Four years ago, Philip Mellows, who had found success in the 1990s by launching and growing The Players Film Company, decided the time was ripe to make his big play – to expand the reach of his commercial production house.

His timing couldn’t have been worse.

The turn of events that has struck a series of bone-crunching blows to the commercial production industry was also just getting underway. Factors included a recession that economists believe began in early 2001, 9/11, two U.S.-led wars in the Middle East, and, by 2003, a SARS epidemic in Toronto and a strengthening dollar, all of which combined to undercut production significantly.

Of course, none of this was apparent in 1999, when the commercial production sector was in the midst of its best year ever and producers were basking in the warm glow of flush accounts and hyper-busy shooting schedules.

‘Players was a company in operation for 14 years,’ says Mellows, ensconced in the boardroom of his scaled-back west Toronto production house, rebranded Play Film. ‘It moved from $400,000 revenue to $15.6 million revenue. We did that one job at a time. We did that based on service, based on building careers and trying to go the extra mile.’

It’s easy to look back today and call Mellows’ ambition a case of hubris, but three years ago he was certainly not alone in his hunger to expand and diversify.

In a very short period, Mellows launched an interactive division, Play Media; a boutique production house, Pure Film; and, what was to be his crowning achievement, 49th Parallel, a long-form production company. Mellows also invested in post house Relish.

Today, Mellows’ would-be empire lies in tatters. Pure is closed. Play Media continues in a much-scaled-back version and The Players Film Company only exists on paper in order to pay off debt. Only Relish and 49th Parallel continue as moneymaking ventures, says Mellows.

Today, 49th Parallel, he adds, is in the black. ’49th Parallel didn’t hurt us in any way other than [affecting] cash flow. Basically, we committed to help finance the company in its first two years, and the company is profitable today. The only additional strain that 49th Parallel put on Players was the fact that it was cash out.’

But such drags on Players’ bottom line – and there were many from its various ventures – are what led to the company’s ultimate demise, including a drop in revenue from $4 million to zero at Pure and a $400,000 loss at Play Media.

But Mellows also points to incessant whispers that began last year that Players could not pay off debts as another contributing factor. ‘When the rumors initially started, it was fabrication. Did we have really deep pockets? No. But if the industry had stayed at the same pace, we were on track,’ he says. ‘We weren’t losing money at $15 million [in revenues]. Our revenue was going up and our profitability was the same.’

To illustrate the problem, Mellows points to a line of credit Players had with equipment supplier William F. White, which ultimately spun into whispers that the production company owed Whites and wasn’t paying. But Players, Mellows says, was doing over $1 million in business with the supplier, and a line of credit is not so unusual considering the volume of work Players brought to its supplier.

Compounding the already tenuous situation was the loss of two prominent production houses earlier in 2003 when Apple Box Productions and the Park City Film Company both closed their doors. ‘Now we’re in the spotlight because there are rumors about us and nobody wants to work with us. I’m not blaming our demise on that, I’m just saying that compounded our situation,’ Mellows says.

‘It became increasingly difficult,’ adds executive producer Derek Sewell. ‘You had to answer questions about the health of the company.’

But now Mellows and Sewell are trying to pay off on a disastrous 2003.

In August, they closed Pure and, coming full circle, moved out of Players 12,000-square-foot offices into the considerably smaller Pure HQ, which had been Players original home. The newly launched Play now operates with an overhead of just 25% of Players’ overhead last year, says Mellows.

Play’s new roster features some old names from Players and Pure plus a few key additions, including marquee director Jean-Marc Piche, who started his career with Players years ago. Other directors include Christina Hodnet, Adam Massey, Stephen Scott and Carl Harvey.

Mellows and Sewell, along with business manager Ivan Boddy, have been meeting with creditors to bring them up to date and reassure each one that the company will make good on its outstanding debts. Mellows also insists that back pay owed to crew will be paid out, but coming to terms on that end is more difficult since there is no single body to which Mellows can turn to negotiate.

‘We could close [Players] today and basically do what everybody says we’re doing and walk away. That would be the easy way out. That’s what the word on the street is,’ says Mellows.

‘Players is open for one reason and one reason only. There’s no upside for any of us right now to keep Players open. The only upside is that we’re doing the right thing. We’re only as good as our integrity and our honor. Some people may think that it’s funny that we’re talking about integrity and honor, but we’re trying to do the right thing trying to settle every single obligation to the best of our ability.’