A clear picture of Village Roadshow’s downfall is focused. Film production and fundraising companies have filed for bankruptcy after costly efforts aimed at creating content in-house and the sourness of their long-standing partnership with Warner Bros.
The company that backed the Matrix and Ocean franchises was once one of Hollywood’s most prolific behind the scenes investors. The business was good. The ownership of various copyrights has given them an enviable position in the entertainment industry. It’s an opportunity to kokreen our proven tent poles and franchises based on that vast collection of intellectual property. The company generated approximately $50 million a year from the film library.
However, in 2017, Village Roadshow pivoted to develop homemade films as part of a broader strategic change aimed at being excluded from the box office. The funds were used to grow the production sector and sold control to asset managers Vine Alternative Investments and Private Equity Firm Falcon Investment Advisors. Television has emerged as a priority for Sony Pictures Entertainment veteran Steve Mosko. The goal was to create content without a studio partner. The company is a one-stop production shop that can transport content ideas to development, and is designed to help infrastructure handle marketing and distribution naturally.
“It allows us to become a little more master of our destiny,” Bruce Berman, then chairman and chief executive of Village Roadshow’s film production, told the Los Angeles Times in 2017.
Eight years after that quote, Village Roadshow pointed to the expansion of its business model as a driver for liquidity issues. As of Monday, there was $148,000 in cash to maintain operation for a week, according to court filings. Since 2018, the company has developed 99 feature films and 233 television series. Of these, only six movies and seven television shows were produced at a price tag of $47.5 million. None of them could make profits that demonstrated the sustainability of the studio business.
Village Roadshow’s solo production venture coincided with a period of upheaval at WB. This has refused to develop titles that would co-own relevant rights such as Sherlock Holmes, The Ocean’s Series, and Ready Player One. The shift preceded filing a contract litigation violation against the studio regarding the decision to simultaneously release The Matrix: HBO Max and Matrix: Revival in theaters in 2021 during the AT&T Project Popcorn Plan. The lawsuit allegedly robbed the release of “economic benefits.”
Before that feud, Village Roadshow was a television series that had WB been developed based on Tomorrow’s Edge, but it was said that the project would not move forward unless it waives its rights. Warners abandoned the show.
In a 2021 email to village roadshow legal counsel Kevin Berg, Warner Bros. Senior Television President, Dave Brown wrote in a 2021 email to village roadshow legal counsel Kevin Berg, the studio “cannot proceed with the project as Village Roadshow and as a joint finance.” He said, “We have previously been in this situation with other companies that co-owned the underlying rights, and our response has been consistent. We invite them to act as an A-level production company. But that doesn’t necessarily mean that VR will be the best deal of any producer on the show.”
Brown said the studio would not move forward from that position. “I know there may be more titles in places we want to follow this path. So, this is not a template, but I want to go where we set expectations.”
The village roadshow has been cornered. Refusing to develop content alongside Village Roadshow, Warner left a chunk of the company’s intellectual property sitting on the sidelines. It chose to sue a court order that forced the studio to include it, claiming it was illegally locked out in at least 15 projects under development.
WB’s lawyer Steve Warren reported at a bankruptcy hearing Tuesday that the company reported Reuters that the arbitrator had ruled against the village roadshow, but the company has filed it in court that it remains unresolved three years later, and the company has moved to arbitration. Keith Maib’s chief director wrote in a court application that the legal dispute “irreparably hindered the work relationship” with the studio, wiping away the lucrative revenue stream from the exploitation of a new project the company with WB was working with.
Warner could emerge as a bidder for Justin Bernbrock, a bidder for the Village Roadshow library. The company has reached a tentative agreement to sell its intellectual property to investment company content partners for $365 million, which is the baseline. Village Roadshow is keeping a higher bid that could also come from the Blade Runner 2049 Coproducer Alcon Entertainment. (In 2017, when Vine acquired a majority stake in Village Roadshow, it also spent shares in Alcon).
Over the nearly three years of lawsuit, Village Roadshow has beenaring more than $18 million in legal costs, almost all of which remain unpaid. This does not take into account potential arbitration awards against the company that blocked efforts to avoid filing Chapter 11 bankruptcy protection. He said in court that he had acquired “meaning benefits” from the company or potential buyers of its assets, valued at $100 million to $500 million, but that the unknown result of the arbitration and its flame studio business have curtailed the termination of the transaction.
Another factor that overturns the future in Hollywood: Orders from the American Writers Guild prohibit members from cooperating with the Village Roadshow after failing to pay a large number of writers. Guild members will bear approximately $1.4 million in burden. Myve said it had a detrimental effect on the reputation in the industry.
Other creditors include Brian Cranston’s Moonshot Entertainment ($794,000), Kevin Garnett’s Content Cartel ($395,000), and Sony Pictures Television ($250,000).
Village Roadshow has been trouble getting funding to bring it to light, so it has arranged about $13 million in funding, including Falcon investments and Ontario teacher pension plans, to carry it through bankruptcy. The agreement is subject to the approval of controversial provisions in borrowing agreements that “roll up” existing obligations into new loans, and places them effectively at the forefront of the line to collect them.
