Digital Domain is not operating profitably and the company has a huge load of debt, in part because of the $18 million they've invested in Ender's Game. In late August the company's debt holders demanded their money back, but the company didn't have the cash, so they formed a committee to review all of their options. What this committee came up with is to streamline operations, close the Florida studio, and focus on its core business of creating visual effects and digital content: Digital Domain Productions.
What does this mean for the Ender's Game film?
However, the story is likely not over as the motivation of the debt holders to ask their money back at this time is unclear. The Ender's Game film is set to be a box office success, and while profits for Digital Domain from this franchise won't come in before 2014, they will be significant. The company said back in April that with $250 million domestic box office they will make $43 million in profits, and to quote DDMG's now former chairman John Textor, "I wouldn't say [those numbers] are on the high-end."
Here are some more interesting tidbits about Ender's Game and Digital Domain that haven't been widely reported yet (Source: DDMG Q4 2011 Transcript):
1. Digital Domain's 37.5% interest in the franchise "gives us rights to the first film, the sequel, certain gaming rights, and obviously we hope a future that goes well beyond that." Note that they are not talking about a possible sequel here. Words are powerful in the financial world, and if the production team wouldn't have had a sequel in mind from the very beginning, Textor wouldn't have worded it like this. Of course, the final decision for a sequel will depend on the box office success of the first film.John Textor, Chairman and CEO of Digital Domain Media Group, resigned from all his positions with the company on Friday as he is "in profound disagreement" with the decision to close the Florida studio. It is unclear how this resignation will effect Textor's status as Executive Producer of the Ender's Game film. He said he intends "to stay actively involved as a shareholder of the Company."
2. "We took a test piece [for Ender's Game] to the Cannes Film Festival, showed it to a roomful of people, and within a very short amount of time had really sold out pretty much every country in terms of foreign distribution." The film was pre-sold to foreign for about $44 million, that is about 40% of the total production budget.
3. Ender's Game "seems to be positioned very well to be a tent-pole production. It will look like one of the biggest films you've ever seen." If you read between the lines of Digital Domain's statements, anything below $200 million domestic box office would be seen as a disappointment. And while there are no words from Lionsgate about expectations, I wouldn't be surprised if they secrectly hope to beat the $408 million The Hunger Games has brought in domestically, the studio's biggest success in history. After all, the Ender's Game cast is much higher profile in terms of Academy Awards and Oscar nominations.
DDMG is currently looking to appoint a new Chairman and CEO, while Ed Ulbrich, also an Executive Producer of Ender's Game, has been promoted to Chief Executive Officer of the company's core subsidiary, Digital Domain Productions.