Mon Sep 16 15:42:12 UTC 2024: ## Framestore Reels From Hollywood Strikes, Revenue Plunges

**LONDON** – Framestore, the renowned visual effects company behind blockbuster movies like the “Guardians of the Galaxy” franchise and “Avengers: Endgame,” is still reeling from the impact of the Hollywood strikes that crippled the industry for over six months last year. The company’s parent, Infinity Topco, revealed a staggering $46.7 million drop in revenue for 2023, landing at $665.6 million, largely attributed to the production delays caused by the strikes.

The strikes, which began with writers in May and followed by actors in July, resulted in the postponement of many major film releases, including the highly anticipated “Deadpool & Wolverine.” This directly impacted Framestore’s pipeline of projects, as the company relies heavily on North American production, which accounts for roughly 71% of its revenue.

While Framestore was able to cut costs and narrow its operating loss to $16.9 million, the company’s financial statements paint a less rosy picture. The value of its investment in Infinity Bidco, the entity that owns Framestore and its sister companies, was written down by $19.9 million due to the impact of the strikes.

However, Framestore’s direct operating company, Guidedraw, fared better, with revenue rising by 8.1% to $376.2 million. This growth was largely fueled by an increase in British productions, which were largely unaffected by the Hollywood strikes.

Despite these positive signs, Infinity Topco’s reliance on borrowed money remains a concern. The company increased its debt by $52.1 million last year, bringing the total to $194 million. While management is confident in its ability to refinance its obligations, the financial statements acknowledge that there is no guarantee of success, raising concerns about the company’s future as a going concern.

Framestore’s financial struggles stand in stark contrast to the success of Industrial Light & Magic (ILM), Disney’s in-house VFX company. ILM, thanks to its implementation of remote working, managed to cut costs and achieve record profits in 2023.

Looking ahead, Framestore’s financial statements suggest that the company is performing in line with budget for the 2024 fiscal year, but the lingering impact of the strike is still being felt. This led to the closure of its Vancouver studio in July, highlighting the ongoing challenges the company faces in the aftermath of the Hollywood strikes.

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