Earlier this year, Village Roadshow attributed its financial troubles, which culminated in bankruptcy, to a long-standing disagreement with Warner Bros., particularly over the studio’s choice to simultaneously release “Matrix Resurrections” on HBO Max and in cinemas. This move reportedly impacted box office earnings significantly, fueling the dispute.
That lawsuit went dark shortly after it was filed, with a judge moving it to arbitration.
A full year passed, and eventually, an arbitrator ruled in WBD’s favor, granting them approximately $125 million. This previously undisclosed amount has been learned by The Hollywood Reporter. In 2023, it was determined that Village Roadshow violated several agreements concerning the Matrix films by not fulfilling their $107 million obligation in the cofinancing agreement, according to a source who spoke under condition of anonymity due to the confidential nature of the case. The debt has yet to be settled.
Back in March, I found myself facing a tough challenge when my gaming world – once bustling with life as one of the key behind-the-scenes financiers in Tinseltown, backing epic productions like The Matrix and Ocean’s franchises – had to seek bankruptcy protection. This decision wasn’t an easy one, but a series of costly internal content creation efforts and a 2022 lawsuit that strained our relationship with WBD beyond repair played a significant role in this unfortunate turn of events.
The legal battle we faced wasn’t just about Matrix Resurrections; it also involved disputes over co-financing sequels and remakes to some key franchises, such as Wonka, Joker, and I Am Legend, where WBD and I share the rights. Unfortunately, this lawsuit left me out of these exciting projects that should have been part of my gaming journey moving forward.
An instance that occurred before the Matrix dispute: Village Roadshow aspired to be involved in a TV series under development based on Edge of Tomorrow, but was informed that the project would not progress if they didn’t give up their rights, as stated in court documents. Eventually, WBD decided to abandon the production.
Regarding disputes concerning “The Matrix Resurrections”, Warner Bros. Discovery (WBD) asserted in both public declarations and legal documents that they extended an offer to Village Roadshow for co-financing the film, a proposal which was accepted. However, the financier subsequently declined to meet its financial obligations for the film, which had production costs of approximately $200 million and marketing expenses totaling around $100 million, as stated in court records. WBD ultimately won their claims against Village Roadshow for unfair competition, breach of contract, and breach of the implied covenant of good faith and fair dealing (which pertains to untrustworthy dealings), according to a source familiar with the arbitration process.
A mediator ruled in favor of WBD, determining that Village Roadshow had violated the joint ownership and distribution contracts. Notably, this decision granted the studio more than $107 million in compensation, along with an additional $17 million in accrued interest.
The decision in the case has been upheld upon appeal, but the damages are being recalculated to factor in a potential day-and-date license fee for the movie and other earnings that WBD had received beforehand and would have owed, as stated in court documents. Despite this, the studio is optimistic that the verdict will hold firm, according to a source. Additionally, the unpaid co-financing debt interest has grown significantly to approximately $32 million.
In the course of their legal disputes, Village Roadshow racked up approximately $18 million in lawyer expenses, while WBD spent around $8 million on arbitrations concerning the Matrix sequel and Wonka, both of which contain accusations that WBD failed to acknowledge the financier’s right to collaborate on the films. This refusal was allegedly due to WBD claiming these movies are not prequels to Charlie and the Chocolate Factory, a film jointly owned by both parties according to court documents.
As a devoted fan, I’m keeping a close eye on the situation unfolding with Village Roadshow. Last month, the court green-lit a $417.5 million deal by Blade Runner 2049’s producer, Alcon Media Group, for their film library – which includes shares in iconic franchises like The Matrix and Ocean’s. This ‘stalking horse bid’ sets a base price for these assets, with the real test coming at auction. Potential rivals, such as Warner Bros. Discovery and Content Partners, might yet throw their hats into the ring before the May 16 deadline.
Additionally available for purchase: the rights to derivatives of established blockbusters, along with other movies, as well as Village Roadshow’s studio operations. Since 2018, the company has been working on developing 99 feature films and 233 television series, but only six movies and seven TV shows were actually produced at a cost of $47.5 million. Unfortunately, none of these productions managed to make a profit, suggesting that the internal content creation endeavor may not have been financially sustainable.
WBD declined to comment for this story.
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2025-05-16 16:25