Oscar-winning VFX house Rhythm & Hues is to “take an emergency $20 million capital infusion from three major Hollywood studios in order to keep its doors open through April”, TheWrap is reporting.
The site reports that after April, the company is expected to be sold to India-based Prime Focus, which already owns a number of studios in the US, Canada and the UK.
A short-term cash crunch?
Variety’s David Cohen reports that the studio has plenty of work scheduled, and that the issue results from a short-term cash crunch following the cancellation of part of a single VFX contract.
As yet, none of the parties said to be involved has released an official statement.
If confirmed, the news will come as a worrying reminder of just how financially precarious the visual effects industry is, following high-profile recent cases such as Digital Domain’s bankruptcy and subsequent sale.
As Cohen comments: “R&H has led the way in offshoring VFX, with two facilities in India, one in Malaysia, one in Taiwan and one in Vancouver. That a highly respected company that’s been so aggressive about pursuing tax incentives and lower labor costs abroad could get into such a cash crunch is alarming VFX pros.”