union Local 839.
"This is a project-by-project industry that demands your product be always new and always unique," said John Dykstra, an independent visual effects supervisor who handled the last two "Batman" films. Dykstra and Edlund were among those who headed the team that worked on "Star Wars."
"Hollywood asks effects teams to provide a budget figure for something that no one knows how to do, or how much it will cost. That's an expensive gamble, especially when you may be paying someone's salary even when there's a lull in your production schedule."
Late Monday afternoon, Edlund called his staff together in the company's screening room.
"It was one of the worst days of my life," said one digital animator. "You could hear Richard getting all choked up. I've never seen him so upset."
While special effects are increasingly important for major studio films, the effects industry is a cyclical business that has been enduring a difficult period.
In June, Time Warner announced it would close its digital studios division in Burbank and lay off about 150 workers. Digital Domain and Sony Pictures ImageWorks have cut staff recently, sources said.
"This is a very vicious area, because everyone's bidding for the same projects. And historically, this is not a high-profit business," said John Swallow, vice president of production technology for Universal Motion Pictures. "If some of these companies are running on a 5%-to-10% profit margin, then they're doing really, really well."
Boss has never enjoyed a comfortable financial existence, Edlund acknowledged.
In 1995, the post-production house restructured its operations to focus on developing original entertainment properties. The firm closed its television commercial production division, laying off an unspecified number of employees.
About the same time, the firm started to concentrate its efforts on developing interactive multimedia titles through its Redmond, Wash.-based spinoff, Boss Games Studios.
The 40-person game company won't be affected by the closure, according to Colin Gordon, vice president of product development for Boss Games.
Industry experts said they were saddened by the news, noting that Boss was one of the last "old-school" shops that had been founded well before the current digital revolution.
"This is an ever-changing market, and there's a feeling of the old guard moving on," said Larry Kasanoff, chairman and chief executive of Threshold Entertainment, a Santa Monica-based visual effects house. "With the emergence of personal computers as an effects tool--and more people using them to break into this business--I think the competition is only going to get worse."
Hidden away in several of Boss' spare offices, far behind the rows and stacks of computers, sit caches of old, dusty optical equipment. Boss Film plans to auction off all its equipment, Edlund said.
But it's uncertain what will come of the company's extensive model collection.
Tucked in the middle of Boss' nearly two-acre lot, the studio's model shop houses some easily recognized objects from cinema history: the beasts from "Ghostbusters," the ship from "2010," the alien in "Species," the mountains Sylvester Stallone climbed in "Cliffhanger" and the plane from the recently released "Air Force One."