Village Roadshow, The Studio Embroiled In A Dispute With Warner Bros. Over ‘The Matrix Resurrections’, Files For Bankruptcy And Probably Won’t Recover
All good things must come to an end, and that looks like the case for the production company Village Roadshow, which had a prosperous partnership with the troubled Warner Bros. That was until recently and the release of The Matrix Resurrections.
Due to pandemic concerns at the time, that extraneous sequel, a co-production between Roadshow and WB, was released day-and-date into theaters and on HBO Max in December 2021. The former didn’t like that strategy and took the studio to court.
Whether they have a legitimate case or not, it has taken a toll on VR which officially brings them to the brink of bankruptcy. Deadline reports they filed for Chapter 11 protection in Delaware last Monday.
The filing cites, “ongoing arbitration with longtime partner Warner Bros as well as an overly ambitious studio expansion,” as factors in this decision. The arbitration, as explained, is the result of a disagreement over the fourth Matrix film – just one of many blockbusters Roadshow produced with Warner over the years.
They worked together on Joker, Mad Max: Fury Road, and over 80 other pictures during a working relationship that declined overnight. “The Company accused WB of shutting it out of its legal and contractual rights to co-own and co-finance the sequels, prequels, spinoffs, and other derivative works of the 89 films that the Company funded and co-owns and with respect to which derivative rights are applicable,” the filing states.
Village Roadshow also accrued debt in the $160 million range. They have a library that makes about $50M a year, but the arbitration, which has dragged on for three years, is costing them $18M. They have cut costs and even tried putting themselves up for sale. Their minimum asking price was $365M. Unfortunately, the fight with WB has run off prospective buyers.
They were also flagged by the striking Writers Guild of America amid it all for failure to pay the screenwriters working on their productions. Their filing acknowledged “significant liability has attached due to unpaid contracts, such as those with writers and consultants.” Elsewhere, it was reported that $47.5M went into film/TV projects that didn’t bear fruit.
The first sign of trouble was in January when the CEO Steve Mosko stepped down after seven years in the position. Both Joker and Matrix Resurrections came to be under his tenure. Before he took the job Village Roadshow was teetering on a previous bankruptcy. Specialized asset manager Vine Alternative Investments bailed them out and became their chief financier.
Vine CEO James Moore says this time is different. There probably won’t be any comeback for VR or any favorable end to the arbitration. A Warner Bros. victory is anticipated and the latter will likely get paid for their trouble. “If we owe Warner Brothers money, they’re likely to get all their money. We don’t escape anything in bankruptcy,” Moore said to Variety.
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