By Brian Diedrick
NEW YORK—As first reported in last week’s "Street Talk" (8/16, p. 22), after approximately a year in existence, Creative Content Artists (CCA)—a holding company for a number of New York audio and video postproduction houses—is ceasing operations. With only one exception, all facilities under the CCA banner have been closed. At press time, SHOOT confirmed that the lone CCA shop still open for business was audio post facility Lower East Side, New York.
In January, CCA shuttered longstanding New York-based postproduction/visual effects house Post Perfect ("Street Talk," 1/25, p. 38). Since that time, the New York companies shut down by CCA include post/visual effects houses arc.light editorial, Liquid Labs, cyclotron and Crush Digital Media, in addition to music/audio post houses Superdupe Recording, East Side Mix and Barasch Music & Sound.
Last month, attorneys representing CCA sent a notice to the company’s creditors. SHOOT obtained a copy of this letter from one of the aforementioned CCA shops to which CCA owes money. The letter from the law firm of Davidoff & Malito, New York, Albany, N.Y., and Washington, D.C., related that CCA has entered into an agreement with its principal secured creditor, LaSalle Business Credit—a subsidiary of Chicago-based LaSalle Bank, which is itself an indirect subsidiary of Netherlands-headquartered ABN AMRO Bank, N.V.
Per that agreement, CCA, continued the letter, "will voluntarily surrender the net proceeds of the sale or other disposition of all its assets (except those covered by secured equipment leases) to La Salle in lieu of the filing of a formal bankruptcy. Regrettably, we do not believe there will be any proceeds beyond those which are covered by LaSalle’s security interest to satisfy the claims of other creditors."
Via phone, SHOOT connected with an associate attorney at Davidoff & Malito, who confirmed that CCA owes LaSalle roughly $12 million—and of that sum, it is estimated that CCA will be able to return somewhere around 30 cents on the dollar. The associate, who spoke under the condition of anonymity, added that CCA would not be in a position to offer any payment to a secondary secured creditor, whose identity he declined to disclose.
SHOOT could not ascertain the full amount of CCA’s debt. Such info would be a matter of public record if a bankruptcy declaration had been filed. The Davidoff & Malito associate noted, however, that there are upwards of 500 unsecured creditors. The law firm staffer would not comment on the total amount of money those creditors are owed by CCA.
BURNING AMBITION
CCA was launched last June as Burning Suits, LLC, with Washington, D.C. lobbyist David Carmen leading a group of investors as chairman of the board. Burning Suits opened with the purchase of the New York Media Group (NYMG) of companies—the parent of such longstanding aforementioned shops as Post Perfect, Lower East Side, East Side Mix, Superdupe, Crush and arc.light. In the aftermath of Sept. 11, the Burning Suits moniker was changed to CCA.
Carmen also served as an advisor during the founding of Anonymous Content, the bicoastal production house headed by CEO Steve Golin. However, Carmen is perhaps best known as president/CEO of The Carmen Group, a Washington, D.C.-based lobbying firm. One of that organization’s most noteworthy projects was the production of the 1988 presidential campaign ad "Weekend Passes," a.k.a. the "Willie Horton" spot. "Weekend Passes" proved to be one of the most influential political ads in history, helping then Vice President George Bush win that year’s election. The Carmen Group produced that commercial for two independently affiliated political advocacy groups: the National Security Political Action Committee and its Americans for Bush arm.
SHOOT placed phone calls to Carmen and an attorney associated with The Carmen Group, John H. Ladd, regarding CCA. Those calls had not been returned at press time.
To run CCA, Carmen brought in industry veteran Steve Hendricks last year to serve as partner/CEO. Hendricks previously headed the former Virgin Digital Studios (VDS) group, which included such postproduction facilities as London-based Rushes and West One, Virgin Television de Mexico, Mexico City, and now defunct 525 Studios. Hendricks was a founding father of 525. (In ’00, Four Media Company, which is now known as Liberty Livewire—headquartered in Santa Monica—bought 525, Rushes, West One and Virgin Television de Mexico from the London-headquartered Virgin Media Group; SHOOT, 5/26/00, p. 7.)
In its first major deal after the purchase of NYMG, CCA acquired New York-based Barasch Music & Sound from its founder, Mark Barasch, in Nov. ’01. In exchange for selling his 11-year-old company, Barasch gained an equity position in CCA and became one of its partners. He was also named president of Octopus’ Garden—a newly formed CCA division under which resided all the parent company’s audio operations: Superdupe, East Side, Lower East Side and Barasch Music & Sound.
However, by this time, CCA’s audio holdings were already beginning to lose some name talent. In early November, mixer Bob Giammarco left Lower East Side for Photomag, New York. He was joined there by Tom Goldblatt of East Side Mix.
Soon after the formation of Octopus’ Garden, four denizens of Superdupe—mixers Glenn Navia, Henri Perotti and Bill Smith, as well as music director Andrew Knox—left that company for HSR, New York. And in short order, mixer Mitch Raboy and operations manager Lydia Perez also left Superdupe—both moving over to Parallax Audio Post, New York.
Meanwhile, there was tumult on the video side of CCA, as well. Closing down Post Perfect in January of this year, CCA planned to succeed that post/ effects facility with what it billed as a digital-oriented content studio. That studio, which CCA intended to build in the vicinity of Manhattan’s Union Square, failed to materialize.
Also in January, arc.light editorial’s founder Dana Bol left that operation, dissatisfied with CCA’s management. The departure of Bol was seemingly the beginning of the end for arc. light, which closed soon thereafter. Asked to elaborate on her reasons for leaving the company, Bol noted, "I was not pleased with the bill-paying speed for my suppliers." Bol has since launched editing boutique Tall Girl, New York (SHOOT, 8/16, p. 8.)
Finding himself in a similar situation to Bol was the former president of Crush Digital Video, Jeff Stabenau. Having founded Crush in 1996, Stabenau, like Bol, was dissatisfied with CCA’s handling of his company. Stab-enau left Crush late last year, and eventually teamed with Santa Monica-headquartered Liberty Livewire to form New York-based Blink Digital-like Crush, a content preparation service focusing on DVD authoring. (SHOOT, 5/3, p. 13.)
CCA kept Crush open following Stabenau’s departure, but "they closed about seven weeks ago," remarked Stabenau. "They let everyone go and pulled the plug."
Commenting on his relationship with CCA, Stabenau maintained, "I think they were sincerely interested in developing the group of companies [they acquired] into an advanced postproduction industry. … But from when they first started looking at [NYMG]—say at the end of 2000—to the time they concluded the deal [June ’01], things had changed and slid and expectations were different. Victor Mulholland, the colorist, had left Post Perfect already. [He went to R!OT Manhattan’s telecine operation, which later became part of Company 3, New York.] And there were events that were impacting the business even as they were buying it."
"Ultimately, Post Perfect being the biggest component of the operation, they [CCA] felt like they weren’t able to turn it around and develop that into something new. And that pulled everything else down with it," Stabenau speculated.
"I think that [Hendricks] was in a difficult position too—he was brought into to run something that was undefined," continued Stabenau, "and he didn’t have [CCA’s] support either."
CEO Hendricks departed CCA in February. SHOOT reached him via phone, but he declined comment.
Many of the sources SHOOT spoke with agreed that CCA was unable to come through with the money required to bring its plans to fruition. CCA had assumed NYMG’s significant operating debt as part of the agreement between the two companies. And CCA wasn’t able to dig itself out of that hole. Corroborating that assessment of what went wrong at CCA was Barasch.
"David Carmen saw a distressed company [in NYMG], and made the judgment that if he took it over and capitalized it, [it could be turned around]," said Barasch. However, that capitalization, continued Barasch, didn’t come to pass.
Other reasons Barasch cited as contributing to CCA’s problems were a difficult postproduction business climate and the effects of Sept. 11 on commercial production and postproduction. Barasch also noted that Carmen and company were for the most part not established hands-on, day-to-day players in the commercial production and post industry. "They didn’t have a certain understanding about the way things worked," contended Barasch.
"[Carmen] is not from the business, and he did his best to get an understanding of it," continued Barasch. "But he didn’t really stick to some of the protocols about vendor client and relationships that happen in the [commercial production and post] business."
Barasch, who’s cut all ties to CCA, is gearing up to announce a new venture soon. As SHOOT went to press, he declined to discuss his plans in detail.
Google Opens Its Defense In Antitrust Case Alleging Monopoly Over Online Ad Technology
Google opened its defense against allegations that it holds an illegal monopoly on online advertising technology Friday with witness testimony saying the industry is vastly more complex and competitive than portrayed by the federal government.
"The industry has been exceptionally fluid over the last 18 years," said Scott Sheffer, a vice president for global partnerships at Google, the company's first witness at its antitrust trial in federal court in Alexandria.
The Justice Department and a coalition of states contend that Google built and maintained an illegal monopoly over the technology that facilitates the buying and selling of online ads seen by consumers.
Google counters that the government's case improperly focuses on a narrow type of online ads — essentially the rectangular ones that appear on the top and on the right-hand side of a webpage. In its opening statement, Google's lawyers said the Supreme Court has warned judges against taking action when dealing with rapidly emerging technology like what Sheffer described because of the risk of error or unintended consequences.
Google says defining the market so narrowly ignores the competition it faces from social media companies, Amazon, streaming TV providers and others who offer advertisers the means to reach online consumers.
Justice Department lawyers called witnesses to testify for two weeks before resting their case Friday afternoon, detailing the ways that automated ad exchanges conduct auctions in a matter of milliseconds to determine which ads are placed in front of which consumers and how much they cost.
The department contends the auctions are finessed in subtle ways that benefit Google to the exclusion of would-be competitors and in ways that prevent... Read More