To the big foreign productions that have shot on Canadian soil, Toronto has basically been a one-horse town in terms of lab services. That is, until global giant Technicolor staked its claim in Hogtown, acquiring Command Post and Transfer, including its Toybox video and audio post and alphacine Toronto and Vancouver lab operations.

The two sides announced a pre-acquisition agreement in April. Technicolor had eyes on the Toronto market, while Command had been struggling financially for the past three years. The latter had embarked on the consolidation of several divisions and major expansion at its Toronto headquarters, while suffering from declining production volumes exacerbated by SARS. The purchase deal sees Technicolor obtaining all shares of Command at $0.04 per share, and paying up to $18 million to fund its offering price and enable Command to clear debts to its bank and shareholders Standard Broadcasting Corporation and Dome Productions. The parties say the deal is as good as done.

‘Everything is closed,’ says Claude Gagnon, Technicolor’s president of creative services Canada, who has been jetting back and forth from his Montreal home base to other North American Technicolor facilities to ensure the Toronto op fits snugly into the company’s network. ‘We own more than 98% of [Command] as of today, and we are in the process of privatizing the company. It will be 100% owned by Technicolor by the end of July.’

Although alphacine had been a player in Toronto, Hollywood producers would largely entrust their post needs, including processing, printing, dailies, sound transfer and synching, to Deluxe Laboratories and Deluxe Sound & Picture. In Vancouver, meanwhile, Rainmaker has been the facility of choice. In the case of Deluxe, no doubt there was a certain comfort level producers had with the firm’s international standing, with facilities throughout North America and Europe. This summer, Deluxe is servicing about 10 local mid-sized Hollywood productions, including the Universal prestige picture Cinderella Man, starring Russell Crowe and directed by Ron Howard.

But now that the former alphacine is under the umbrella of Technicolor, which has large labs in Mirabel, QC, North Hollywood, Rome and London, visiting producers have another globally reputable option.

There is speculation that the fact that Deluxe was getting service business in the Toronto market from Disney, a Technicolor account, particularly irked Technicolor. For example, earlier this year, Deluxe, which underwent $8 million in expansion in Toronto in the last year and a half, worked on the Disney feature Dark Water, starring Jennifer Connelly.

Gagnon doesn’t deny this. ‘Technicolor bought Toybox to be able to serve our customers and go directly where they do their work,’ he says. ‘So Toronto was a natural for Technicolor to cover the Canadian market.’

Head to head

‘We go head-to-head on many fronts,’ says Dan McLellan, EVP and GM of Toronto’s Deluxe Sound & Picture. ‘We win some and they win some. Certainly they have been much more aggressive than we have been in their post-production rollout over the last couple of years. They’ve made a lot of acquisitions and they’re making a big push in that area. On the other hand, competition keeps everybody on their toes.’

The major shakeup on the Toronto post scene in recent months will see Technicolor and Deluxe slug it out for the big service gigs, while the newly merged, all-Canadian Casablanca Magnetic North will target the domestic productions.

Andy Sykes, executive VP of the former Command, and who remains within the Technicolor fold, also sees an advantage to the rivalries.

‘The reaction that I got from

a studio manager is that it’s good to have two strong players in the marketplace,’ says Sykes, who also sits on the board of the FilmOntario lobby group. ‘It makes a statement for the city.’

Adds Gagnon: ‘People will not come to Toronto or Montreal or Vancouver because Technicolor is there, but that’s a plus. You get the infrastructure, you get Technicolor, you get the labor, the location. There are a lot of factors involved for a producer to decide to come to Canada.’

In order to help lure that producer, Technicolor may initiate some upgrades on its Toronto op.

‘We are still in the process of looking at the engineering in our lab, but sure, we want to raise the bar and make sure that our customer gets the same experience from one lab to the other,’ Gagnon says. ‘So, we will do what we need to do here in Toronto.’

Some might wonder why Technicolor hasn’t set foot in English Canada sooner, but Gagnon explains that it was waiting for the right opportunity. Acquiring a ready-made facility such as Toybox is simply far more economical than building from scratch.

Making inroads in Toronto and Vancouver follows Technicolor’s move in Montreal four years ago, when it took over Covitec, the post facility founded by Gagnon.

Technicolor is part of the France-based Thomson conglomerate, which employs 60,000 worldwide and recorded revenues of 8.5 billion euros ($13.8 billion) in 2003. Thomson encompasses: its own brand, which manufactures audio, video and communications products for European consumers; RCA, its North American sister; and Grass Valley, which makes production and broadcast systems. Thomson’s other clients include Universal, DreamWorks and Paramount.

The parent company is equipped to provide end-to-end solutions from production through distribution. Projects can shoot on Grass Valley gear and then have lab and post work done at Technicolor. Technicolor can then also strike release prints, while another division can accommodate large volumes of DVD replication. These kinds of synergies attract major studios for reasons of both efficiency and cost packaging. And with its new Canadian facilities plugged into its international network, Technicolor can easily send data from a production shooting in one center to where it is posting in another corner of the world.

As is often the case, there are growing pains associated with a change of ownership. In the case of Command, that started with the exit of a couple of directors earlier this year.

‘It was time for us to find a good, strong player in the industry who was going to now take the company into a whole new chapter,’ Sykes explains. ‘And, in order to do that, the board had a lot of work to do. Two of the independent directors felt that they would not be able to offer the sort of support they needed to… So they said, ‘Look, we’re just going to bow out.”

Then, a couple of weeks after Technicolor arrived on the scene, seven former Command managers in various divisions were let go.

‘It’s normal that when new owners come into a place, we get a different vision from the previous owners,’ Gagnon says. ‘The last three years have been very, very difficult. We need to put the company back into profit and be able to reinvest and grow.’

Of course, it is a risk to gamble so much on service volumes being strong in the Canadian production centers, but Technicolor is optimistic.

‘There are indications that in early fall there may be a couple of nice big features coming back,’ Sykes says. ‘It’s what this town has needed.’

-www.technicolor.com

-www.thomson.net

-www.bydeluxe.com