<PAGE>

================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                               FORM 10-Q/A

                            (AMENDMENT No. 1)

  (Mark One)

     [X]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
           Exchange Act of 1934.

                For the quarterly period ended May 2, 1999

     [_]   Transaction Report Pursuant to Section 13 or 15(d) of the Securities
           Exchange Act of 1934.

                For the transition period from    to    .
                                              ----  ----

                        Commission File Number: 0-21943

                              FOUR MEDIA COMPANY
            (Exact name of Registrant as specified in its charter)


              Delaware                              95-4599440
    (State or other jurisdiction                 (I.R.S. Employer
  of incorporation or organization)             Identification No.)



                  2813 West Alameda Avenue, Burbank, CA 91505
         (Address of Principal Executive Offices, Including Zip Code)


                                 818-840-7000
             (Registrant's Telephone Number, Including Area Code)

                                 ------------

                                Not applicable
  (Former name, former address, and former fiscal year, if changed since last
                                    report)

          Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                            Yes     X      No
                                  ------      ------

          Number of shares of common stock, par value $0.01 per share, of the
registrant outstanding as of June 7, 1999: 19,693,629 shares.

<PAGE>

--------------------------------------------------------------------------------
FOUR MEDIA COMPANY
FORM 10-Q
For the Quarter Ended May 2, 1999
TABLE OF CONTENTS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


PART I       FINANCIAL INFORMATION
<S>          <C>                                                                           <C>

Item 1.      Financial Statements                                                           Page
                                                                                           Number
                                                                                           ------
             Consolidated Balance Sheets as of August 2, 1998
             and May 2,  1999...........................................................      3

             Consolidated Statements of Operations for the Nine Months ended May 3, 1998
             and May 2, 1999 and the Three Months Ended May 3, 1998 and
             May 2, 1999................................................................      4

             Consolidated Statements of Cash Flows for the Nine Months ended May 3, 1998
             and May 2, 1999............................................................      5

             Notes to Consolidated Financial Statements.................................      6



Signature    ...........................................................................      9
</TABLE>

                                       2
<PAGE>

-------------------------------------------------------------------------------
PART I.  FINANCIAL INFORMATION
-------------------------------------------------------------------------------

--------------------------------------------------------------------------------
ITEM 1.  Financial Statements
--------------------------------------------------------------------------------

Item 1 of the registrant's Quarterly Report on Form 10-Q for the quarter ended
May 2, 1999, filed with the Securities and Exchange Commission on June 10, 1999
is hereby amended and restated in its entirety as follows:

                                     FOUR MEDIA COMPANY
                                CONSOLIDATED BALANCE SHEETS
                             (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                                         August 2,             May 2,
                                                                                           1998                 1999
                                                                                         ----------           --------
                                                                                                             (Unaudited)
                                     ASSETS
Current assets:
<S>                                                                                     <C>                <C>
 Cash..............................................................................        $  3,301           $  8,098
 Trade accounts receivable, net of allowance for doubtful accounts of $1,258 and
  $1,666 as of August 2, 1998 and May 2, 1999, respectively........................          31,657             39,055
 Inventory.........................................................................           1,263              1,972
 Prepaid expenses and other current assets.........................................           5,624              5,435
                                                                                           --------           --------
   Total current assets............................................................          41,845             54,560

Property, plant and equipment, net.................................................         124,230            163,815
Deferred taxes.....................................................................           6,572              6,572
Long-term receivable...............................................................           3,276              5,168
Goodwill, less accumulated amortization of $529 and $1,884 as of August 2, 1998
 and May 2, 1999, respectively.....................................................          37,507             82,079
Other assets.......................................................................           2,914              3,888
                                                                                           --------           --------
   Total assets....................................................................        $216,344           $316,082
                                                                                           ========           ========

                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Current maturities of long-term debt and capital lease obligations................        $  6,184           $  6,638
 Accounts payable..................................................................          10,781              9,901
 Accrued and other liabilities.....................................................           5,980              8,746
 Deferred income taxes.............................................................           1,615              1,615
                                                                                           --------           --------
   Total current liabilities.......................................................          24,560             26,900

Long-term debt and capital lease obligations.......................................         124,671            161,854
                                                                                           --------           --------
   Total liabilities...............................................................         149,231            188,754

Commitments and contingencies

Stockholders' equity:
 Preferred stock, $.01 par value; 5,000,000 shares authorized, 150,000 Series A
    Convertible shares issued and outstanding as of August 2, 1998 and 0 as of
    May 2, 1999; liquidation preference $15,000,000................................               2                  -
 Common stock, $.01 par value; 50,000,000 shares authorized, 9,876,770 shares
    issued and outstanding as of August 2, 1998 and 19,693,629 as of May 2, 1999...              99                197
 Additional paid-in capital........................................................          59,577            112,596
 Foreign currency translation adjustment...........................................          (1,567)            (1,450)
 Retained earnings.................................................................           9,002             15,985
                                                                                           --------           --------
   Total stockholders' equity......................................................          67,113            127,328
                                                                                           --------           --------
   Total liabilities and stockholders' equity......................................        $216,344           $316,082
                                                                                           ========           ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3
<PAGE>
                              FOUR MEDIA COMPANY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                         Nine Months Ended                         Three Months Ended
                                                  ---------------------------------           -------------------------------
                                                     May 3,                May 2,                May 3,              May 2,
                                                      1998                  1999                  1998                1999
                                                  ------------          -----------           -----------         -----------
Revenues:
<S>                                       <C>                  <C>                    <C>                  <C>
 Mastering and distribution..............           $25,715                $ 33,033             $ 9,108              $11,009
 Broadcast and syndication...............            16,902                  17,142               5,817                6,073
 Television..............................            44,740                  94,221              19,318               32,178
 Film and animation......................             7,660                   4,542               4,858                2,248
                                                    -------                --------             -------              -------
  Total revenues.........................            95,017                 148,938              39,101               51,508
                                                    -------                --------             -------              -------
Cost of services:
 Personnel...............................            37,456                  55,355              15,182               18,763
 Material................................             7,542                   8,165               2,963                2,591
 Facilities..............................             4,713                   6,888               1,831                2,397
 Other...................................            10,571                  15,636               3,918                5,748
                                                    -------                --------             -------              -------
  Total cost of services.................            60,282                  86,044              23,894               29,499
                                                    -------                --------             -------              -------
   Gross profit..........................            34,735                  62,894              15,207               22,009
                                                    -------                --------             -------              -------
Operating expenses:
 Sales, general and administrative.......            13,719                  24,936               5,969                8,296
 Depreciation and amortization...........            13,541                  20,521               5,558                7,830
                                                    -------                --------             -------              -------
  Total operating expenses...............            27,260                  45,457              11,527               16,126
                                                    -------                --------             -------              -------
   Income from operations................             7,475                  17,437               3,680                5,883
Interest expense, net....................             5,430                  10,454               2,553                3,198
                                                    -------                --------             -------              -------
   Income before income tax..............             2,045                   6,983               1,127                2,685
Provision for income tax.................                --                      --                  --                   --
                                                    -------                --------             -------              -------
   Net income before extraordinary item..             2,045                   6,983               1,127                2,685
Extraordinary loss on early
 extinguishment of debt..................            (2,449)                     --              (2,449)                  --
                                                    -------                --------             -------              -------
Net Income (loss)........................           $  (404)               $  6,983             $(1,322)             $ 2,685
                                                    =======                ========             =======              =======

Earnings per common share:
 Income before extraordinary item........           $  0.22                $   0.63             $  0.12              $  0.21
 Extraordinary item......................             (0.26)                     --               (0.26)                  --
                                                    -------                --------             -------              -------
 Net income (loss) per common share......           $ (0.04)               $   0.63             $ (0.14)             $  0.21
                                                    =======                ========             =======              =======
Earnings per common share - assuming
 dilution:
 Income before extraordinary item........           $  0.19                $   0.54             $  0.10              $  0.19
 Extraordinary item......................             (0.23)                     --               (0.22)                  --
                                                    -------                --------             -------              -------
 Net income (loss) per common share......           $ (0.04)               $   0.54             $ (0.12)             $  0.19
                                                    =======                ========             =======              =======
Weighted average common and common
 equivalent shares outstanding:
 Basic...................................             9,553                  11,130               9,553               12,824
                                                    =======                ========             =======              =======
 Diluted.................................            10,526                  13,037              11,212               14,386
                                                    =======                ========             =======              =======
</TABLE>
  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       4
<PAGE>

                              FOUR MEDIA COMPANY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                                Nine Months Ended
                                                                                 --------------------------------------------
                                                                                          May 3,                May 2,
                                                                                          1998                  1999
                                                                                    ------------------     ----------------
<S>                                                                           <C>                     <C>
Cash flows from operating activities:
 Net income (loss).........................................................               $   (404)          $  6,983
 Adjustments to reconcile net income (loss) to net cash provided by
  (used in) operating activities:
   Depreciation and amortization...........................................                 13,541             20,521
   Provision for doubtful accounts.........................................                    417                741
   Extraordinary loss on early extinguishment of debt......................                  2,449                 --
   Changes in operating assets and liabilities:
    Restricted cash........................................................                    625                 --
    Trade and long term receivables........................................                 (9,543)            (1,701)
    Inventory..............................................................                   (171)              (425)
    Prepaid expenses and other current assets..............................                 (3,123)              (916)
    Accounts payable.......................................................                 (2,961)            (4,286)
    Accrued and other liabilities..........................................                 (4,736)            (3,223)
                                                                                          --------           --------
     Net cash (used in) provided by operating activities...................                 (3,906)            17,694

Cash flows from investing activities:
 Purchases of property, plant and equipment................................                (21,245)           (30,539)
 Acquisition of businesses, net of cash acquired...........................                (23,248)           (51,506)
                                                                                          --------           --------
     Net cash used in investing activities.................................                (44,493)           (82,045)

Cash flows from financing activities:
 Net proceeds from Warburg transaction.....................................                     --             50,985
 Proceeds from mortgage loan...............................................                  8,100                 --
 Repayments of mortgage loans..............................................                     --                (85)
 Proceeds from term loans..................................................                102,000             45,000
 Repayments of term loans..................................................                     --               (563)
 Proceeds from (repayment of) revolving credit facility....................                 (5,287)            (4,000)
 Proceeds from equipment notes.............................................                  5,599                 --
 Proceeds from preferred stock financing...................................                 14,835                 --
 Repayment of equipment notes and capital lease obligations................                (80,637)           (22,263)
                                                                                          --------           --------
     Net cash provided by financing activities.............................                 44,610             69,074
Effect of exchange rate changes on cash....................................                   (212)                74
                                                                                          --------           --------
Net (decrease) increase in cash............................................                 (4,001)             4,797
Cash at beginning of period................................................                  6,089              3,301
                                                                                          --------           --------
Cash at end of period......................................................               $  2,088           $  8,098
                                                                                          ========           ========

Supplemental disclosure of cash flow information:
 Cash paid during the period for:
  Interest  ...............................................................               $  5,430           $ 10,454
  Taxes....................................................................                    370                 24
 Non cash investing and financing activities:
  Capital lease obligations incurred.......................................               $  9,049           $     --
  Stock issued in connection with the Encore acquisition...................               $     --           $  2,131
  Notes issued in connection with the POP acquisition......................               $  3,140           $     --
</TABLE>


  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       5
<PAGE>

                               FOUR MEDIA COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Business, Organization and Basis of Presentation

    Four Media Company (the "Company") is a provider of technical and creative
services to owners, producers and distributors of television programming,
feature films and other entertainment content. The Company's services integrate
and apply a variety of systems and processes to enhance the creation and
distribution of entertainment content.

    While the Company believes that it operates in one business segment, which
is providing services to the entertainment industry, the Company has organized
its activities into four divisions: mastering and distribution, broadcast and
syndication, television, and film and animation services. The mastering and
distribution division, located in Burbank, Universal City and San Francisco,
California and London, England, manages, formats and distributes content
worldwide. The broadcast and syndication division, located in Burbank and the
Republic of Singapore, assembles and distributes television programming via
satellite to viewers in the United States, Canada and Asia. The television
division, located in Burbank, Hollywood, Universal City, Santa Monica and San
Francisco, California, assembles film or video principal photography into a form
suitable for network, syndicated, cable or foreign television. The film and
animation division, located in Santa Monica, digitally creates and manipulates
images in high-resolution formats for use in feature films.

    Organization. On February 2, 1998, the Company acquired all the outstanding
shares of capital stock of Visualize d/b/a Pacific Ocean Post ("POP").  The
purchase price of the transaction was $30.1 million, of which $25.4 million was
paid in cash, $1.2 million was represented by promissory notes, and $3.5 million
represented transaction costs.

    On May 4, 1998, the Company, through its wholly owned subsidiary VSDD
Acquisition Corp., acquired all of the outstanding ownership interests in
Symphonic Video LLC and Digital Doctors LLC from their parent companies Video
Symphony, Inc. and Digital Doctors, Inc. (collectively "VSI").  In this
transaction, the Company effectively acquired all of the operations of VSI.  The
purchase price of the transaction was $3.3 million, of which $3.1 million was
paid in the Company's common stock and $0.2 million represented transaction
costs.

    On September 18, 1998, the Company acquired all the outstanding shares of
capital stock of MSCL, Inc. ("Encore") and the real estate occupied by Encore.
The purchase price of the transaction was approximately $46.0 million.  This
amount includes $41.9 million paid in cash to the Encore shareholders (including
$11.2 million for the purchase of real estate), $2.0 million in estimated
transaction costs, and the issuance of 486,486 shares of Company common stock
valued at $4.38 per share.

     On April 29, 1999, the Company acquired all of the outstanding shares of
capital stock of TVP Group Plc ("TVP"), a London based provider of
postproduction services for approximately $10.0 million in cash, including the
repayment of debt. In addition, the Company is required to pay the former
shareholders of TVP up to an additional $0.8 million (the "Deferred
Consideration") if, within the first twelve months following the TVP
acquisition, (1) the Company acquires another U.K. company engaged in a line of
business similar to that of TVP, or (2) TVP achieves certain operating results.

     On May 25, 1999, the Company acquired all of the outstanding shares of
capital stock of TVi Limited ("TVi") from Carlton Communications Plc, a London
based provider of postproduction services, for approximately $10.1 million in
cash.  Upon completion of the TVi acquisition, the Company paid out
approximately $0.4 million of the Deferred Consideration.

     On April 8, 1999, Warburg, Pincus Equity Partners, L.P. and certain
affiliates ("Warburg, Pincus") acquired 10.2 million shares of the Company's
common stock, comprised of both newly issued shares and existing shares, for
approximately $80.0 million.  Under the terms of the Agreement, Warburg, Pincus
acquired approximately 6.6 million common shares from the Company for $52.7
million and received a warrant to purchase 1.1 million shares with an exercise
price of $15.00 per share.  In addition, Warburg, Pincus acquired 3.1 million of
the outstanding shares currently held by Technical Services Partners, L.P.
("TSP"), a limited partnership controlled by Steinhardt Management Company,
Inc., for approximately $23.4 million. An additional 498,000 shares were
purchased for approximately $4.0 million from the Company's founders, who have
entered into long-term employment contracts and who continue to have a
significant equity interest in the Company.  Concurrently with the closing of
the transaction, the holder of all outstanding shares of the Company's preferred
stock converted all of its preferred shares into 2,250,000 shares of common
stock.

     The following unaudited pro forma summary combines the consolidated results
of operations of the Company, POP, VSI, Encore, TVP and TVi, and the Warburg,
Pincus transaction as if such transactions had occurred at the beginning of
fiscal 1998 after giving effect to certain adjustments, including amortization
of goodwill, revised depreciation based on estimated fair market values,
utilization of net operating losses, revised interest expense based on the terms
of the acquisition debt and equity financing and elimination of certain
acquisition related costs. The pro forma summary does not necessarily reflect
the results of operations that actually would have occurred had the foregoing
transactions been consummated on the dates set forth above (in thousands):





<TABLE>
<CAPTION>
                                                          Nine Months Ended
                                                     ---------------------------
                                                     May 3, 1998     May 2, 1999
                                                     -----------     -----------
<S>                                                  <C>              <C>

Revenues..........................................   $172,770         $169,568
Net income........................................      8,045           10,277

Earnings per common share
     Basic........................................   $   0.41         $   0.52
     Diluted......................................       0.41             0.52
</TABLE>

                                       6
<PAGE>

                                FOUR MEDIA COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Business, Organization and Basis of Presentation (continued)

    Basis of Presentation. The accompanying consolidated financial statements of
Four Media Company and its subsidiaries as of August 2, 1998 and May 2, 1999 and
for the nine and three month periods ended May 3, 1998 and May 2, 1999 have been
prepared in accordance with generally accepted accounting principles and with
the instructions to Form 10-Q and Article 10 of Regulation S-X. The balance
sheet at August 2, 1998 was derived from audited financial statements included
in the Company's Form 10-K for the fiscal year ended August 2, 1998 (the "Form
10-K"). The financial statements at May 2, 1999 and for the nine and three month
periods ended May 3, 1998 and May 2, 1999 have not been audited by independent
accountants, but include all adjustments (consisting of normal recurring
adjustments) which are, in management's opinion, necessary for a fair
presentation of the financial condition, results of operations and cash flows
for such periods. However, these results are not necessarily indicative of
results for any other interim period or for the full year.

    Certain information and footnote disclosures normally included in financial
statements in accordance with generally accepted accounting principles have been
omitted pursuant to requirements of the Securities and Exchange Commission.
Management believes that the disclosures included in the accompanying interim
financial statements and footnotes are adequate to make the information not
misleading, but should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Form 10-K.

    The accompanying financial statements as of August 2, 1998 and for the nine
and three months ended May 3, 1998 and May 2, 1999 are presented on a
consolidated basis and include the accounts of Four Media Company and its wholly
owned subsidiaries 4MC-Burbank, Inc., Digital Magic Company, Four Media Company
Asia PTE Ltd, Anderson Video Company, Co3, Visualize (dba POP), POP Animation,
VSDD Acquisition Corp. MSCL, Inc. (dba Encore), and TVP.  All material inter-
company accounts and transactions have been eliminated in consolidation.


2.  Earnings Per Share

    Effective with the period ended May 3, 1998, the Company adopted the
earnings per share calculation and disclosure requirements of SFAS No. 128,
"Earnings per Share".  The table below demonstrates the earnings per share
calculations for the periods presented in thousands except per share data.


<TABLE>
<CAPTION>
                                 ---------------------------------------------------------------------------------------------------
                                               Nine Months Ended                                 Nine Months Ended
                                                  May 3, 1998                                       May 2, 1999
                                 -----------------------------------------------   -------------------------------------------------
                                    Income           Shares         Per Share         Income            Shares           Per Share
                                  (Numerator)     (Denominator)       Amount        (Numerator)      (Denominator)        Amount
                                 -------------   ---------------   -------------   --------------   ---------------   --------------
<S>                              <C>             <C>               <C>             <C>              <C>               <C>
Net income......................  $2,045                   -                           $6,983                 -
Basic EPS.......................   2,045               9,553          $0.22             6,983            11,130            $0.63
                                                                      =====                                                =====
Effects of Dilutive Securities:
Options and convertible
    preferred stock.............       -                 973                                -             1,907
                                  ------              ------                           ------            ------
Diluted EPS....................   $2,045              10,526          $0.19            $6,983            13,037            $0.54
                                  ======              ======          =====            ======            ======            =====

Options and warrants omitted...                          885                                              7,470
                                                      ======                                             ======
</TABLE>


                                       7
<PAGE>

                              FOUR MEDIA COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.    Earnings Per Share (continued)

<TABLE>
<CAPTION>

                                 ---------------------------------------------------------------------------------------------------
                                               Three Months Ended                                Three Months Ended
                                                  May 3, 1998                                       May 2, 1999
                                 -----------------------------------------------   -------------------------------------------------
                                    Income           Shares         Per Share         Income            Shares           Per Share
                                  (Numerator)     (Denominator)       Amount        (Numerator)      (Denominator)        Amount
                                 -------------   ---------------   -------------   --------------   ---------------   --------------
<S>                              <C>             <C>               <C>             <C>              <C>               <C>
Net income.....................     $1,127                -                            $2,685                  -
Basic EPS......................      1,127            9,553            $0.12            2,685             12,824           $0.21
                                                     ======            =====                              ======           =====
Effects of Dilutive Securities:
Options and convertible
     preferred stock...........          -            1,659                                 -              1,562
                                    ------           ------                            ------             ------
Diluted EPS....................     $1,127           11,212            $0.10           $2,685             14,386           $0.19
                                    ======           ======            =====           ======             ======           =====
Options and warrants omitted...                         885                                                7,470
                                                     ======                                               ======

</TABLE>

     The Company incurred an extraordinary loss of $2.4 million for the three
and nine months ended May 3, 1998. This resulted in a net loss of $1.3 million
and $0.4 million for the three and nine months ended May 3, 1998, respectively.
Basis EPS and diluted EPS after the extraordinary loss was ($0.14) and ($0.12),
respectively, for the three months ended May 3, 1998 and ($0.04) and ($0.04),
respectively, for the nine months ended May 3, 1998.

     Certain options were omitted in 1998 and 1999 because the exercise prices
(between $6.68 and $10.00) exceeded the average price during the periods.

3.   Comprehensive Income

     In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income
(SFAS No. 130)."  The Company adopted SFAS No. 130 beginning in the first
quarter of fiscal 1999.  Comprehensive income is defined as all changes in
shareholders' equity, except those resulting from investments by or
distributions to shareholders.  The Company's comprehensive income is as follows
(in thousands):

<TABLE>
<CAPTION>
                                                 Nine Months Ended                           Three Months Ended
                                          -------------------------------            ---------------------------------
                                             May 3,              May 2,                  May 3,                May 2,
                                              1998                1999                    1998                 1999
                                    ----------------------------------------     ---------------------------------------
<S>                                 <C>                  <C>                     <C>                   <C>
Net income..........................         $(404)              $6,983                 $(1,322)              $2,685
Foreign currency translation
 Adjustments........................          (391)                 117                     570                  (85)
                                             -----               ------                 -------               ------
Comprehensive income (loss).........         $(795)              $7,100                 $  (752)              $2,600
                                             =====               ======                 =======               ======
</TABLE>

4.   Foreign Exchange

     Substantially all of the Company's foreign transactions are denominated in
foreign currencies, including the liabilities of its foreign subsidiaries, 4MC
Asia, TVP, and TVi.  Although the Company's foreign transactions are not
generally subject to foreign exchange transaction gains or losses, the financial
statements of its foreign subsidiaries are translated into United States dollars
as part of the Company's consolidated financial reporting.  Fluctuations in the
exchange rate therefore will affect the Company's consolidated balance sheets
and statements of operations.  Until the recent Asian economic difficulties, the
Singapore dollar and British pound have been stable relative to the United
States dollar.  However, during fiscal 1998, the Singapore dollar lost
approximately 20% of its value relative to the U.S. dollar.

5.   Legal Proceedings

     On March 16, 1999, the Company entered into a settlement agreement with the
International Alliance of Theatrical Stage Employees ("IATSE") relating to
several matters pending before the National Labor Relations Board ("NLRB").
Under the terms of the settlement agreement, the Company agreed to enter into a
collective bargaining agreement with IATSE which affects 110 employees and to
pay an aggregate of approximately $240,000 in claims for back pay from certain
current and former employees. In consideration therefor, IATSE has agreed to
cease all negative publicity against the Company and to dismiss all actions
pending before the NLRB.

                                       8
<PAGE>

                                   SIGNATURES



          Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                       FOUR MEDIA COMPANY



Date: June 24, 1999                    By:      /s/ Christopher M.R. Phillips
                                          ------------------------------------
                                                Christopher M.R. Phillips
                                                Executive Vice President and
                                                Chief Financial Officer

                                       9