On Monday, just three weeks after agency production executive Tom Cronin stepped in as EVP/manager of Foundation Content, he and 15 others were given notice of the Chicago operation’s imminent closing. That very day, in fact.
The news was delivered personally to each staff member by co-president/founder James Lipetzky, whose commercial editing for top tier clients was the company’s foundation, so to speak. He had flown in from L.A. the night before to break the news.
The staff was taken by surprise at the sudden shuttering of the nine year old company that had begun calling itself “an indie film/advertising production collection,” despite signs of change that began cropping up last year.
Eight of the 16-person staff gathered their belongings and left the Ohio Street premises Monday and the other eight will remain until Feb. 15 to wrap projects and transfer files to company headquarters in Culver City.
There had been a series of abrupt changes this fall, the most recent being Cronin’s hiring in November to replace VP/general manager Steve Morrison of Foundation Content. At the time, Morrison agreed to stay on to focus on a creative editorial and supervise the staff of four editors. But he suddenly left the company for undisclosed reasons a few weeks ago, one year after he had joined.
Permanent move to L.A. in 2011
In February, 2009, Lipetzky and his wife, co-president/creative director Samantha Hart, a native Californian who had high-profile positions with movie and record companies, opened a small office in Santa Monica to facilitate editorial work by Chicago clients.
Eighteen months later, Lipetzky and Hart pulled up Chicago stakes and moved permanently to L.A. They renovated space in the trendy Hayden Tract in Culver City and put their efforts into establishing it as their headquarters.
Foundation’s present L.A. of “longer format, high profile projects” model no longer fits the Chicago model of “30 second editorial,” Hart says. “We’ve always been one step ahead of the game. We want to produce digital content … be a creative company and do more work like what we’ve been doing, the web series for companies like Walmart’s We Live Better and now we’re working with My Space on content.”
Chicago finished L.A. projects
The decision to close Chicago was based on their concentrating on West Coast business. “I wanted to keep Chicago going by giving the staff there our L.A. work, but it didn’t work,” she says.
While Hart maintains that “L.A. was tripling its sales and Chicago’s was dwindling,” a former employee disagrees. He says Chicago was doing all the finishing for L.A. clients, and the true volume of that work wasn’t being accurately reflected in the financial reports.
Even without sales support, he states, “We were holding our own and we were in the process of rebuilding Chicago. But L.A. would take on work and the minute they couldn’t handle it, it was all hands on deck in Chicago,” leaving little time to pursue new business.”
“And Jim being in L.A. all the time wasn’t good for local business,” observes another former employee, although Lipetzky often commuted to Chicago to work for longtime clients.
Decided to quickly close Chicago
The time ultimately arrived when the owners were confronted with having to lay off a good part of the Chicago staff and move basic functions, like graphics, to L.A.
Both Hart and Lipetzky arrived at the same conclusion at the same time, she says. Rather than trim the staff, they should just take the plunge and “end all of it.”
She and Lipetzky are thankful for the opportunity they had in Chicago. “We’re proud of what we accomplished together. We have nothing but admiration for our staff and value their contributions to our company.”
