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Digital Domain Acquired By Investment Group Led by Michael Bay

Digital Domain, the Oscar-winning vfx studio and production company based in Venice, California, has been acquired for a reported $35 million by South Florida-based Wyndcrest Holdings Llc., a group led by director Michael Bay, former NFL quarterback Dan Marino and investor John Textor.

Carl Stork, a long-time senior Microsoft exec and principal of Wyndcrest Holdings, has been elected ceo and a member of the board of directors of Digital Domain, effective immediately, replacing Scott Ross, who will remain a consultant to the company. C. Bradley Call will remain president and coo. Bay and Textor will co-chair the board of directors.

Digital Domains prior owners included IBM and Cox Enterprises and founders James Cameron, Stan Winston and Ross. However, Cameron and Winston left the board several years ago over conflicts with management.

Bay, who informed the 500-member staff of the acquisition on Monday, intends to turn Digital Domain (TITANIC, THE DAY AFTER TOMORROW, I, ROBOT) into a vfx powerhouse to compete with Industrial Light & Magic, Rhythm & Hues, Sony Pictures Imageworks and Weta Digital. He will do this by making Digital Domain more director-centric. Bay is currently directing TRANSFORMERS: THE MOVIE for DreamWorks and Paramount next summer.

The acquisition comes at a crucial time amid the rising cost of visual effects for tentpole movies and the need for greater capitalization. Digital Domain can now expand into live-action, kid-friendly vfx and 3D-animated features as well as videogames.

At a time when every top grossing motion picture is relying on digital visual effects to help tell compelling and entertaining stories, we believe this translates into a bright future for companies in this field, and we believe Digital Domain represented a unique opportunity to invest, said Stork, whose accomplishments at Microsoft included leading the development of Windows 95/98. The creative and talented team at Digital Domain has a great reputation in both the feature film business and in the commercial advertising community for high-quality, award-winning work. Adding the expertise, business acumen and diverse relationships of the Wyndcrest principals will allow Digital Domain to capitalize on the rapidly expanding opportunities in the entertainment business.

Digital Domain also intends to expand its software solutions business under Stork via the companys D2 Software subsidiary, which so far has commercialized the companys Oscar-winning Nuke compositing package. Stork would like to license several other proprietary tools to support Nuke as a more ambitious compositing suite.

"The continued development of Nuke and expansion of solutions from D2 Software is a key part of the strategy for Digital Domain going forward," said Stork. "We are fully committed to this part of the business and customers can look forward to new, innovative developments for our high-end compositing and effects software.

On behalf of all involved with Digital Domain, I would like to thank Scott Ross for his remarkable contributions as a founder and leader of the company over the past 13 years, Stork added. We intend to draw on his advice and counsel over the coming years and we wish him well in his future endeavors.

Having worked with Digital Domain in the past, I am well aware of the talent and creativity of the team here, and understand first-hand why the company has a well-earned reputation for creative and high-quality work, said Bay. Rapidly evolving digital visual effects technology is going to allow motion picture directors to tell even more compelling and visually stunning stories in the future, and we believe that Digital Domain is uniquely positioned to take advantage of these new technologies, as well as new distribution channels and platforms.

Digital Domain is well-positioned with exceptional people and leading technology at a time when reliance on visual effects is increasing in every sector of entertainment, said Textor, who has known Bay since their days at Wesleyan University and has been his business partner for eight years. We look forward to combining these attributes with a renewed commitment to build the commercial and film industries leading director-centric visual effects business. Through the addition of new capital and the appropriate strategic relationships, we are also committed to the extension of the Digital Domain business into the direct development of animated films and effects-reliant live-action films.

While we all believe weve accomplished a great deal in the industry, were incredibly enthusiastic about the future as we believe this new ownership group will provide the necessary capital and strategic resources to allow us to grow our business profitably in both feature films and in advertising while retaining an environment that encourages our artists to strive for ever-greater heights of creative excellence, said Call, a decade-long Digital Domain executive who assumed the presidency of Digital Domain, as well as day-to-day responsibility for leading the company, in 2002. We know that our future depends on continuing to satisfy the creative needs of our clients in a manner, and on a budget, that other competitors cannot match, Call added.

Founded in 1993, Digital Domain ( is an award-winning full-service digital studio and production company that creates special visual effects and other visual imagery for feature films, commercials and music videos. A pioneer in digital effects, Digital Domains business units have been recognized with awards from the top industry organizations. In its 13-year history, Digital Domain has won five Academy Awards: two for Best Visual Effects (TITANIC, WHAT DREAMS MAY COME); and three for Scientific and Technical Achievement for its proprietary imaging software. The company has also been nominated for three other Academy Awards for Best Visual Effects (APOLLO 13, TRUE LIES, I, ROBOT). In addition, its excellence in digital imagery and animation has earned Digital Domain multiple British Academy (BAFTA) Awards, and Prix Arts Electronica and Prix Pixel INA awards.

Digital Domains Commercials division provides digital imagery and animation for television commercials, working with the top commercial directors. Serving Fortune 100 companies, the division has built a reputation as an innovator and industry leader in television commercial production and is the largest and most-awarded creator of digital imagery in its field. To date, it has been awarded 34 Clio Awards, 22 AICP awards, 8 Cannes Lion Awards and numerous other advertising honors. The Commercials division has also produced multiple music videos working with artists that include The Rolling Stones, Faith Hill, Creed, Janet Jackson, Busta Rhymes, Bjork, Celine Dion, Michael Jackson and Nine Inch Nails, and has earned Grammy and MTV Music Video of the Year Awards.

Digital Domains D2 Software subsidiary was established to productize the software tools developed by Digital Domain, such as the companys Academy Award-winning Nuke compositing package.

Wyndcrest Holdings Llc. ( is a Florida-based private investment and acquisition firm focused on technology-related opportunities in entertainment, telecommunications and the Internet. Wyndcrest actively supports its portfolio companies to assure the optimal positioning and deployment of associated technologies as well as the efficient execution of related business plans.

Wyndcrest is comprised of five investment principals with significant financial and legal expertise in the closure of public/private mergers, acquisitions and investments, and in the operation of large, small and start-up companies.The principals, John Textor, Michael Bay, Jonathan Teaford, Carl Stork and Dan Marino, have direct extensive experience in the disciplines of management, technology development, strategic planning, business development and investment banking.

Bill Desowitz's picture

Bill Desowitz, former editor of VFXWorld, is currently the Crafts Editor of IndieWire.