Village Roadshow Entertainment Group Files for Bankruptcy
Village Roadshow Entertainment Group, the film production entity responsible for well-known franchises including The Matrix, Ocean’s, and the Joker, has initiated bankruptcy proceedings in the United States, as indicated by a filing with a Delaware court.
Financial Difficulties Cited
The company attributes its fiscal woes to a legal dispute with its former partner, Warner Bros (WB), and a “failed and costly endeavor” involving the production of independent films and television series.
To alleviate some of its financial strain, Village Roadshow intends to liquidate its significant film library for $365 million (£281 million).
Court documents estimate the company’s outstanding debts to be between $500 million and $1 billion.
Dispute with Warner Bros
Village RoadShow and WB collaborated on the production and co-ownership of numerous films over several years. However, their relationship deteriorated in early 2022 following the release of The Matrix Resurrections on the streaming service HBO Max.
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Village Roadshow contended that WB excluded it from rights related to potential sequels and prequels of films the two firms had previously co-produced.
Legal Fees and Impact
“The WB arbitration has caused the company to incur more than $18 million in legal fees, nearly all of which remain unpaid,” stated Chief Restructuring Officer Keith Maib in a court filing.
According to Maib, this legal battle “irreparably decimated the working relationship” between the two companies, ultimately ending “the most lucrative nexus” for Village Roadshow’s past achievements.
Additional Challenges
Another critical issue facing Village Roadshow was the launch of an expensive studio business in 2018. None of the independently produced films or television series under this venture generated any profits.
Moreover, like other film companies in the U.S., Village Roadshow confronted decreased demand due to the pandemic and the disruption caused by the strikes launched by Hollywood actors and writers, which commenced in May 2023.
In December, the Writers Guild of America prohibited its members from working with Village Roadshow due to the company’s alleged failure to compensate its contributors.