Movies

‘Joker,’ ‘Matrix’ producer files for bankruptcy protection amid Warner Bros. fight

BBG News

Village Roadshow Entertainment has filed for Chapter 11 bankruptcy protection, a dark turn for the once-prolific film financing company that backed the “Joker,” “The Matrix” and “Ocean’s Eleven” movie franchises.

The West Hollywood-based company blamed its ongoing legal battle with longtime partner Warner Bros. for its collapse, according to a Monday filing in U.S. bankruptcy court in Delaware. Village Roadshow also conceded that its ambitious push into producing independent films and television programs before the pandemic was unprofitable, exacerbating its financial woes.

A legal dispute over a breach of contract was initiated against Warner Bros., following their decision to simultaneously release “The Matrix Resurrections” on HBO Max and in movie theaters on the same day, in December 2021. Village Roadshow argued that Warner Bros.’ departure from an exclusive theatrical release had diminished the value of the franchise.

Village Roadshow’s predicament is a stark example of how the entertainment industry’s shift to streaming has upended once vibrant businesses.

Since its founding in 1997, Village Roadshow has co-produced and co-financed more than 100 movies that together generated more than $19 billion in worldwide box office receipts, according to court documents.

“A confluence of macro-economic factors have weighed heavily on the company’s balance sheet,” Keith Maib, an executive with Accordion Partners who is serving as chief restructuring officer for the Village Roadshow liquidation, wrote in a declaration.

The disruption caused by the COVID-19 pandemic, the 2023 writers’ and actors’ strikes and major entertainment companies’ embrace of streaming helped crater the company, Maib wrote.

The bankruptcy filing was designed to facilitate “orderly sales of the debtor’s assets,” he said.

Hollywood Inc.

The conflict between Village Roadshow and Warner Bros. might signal the end of their 25-year business relationship. What caused the disagreement?

In simpler terms, the dispute between Village Roadshow and Warner Bros. may indicate that they are ending a 25-year partnership. What was the source of the disagreement?

Village Roadshow is controlled by Vine Media Opportunities, Falcon Strategic Partners and a Canadian limited partnership, 1397225 Ontario Ltd.

The company said its assets are worth an estimated $100 million to $500 million.

But it has more than 200 creditors and debts of $500 million to $1 billion, according to the filing.

Village Roadshow, located in Los Angeles, has an outstanding debt exceeding $11 million to Kirkland & Ellis due to their professional services. Additionally, the Writers Guild of America West (WGA) is owed over $1.4 million by Village Roadshow. In December, the WGA added Village Roadshow to their strike list because of unpaid bills.

The filing also shows that Village Roadshow owes Bryan Cranston’s Moonshot Entertainment Inc. $794,000 for development costs and another $250,000 to Sony Pictures Television.

Former Sony executive Steve Mosko, who joined Village Roadshow in 2018 as chief executive, left earlier this year. He had attempted to build Village Roadshow into an independent studio that produced its own movies and television shows.

But the Mosko-led campaign to remake the company into a full-service studio proved costly and untimely.

Hollywood Inc.

Australian film company Village Roadshow Entertainment Group, known for co-financing and co-producing movies such as “Mad Max: Fury Road” and “American Sniper,” is looking to develop movies in-house.

Village Roadshow put into development 99 feature films, 166 scripted television series and 67 unscripted series. Of those, six movies and seven television series went into production. “No film or television series that was produced was able to create a profit that could sustain the studio business,” Maib wrote.

The ongoing legal conflict between Village Roadshow and Warner Bros. has reached its boiling point, with no resolution in sight after over three years of arbitration since the initial lawsuit was filed. This dispute remains unresolved and shows no signs of letting up anytime soon.

In late 2021, Warner Bros. was recalibrating due to the lingering effects of the COVID-19 pandemic. The company, then owned by AT&T, was prioritizing gaining subscribers to support its streaming service over its traditional business of releasing movies to cinemas. That’s when it placed “The Matrix Resurrections” on HBO Max.

Village Roadshow revealed they’ve shelled out over $18 million on legal costs, aiming to settle the disagreement with Warner Bros., costs that still haven’t been reimbursed.

While the firm also worked on movies with Sony Pictures Entertainment and Paramount Pictures, its most valuable assets were produced in conjunction with Warner Bros., including “Mad Max: Fury Road” and “The Lego Movie.” The company co-produced and co-financed 91 films with Warner Bros. by arranging some $4.5 billion in financing.

Village Roadshow’s library assets generate about $50 million a year in revenue, according to Maib’s declaration.

Hollywood Inc.

Village Roadshow, which has co-financed and co-produced Warner Bros. movies for decades, accused the studio of killing the value of the ‘Matrix’ franchise.

In the previous year, I was part of a team that enlisted Goldman Sachs Group to help us offload some of our library assets. However, the ongoing Warner Bros. disagreement cast a shadow over our plans, ultimately causing the initiative to fall through.

The company then engaged Sheppard Mullin Richter and Solic Capital Advisors, which came up with a “stalking horse bidder” to buy the assets following the Chapter 11 process, Maib wrote.

A year ago, the company had about 45 employees in the U.S. and Melbourne, Australia. In its move to slash costs, the firm now has fewer than a dozen employees. As of this month, the company’s monthly overhead is about $300,000.

Read More

2025-03-17 22:12

Previous post Love Island Star’s Girlfriend Faces 3 Years in Prison Over $2.6M Crypto Tax Scandal!
Next post Patrick Schwarzenegger and Fiancée Go Bare for Kim Kardashian’s SKIMS Wedding Campaign!