Thursday, August 11, 2016

Jam Filled Entertainment Negotiates to Buy Arc

The Globe and Mail has another article behind a pay wall, providing some details.  Deloitte, the receiver, ran an auction to purchase the rights to Arc's continuing projects.  Jam Filled Entertainment, an Ottawa studio bought just weeks ago by Boat Rocker Media, won the auction.  However, the deal has to be approved by the court and Jam Filled will be doing additional due diligence before the deal is concluded.

One part of the deal is that enough of Arc's former employees are willing to return to the projects they were working on.  The hope is that the deal can be finalized within the next two weeks.

As of now, there are many questions.  I assume that the work will stay in Toronto.  If they're looking to rehire Arc employees, it's going to be easier to do this without asking them to move to Ottawa.

While the deal obviously includes contracts for the work and the files created so far, does it include the hardware that the files are sitting on?  Will they occupy Arc's former space or move to another location?  Software licenses are not always transferrable.  Will Jam Filled get rights to the licenses as part of the deal or will they have to purchase new ones?  Which clients will be willing to continue their projects with Jam Filled and which will prefer to move them elsewhere?

Will there be pay cuts for returning employees?  How much?  Will they be across the board, meaning that everyone rehired gets the same percentage of their former salary, or will salaries be negotiated from scratch?

Who will be managing all this?  As Jam Filled is located in Ottawa, will they be sending a management team to Toronto?  Will they be hiring local management talent?  As management was the source of Arc's problems, hiring the right team will be critical to the success of the salvage operation.

Will Jam Filled continue the facility, assuming it is in Toronto, once the existing contracts are completed?  That may not be decided until projects are delivered and the balance sheet is scrutinized.

While Jam Filled's acquisition, assuming it goes through, is certainly good news, much more will have to be answered before this can be called a success or failure.  Good luck to everyone.


Nancy said...

This would be a sensible way of disposing of Arc since the projects were subcontracted and need to be completed. You have raised some good questions. We shall have to wait and see what happens next.

Barry A Sanders said...

I think another question is; Will Jam-Filled move to Toronto? It seems difficult to manage a satellite studio 5x larger than home base from a remote location. I also wonder if they will change the name.

JPilot said...

When DKP purchased Calibre from Alliance Atlantis, it was a dismantling and selective re hiring, but it was all still in Toronto. When Cinar was purchased, it was rebranded Cookie Jar and moved to Toronto from Montreal.

Mark Mayerson said...

Barry, moving a production in progress is a hellish endeavor. I can't see Arc moving to Ottawa and I can't see Jam Filled moving to Toronto. I would think that Jam Filled would send at least one management person to Toronto so that they can get an unfiltered view of how production is going. If they decide to keep Arc alive beyond the current contracts, that's the time to decide whether or not to consolidate facilities. There's something to be said for running facilities in both cities as you can draw on a bigger pool of talent.

Mark Mayerson said...

JPilot, one reason Cookie Jar was moved was that Michael Hirsh lived in Toronto and didn't want to relocate. I guess that's an argument for moving Arc to Ottawa, but it's going to make it tougher to rehire the crew if a relocation is involved.

Anonymous said...

I have the feeling that it will be an uphill battle for the new owners to rebuild the trust of the former Arc employees after such a public turn of events.
But, it is good news to hear that there is a semblance of light at the other end of the tunnel.

CDAnim said...

Having worked with the management team on a few different projects, I'm pretty confused by this all. I can't in any way see how the current management could handle this growth. They will definitely need to bring in some more management who are able to deal with a company this size.

Also seems so strange as all these moves seem to go completely against what the Jamfilled way of thinking was, to be a small close knit company that worked on projects that got them excited. Not to just take work to keep the lights on. Seemed like a bit of a pipe dream, but this is going in the complete opposite direction. Makes me think something else led to them selling to Boat Rocker and this is more of a Boat Rocker deal than a Jamfilled one.

Hope I'm wrong for all involved. Jamie and Phil are good guys, and they've got a good crew that deserves to see the company they helped build continued success. Hopefully they aren't getting swallowed by something much bigger than they can handle.

Mark Mayerson said...

CDAnim, I don't know the Jam Filled people, but I think you make a very good point. Fast expansion has been the bane of many studios, and this would be complicated by distance if the work stays in Toronto.

I'm hearing rumours that Blazing Samurai has departed for another studio. That might be a blessing for Jam Filled, as it cuts the amount of work and keeps them in TV where they're comfortable.

Anonymous said...

Mark, can you expand on the rumours that Blazing has moved on? To my understanding, Mass Media wanted to keep the Blazing in Toronto; that being said, they could have chosen to go elsewhere. Arc has the assets for blazing, as well as the talent to do the project. What happens to those assets?

Mark Mayerson said...

I can't expand on the rumour as it's only a rumour. If I knew it for certain, I'd say it. Sooner or later, somebody at a studio will say they're working on Blazing Samurai and we'll know where it's being produced.

My guess is that the assets belong to the client as they have paid for them.

Anonymous said...

Come on people, Jam Filled is operating under a very different format than anyone else in Canada, they pay all of us artists by the frame, Ottawa is known as a market where wages are much lower than anywhere else in the country, when I left Ottawa I got an offer from Arc that was too good to be true and I passed on it, they proved me right! Arc was not sustainable because they grew so fast, they had no expertise managing big teams, they overpaid people and underbid on projects. Jam Filled growing from 80 artists to 400 in 2 weeks??? they are NOT doing this for the love of the artists, this is greed at its best, they take the projects, cash in and scale down quickly so they don’t go under like Arc. At the end it’s nave artists who will pay the price. Lots of great studios hiring, go find a new home!

Ktop said...

Hello everyone,
I've worked at Jamfilled since the near beginning and just want to give some perspective from a person who works there.

I have over 10 years experience in Ottawa and can honestly say that jamfilled has been a great experience. Their desire was to make a studio that they would want to work at. I think they did that. The people that work there are great. You aren't just a number and attitude is part of the hiring process.

Everything that's happened was not out of greed, it was out of circumstance. They're doing all this because they believe it will help them achieve the goal of making a studio that people want to go to every day.

I'll close by saying it has been a rough ride, but we knew it would be. The owners put everything on the line for the company and I'm very happy for them. I hope everything works out for everyone.



CDAnim said...


You're right. They set out to create a studio that people would want to go to every day. Which was a great unique vision different from all the other studios that set out to create a studio that people wouldn't want to go to every day. This is exactly the kind of naive thinking that the previous comment was talking about.

How is it that everything that happened isn't out of greed but out of circumstance? The company that wanted to be the small place, sold out at the first chance they had. There's only two reasons that would happen. Either they wanted the money, which would be greed, or they needed the money. If they NEEDED the money, then the big question is, why? Mismanagement? Overspending? Both? So then how do they do a better job with ARC than the previous management? Is Kyle the super secret business savant that the industry needed?

I moved on from Ottawa a few years ago, so I don't have a dog in this fight, but think it's important people are aware of this big waving red flag. Something's up. You can't tell me that the goal for JamFilled this year was to be bought and then turn into a massive corporation. There's no way. So how can artists trust that they'll know what to do with such a big responsibility?

Ktop said...

Thank you CDAnim for responding to my comment.

I've had jobs where it was hard to get out of bed to go to work because I disliked it so much. That's what the statement "A place people would want to work at" meant.

Secondly, Jamfilled never said it wanted to be small. As for the comment about there only being two reasons they would have done what they did, that's incorrect. There's only two reasons you can see.

Thirdly, getting this big was a goal, but doing it this quickly was due to the circumstances like I said. The challenge will be in getting the right people.

Finally, all I can say is this: the mission statement stays the same. "A place that people want to work at".



CDAnim said...

Ktop, Happy to hear you're able to get out of bed. Unfortunately, nothing that you said actually sheds any light on the situation. If you have insight, could you please share with us why they would have sold in the first place? To me, the two options I presented make a lot more sense than the idea that one would sell their company with the dreams that once it's sold the company would get even bigger without them owning it and them simply being employees.

The bigger issue here is that there are potentially hundreds of employees who are being asked to put their faith into a company who according to you, has a mission statement of wanting to be "A place that people want to work at". Something I'm sure ARC wanted to be and something every other studio wants to be. It's a good goal to have, but what is there beyond that, that says someone should trust that Kyle Mac Dougall has any idea how to run a company that size and or fix its problems?

Anonymous said...

The fact remains that despite the good news involving acquisitions and such, those that stand to benefit the most might be those higher up. Chances are that when everything settles everyone will be happy for the time being, but this certainly puts things on shakier round for the regular worker. You've gone from a home-grown studio with a family feel to being owned by a massive corporation with it's own intentions, meaning you now are a small facet in a large machine. I do hope things work out and are profitable for everyone, but I do fear that the profit will lie in the hands of those making the big decisions. The more cows you own the more it becomes difficult to name each of them and tend to them equally. This company is now massive and it will be a big mess to clean up.

I am hopeful though, things should be good. It just sucks to now represent the epitome of "corporate" when trying so hard no to be. Good luck!

Anonymous said...

"The fact remains that despite the good news involving acquisitions and such, those that stand to benefit the most might be those higher up. Chances are that when everything settles everyone will be happy for the time being, but this certainly puts things on shakier round for the regular worker"

That's why I made the comment earlier on. What was known as Arc (formerly DKP, ADT then Starz) lost the trust of it's employees. Who would want to work for this studio? Granted, it is new owners and a different management (if the deal goes through), but I still think they have an uphill battle to try to regain any trust from future employees.


Anonymous said...

The press release from Boat Rocker says they wanted to expand their capabilities into high quality 3D animation after acquiring Jam Filled. The death of Arc allows them to scoop up a studio with all that infrastructure and staff already in place. Perhaps Jam Filled will continue to run 2D operations as usual in Ottawa while Boat Rocker finds the management talent for handling production in Toronto for their 3D productions. Boat Rocker already owns Industrial Brothers in Toronto, so maybe they'll assign some of those guys to oversee whatever Arc turns into.

James said...

Yes, they get to scoop up a studio with infrastructure, but they get all of the problems as well. Let's be honest, the idea that Kyle M is gonna be the captain that rights the ship is laughable. Boat Rocker is going to HAVE to bring in others to assist him because there's no way he's not already over his head. Not sure the people will be from Industrial Bros. though as Boat Rocker doesn't fully own them. This seems like the kind of situation that if you don't know Kyle, you'd think there's a chance but once you work closely with him for a day you wouldn't want to touch with a 10ft pole.

Anonymous said...

Maybe Fairfax Financial Holdings Ltd. calls the shots.

Toronto-headquartered insurance and investment firm Fairfax Financial Holdings Ltd., which has a majority stake in Boat Rocker, as well as minority stakes in other major Canadian media companies.


Anonymous said...

"Let's be honest, the idea that Kyle M is gonna be the captain that rights the ship is laughable."

.. No it's not. You actually think he's going to do everything alone? Don't be silly.

"This seems like the kind of situation that if you don't know Kyle, you'd think there's a chance but once you work closely with him for a day you wouldn't want to touch with a 10ft pole."

What a lovely hyperbolic statement with no hint of truth to it. Obviously YOU don't know Kyle because he's been a great manager during my time at Jam Filled. It's the best studio I've worked at. The shade being thrown towards Jam Filled is completely unwarranted.

Obviously there will be challenges going forward as things transition. Obviously there are differences in how a 2d studio and 3d studio are operated. Jam Filled management isn't oblivious to this fact.

Anonymous said...

"The death of Arc allows them to scoop up a studio with all that infrastructure and staff already in place."

That staff you're talking about.....yeah, they are applying and getting jobs at other studios right now! I know of a number that already got jobs. And the international former employees, well, not sure if they will be able to stay in Canada much longer.


james said...

"Obviously YOU don't know Kyle because he's been a great manager during my time at Jam Filled. It's the best studio I've worked at. The shade being thrown towards Jam Filled is completely unwarranted."

Actually, I've worked with Kyle at 3 different studios. The last one being Jam Filled. I listened to him the first two times when he passed blame away from himself about why there was no money for overtime and schedules were crunching. When it happened again at JF, I realized the truth and moved on.

As far as "throwing shade" at Jam Filled, I'm not. Listening to people I know that work there they like the small perks that they throw around to try and keep morale up. But at the same time, that's what Arc seemed to do a good job of and we see how that ended up.

The reason I'm commenting at all is to simply make people aware and maybe dig a little deeper before counting on him too much. Especially for people who might be turning down or not looking for new work in hopes that Arc is going to suddenly re-emerge and everything be just like is used to be.

Anonymous said...
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Anonymous said...

Speaking as a non-higher up person who is working for or has worked for JF; Early on, sure the place seems great, you get that small close-knit family feel. The perks they give aren't asked for and at aren't necessary, but they are appreciated. However over this past while I have slowly noticed a transition from that close-knit family feel to something more of corporate vibe that seems to differ from how it was early on. Possibly through faster than normal-growth & change of the actual studio area to make room for more employees. When the acquisition happened, there where multiple talks about how this would change nothing and everything would remain the same day to day. I can sort of agree with other peoples opinions about questioning to jump at selling the company. I have insight from both sides; I know the financial backing aids Jamfilled to aim for a goal of being able to fund and produce their own work someday, now possibly sooner. However in my own opinion I think that it's possible we would have gotten there eventually on our own legs, it would just have taken us a lot longer. Shortly after the ARC situation happened and we grew by another 200-300 people in another city. Don't get me wrong I love the place; it's just sometimes you get the feeling that things aren't quite the same as they were initially and they're slowly drifting a couple of feet apart from the original JF philosophy.

Anonymous said...

People aren't concentrating enough on Boat Rocker Media. They're the ones that own Jam Filled, so they control the cash flow and have to supply investors with dividends and growth. I noticed this when I went from a small 2D studio with one owner to a larger studio with a parent company. The small studio would have beer and pizza Fridays, whereas the larger studio was much richer but cut every corner and gave no perks to staff. This was because the privately owned company was in control of its own budget and could give back to artists, whereas line producers at the larger company had to justify every expense to parent company accountants. One line producer even argued with animation supervisors about if we really deserved free coffee.