Village Roadshow Pictures has filed for Chapter 11 bankruptcy, and the film company’s financial woes seem to be largely attributable to their litigation with Warner Bros. over the theatrical-streaming hybrid release of 2021’s The Matrix Resurrections. Village Roadshow’s bankruptcy filing was reported by THR, with the trade also revealing that “Village Roadshow had sued for breach of contract after WB released the franchise film on Max the same day it was released theaters, which has cost the company $18 million in legal fees and counting.” Per THR, Village Roadshow’s legal action against WB amounted to “effectively ending what had been its most lucrative business arrangement.”
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THR also revealed that Village Roadshow has spoken with hedge fund Goldman Sachs on finding potential buyers, though the company’s legal action against WB “stifled the ability to close the transaction” despite at least one possible buyer reportedly being interested. Ironically, Village Roadshow’s last movie released before The Matrix Resurrections was 2019’s Joker, which became a towering $1 billion box office hit, albeit one whose financing deals with Village Roadshow and Bron Studios meant that distributor Warner Bros. themselves saw far less profit from the movie than they typically would have (DC Films then-president Walter Hamada also having reportedly tried to stop Joker from moving ahead.)
The Matrix Resurrections was released while much of the film industry (and indeed the entire world) was still adapting the impact of the COVID-19 pandemic, which greatly altered day-to-day life and moviegoing alike in March of 2020. With movie theaters cautiously re-opening their doors in late August of that year, box office revenue under early COVID conditions still paled in comparison to normal years. This led to Warner Bros., under the studio’s then-parent company AT&T and CEO Jason Kilar, to launch Project Popcorn, which consisted of dual theatrical and streaming releases of WB’s entire film slate from 2020’s Wonder Woman 1984 all the way through 2021’s The Matrix Resurrections.
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The move proved extremely controversial in Hollywood, with directors, actors, and production companies all objecting to having their theater-intended movies given a hybrid release on WB’s new streaming platform HBO Max (since renamed Max under Warner Bros. Discovery). Many also complained of not being properly informed ahead of time of the decision and being blindsided as a result. Christopher Nolan was particularly vocal in his opposition to the hybrid release model, with Nolan’s 2020 movie Tenet braving the pandemic and barely open theaters in late August 2020 rather than going to streaming, with Nolan subsequently leaving WB for Universal Pictures for his next film, 2023’s Oppenheimer.
Village Roadshow’s lawsuit of Warner Bros. comes during a time when the streaming vs. theatrical business model debate is only intensifying even after COVID is no longer the box-office albatross that it once was. Even with COVID out of the way, box office trends haven’t returned to anything resembling pre-2020 numbers, with $1 billion hits being far fewer and further between. Streaming, at the same time, has its own set of financial problems, with budgets often equaling or even eclipsing those of theatrical movies (the Russo Brothers’ new Netflix movie The Electric State, for example, costing a staggering $320 million).
While the role of both streaming and theaters in the film industry’s future business model still hasn’t been fully settled, both obviously come with their own sets of pros and cons, and finding a way to level the two off will surely be essential for Hollywood going forward. Hopefully, the long-terms effects of the COVID-19 pandemic on the film industry will eventually lead to a harmony between theaters and streaming where future film company bankruptcies like Village Roadshow’s can be avoided.
Joker and The Matrix Resurrections are both available to stream on Max.
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