Cartoon Brew: Technicolor, Owner Of Mikros Animation, MPC, And The Mill, On Brink Of Total Collapse
Update: Technicolor and its companies in the UK have now gone into administration, with 440 job losses
If so, it’d take out pretty much all of MPC, The Mill and many other studios that Technicolor acquired over the years. Having worked at MPC between 2001 and 2008, where the company changed hands between Carlton Communications and Technicolor, it was a generally good period. But after a couple of years, I remember that Technicolor filed for Chapter 11 protection and their troubles really didn’t get much better ten years later.
I decided to plug in this query into Perplexity AI’s Deep Research model and here’s what it had to say – and I love the quote “Global head of underpants”. Again, the output here is verbatim from Perplexity. Make of it as you will – its sources are quoted at the bottom.
If you want to read more about the “workforce retention” – I’d suggest a visit to Reddit’s VFX subreddit. My own experience getting back into VFX a few years ago involved interviewing directly at Technicolor (not at MPC), and it was an absolute shitshow from start to finish. This was a company, to me, that couldn’t organise a piss-up at a brewery or even at any of the local pubs in Soho of which there are plenty.
The Challenges Faced by Thomson/Technicolor Following the Acquisition of MPC
The acquisition of The Moving Picture Company (MPC) by Thomson (later rebranded as Technicolor) in 2004 marked a strategic expansion into visual effects (VFX) and post-production services. However, the integration of MPC into Technicolor’s portfolio exposed systemic issues that culminated in severe financial and operational challenges, ultimately leading to the company’s near-collapse in February 2025. This report examines the multifaceted problems that emerged post-acquisition, including financial mismanagement, labor inefficiencies, cultural integration failures, and external market pressures.
Financial Instability and Restructuring Failures
Overleveraging and Unsustainable Debt
Thomson’s acquisition of MPC for £53 million ($102 million) in 2004 was part of a broader strategy to dominate the VFX and post-production markets[3]. However, the financial burden of integrating MPC into Technicolor’s existing structure strained the company’s resources. By 2022, Technicolor Creative Studios (TCS), the division housing MPC, reported plummeting profitability, with EBITDA forecasts slashed from €120–130 million to €45–65 million due to mounting debts and operational inefficiencies[2]. The 2020 Chapter 15 bankruptcy filing further highlighted liquidity crises exacerbated by the COVID-19 pandemic, which disrupted film production and delayed revenue streams[5][13].
Failed Restructuring and Investor Reluctance
Despite repeated restructuring efforts—including the 2022 spin-off of TCS as an independent entity—Technicolor struggled to attract long-term investors. The company’s reliance on short-term financial injections from private equity firms like Farallon Capital and Pimco failed to address underlying structural issues[8][13]. By 2025, Technicolor admitted it had exhausted all options, stating, “Despite exhaustive efforts—including restructuring initiatives, discussions with potential investors, and exploring acquisition opportunities—we have been unable to secure a viable path forward”[1][6].
Operational Inefficiencies and Labor Challenges
High Attrition and Talent Drain
MPC’s integration into Technicolor was marred by chronic underinvestment in workforce retention. Technicolor reported attrition rates exceeding 30% in 2022, driven by low wages, excessive overtime, and a toxic workplace culture[2][16]. Employees frequently cited mismanagement, with one Reddit user noting, “Everyone I know who’s been around Technicolor hated it and wouldn’t work for them again”[2]. The lack of competitive compensation led to a talent exodus, leaving MPC unable to meet project deadlines or maintain quality standards[2][14].
Inefficient Bidding Model and Profit Erosion
Technicolor’s reliance on underbidding competitors to secure blockbuster contracts created a “race to the bottom” in pricing[16]. For example, MPC’s work on Disney’s The Lion King (2019) and Mufasa: The Lion King (2025) involved thousands of VFX shots bid at unsustainable rates[1][16]. This model, compounded by fixed-fee contracts, ensured projects rarely turned a profit. As one insider noted, “MPC was notorious for taking on work that was guaranteed to lose money just to keep the lights on”[16].
Cultural and Integration Failures
Clash of Corporate and Creative Cultures
The merger of MPC’s artist-driven ethos with Technicolor’s corporate hierarchy led to friction. Employees criticized the proliferation of redundant managerial roles, such as “global head of underpants,” which diverted resources from frontline creatives[2][16]. The 2022 merger of MPC Advertising with The Mill—intended to streamline operations—instead diluted brand identity and alienated clients who valued specialized studios[10][16].
Inadequate Post-Acquisition Support
Technicolor’s failure to integrate MPC’s UK and global operations into a cohesive framework resulted in siloed teams and duplicated workflows. For instance, MPC’s London and Los Angeles studios operated independently, leading to inconsistent quality control and communication breakdowns[3][10]. The lack of centralized oversight was particularly damaging during the 2023 writers’ strike, which exposed Technicolor’s inability to pivot resources across divisions[6][13].
External Market Pressures
Impact of Industry Disruptions
The COVID-19 pandemic and subsequent Hollywood strikes (2023) exacerbated Technicolor’s financial woes. Production halts led to a 40% drop in revenue, while the shift to streaming platforms reduced demand for theatrical VFX work[6][13]. Technicolor’s reliance on traditional film studios left it ill-prepared for the streaming era, with one analyst noting, “The company remained too focused on mainstream filmmaking while reliable revenue shifted to streaming”[9].
Competition and Technological Shifts
The rise of AI-driven VFX tools and boutique studios further eroded MPC’s market share. Smaller firms like Framestore and DNEG adopted agile workflows and competitive pricing, while Technicolor lagged in technological innovation[14][16]. A former employee remarked, “Executives were oblivious to AI’s impact, even as Marvel’s demand for human-driven VFX declined”[16].
Conclusion: A Legacy of Mismanagement
Technicolor’s acquisition of MPC exemplifies the pitfalls of aggressive expansion without sustainable planning. Financial overextension, poor labor practices, and an inability to adapt to industry shifts transformed a once-dominant studio into a cautionary tale. As the VFX sector moves toward unionization and ethical labor practices, Technicolor’s collapse underscores the need for systemic reform in how visual effects companies balance artistry, profitability, and worker welfare[2][16].
The company’s final communication to employees—a somber acknowledgment that “Technicolor is more than just a company, it is a community”—serves as a poignant epitaph for a failed vision[6].
Sources
[1] Technicolor-Owned VFX Firm MPC May Shutter Due to ‘Severe … https://variety.com/2025/film/global/technicolor-vfx-mpc-shutter-severe-challenges-1236316354/
[2] Technicolor Creative Studios issues profit warning and stock loses … https://www.reddit.com/r/vfx/comments/yxoe8q/technicolor_creative_studios_issues_profit/
[3] Thomson Set To Buy MPC From ITV For $102 Million – SHOOTonline https://www.shootonline.com/article/thomson-set-buy-mpc-itv-102-million/
[4] Technicolor To File For Administration In UK With Company On Brink https://deadline.com/2025/02/technicolor-administration-receivership-job-losses-1236299805/
[5] Vantiva – Wikipedia https://en.wikipedia.org/wiki/Vantiva
[6] Live Updates: Technicolor, Owner Of Mikros Animation, MPC, And … https://www.cartoonbrew.com/business/live-updates-vfx-industry-on-edge-as-technicolor-owner-of-mikros-animation-mpc-and-the-mill-on-verge-of-total-collapse-245995.html
[7] Thomson Reuters completes acquisition of integration point https://www.thomsonreuters.com/en/press-releases/2018/november/thomson-reuters-completes-acquisition-of-integration-point
[8] Technicolor ‘in talks over sale’ – TVBEurope https://www.tvbeurope.com/business/technicolor-in-talks-over-sale
[9] Technicolor, Parent Company of The Mill, MPC, and Mikros, Facing … https://www.lbbonline.com/news/technicolor-parent-company-of-the-mill-mpc-and-mikros-facing-potential-closure
[10] MPC Advertising to merge with The Mill | News – Broadcast https://www.broadcastnow.co.uk/tech/mpc-advertising-to-merge-with-the-mill/5166534.article
[11] [PDF] Cross border M&As in emerging market – Lund University Publications https://lup.lub.lu.se/student-papers/record/1625324/file/2435757.pdf
[12] David Patton joins MPC and The Mill owner – Campaign https://www.campaignlive.co.uk/article/david-patton-joins-mpc-mill-owner/1583458
[13] Technicolor: “Majority Of 440 Employees In The UK Made Redundant” https://deadline.com/2025/02/technicolor-440-employees-made-redundant-company-faces-global-implosion-1236300121/
[14] Analysis of Technicolor Restructuring, and a Serious Discussion … https://devoncroft.com/2020/10/28/analysis-of-technicolor-restructuring-and-a-serious-discussion-about-post-production/
[15] VFX Giant MPC and Parent Company Technicolor May Shut Down … https://www.reddit.com/r/movies/comments/1iwqr0j/vfx_giant_mpc_and_parent_company_technicolor_may/
[16] Technicolor likely closing all US operations as of Monday 24th Feb https://www.reddit.com/r/vfx/comments/1iv7wo8/technicolor_likely_closing_all_us_operations_as/
[17] Technicolor set to enter administration – TVBEurope https://www.tvbeurope.com/business/technicolor-set-to-enter-administration
[18] Technicolor Out of the Grading Business | Lift Gamma Gain http://www.liftgammagain.com/forum/index.php?threads%2Ftechnicolor-out-of-the-grading-business.15425%2F
[19] VFX Giant MPC and Parent Company Technicolor May Shut Down … https://www.aol.com/vfx-giant-mpc-parent-company-163627560.html
[20] M.2336 – THOMSON MULTIMEDIA / TECHNICOLOR https://competition-cases.ec.europa.eu/cases/M.2336
[21] Major Players in VFX M&A – HDRI Consulting https://www.hdriconsulting.com/timeline-posts/vfx-mna
[22] Technicolor Announces Important Shareholder Meeting, Former … https://www.reddit.com/r/vfx/comments/1361n0a/technicolor_announces_important_shareholder/
[23] Technicolor Sells Off Thomson Video Networks https://www.streamingmediaglobal.com/Articles/News/Featured-News/Technicolor-Sells-Off-Thomson-Video-Networks-74247.aspx
[24] Thomson Renamed Technicolor, As Restructuring Plan Approved https://www.nexttv.com/news/thomson-renamed-technicolor-restructuring-plan-approved-258507
