Producer behind 'Joker,' 'The Matrix' files for bankruptcy
What's the story
Village Roadshow Entertainment Group, the indie producer behind popular franchises like The Matrix and Joker, recently filed for bankruptcy.
The company cited ongoing arbitration with its long-time partner Warner Bros. and an "overly ambitious" studio expansion as key factors while filing Chapter 11 bankruptcy in a Delaware court on Monday.
Despite attempts to reduce costs and sell itself last year, uncertainty surrounding the pending arbitration has made it impossible for the company to sustain operations, leading to this bankruptcy filing.
Financial woes
What's going on between Village Roadshow and WB?
Village Roadshow has been locked in a battle with Warner Bros. over The Matrix Resurrections, a 2021 sequel. The company's complaint alleged that Warner Bros. breached their contract by releasing the feature on HBO Max the same day as theaters.
This arbitration (method of resolving disputes without going to court) has led to over $18 million in legal fees—nearly all unpaid—and threatens the company's financial stability.
The company also cited substantial liabilities due to unpaid contracts with writers and consultants.
Debt details
Village Roadshow's debt and restructuring efforts
According to court documents, Village Roadshow holds $223.8 million in asset-backed secured notes and $163.1 million of senior secured debt.
The company disclosed a stalking horse bid (initial bid made on the assets of a bankrupt company) of $365 million for its library and a debtor-in-possession (DIP) facility to finance operations under court supervision.
The library assets earn about $50 million a year in revenue.
Steve Mosko, who had been CEO since 2018, resigned in January amid these losses.
Warner Bros. dispute
Village Roadshow's relationship with Warner Bros. and future plans
Village Roadshow detailed its once "prolific co-production, co-financing, and co-ownership relationship with WB," with the production, ownership and derivative rights stemming from 89 titles - including the Matrix franchise.
But two major issues caused the company's financial downfall: the WB arbitration and the botched attempt to produce independent films, scripted and unscripted television series.
The company has been seeking a sale since early 2024 and has since slashed its staff to 11.
Company legacy
Village Roadshow's history and impact on the film industry
Founded in 1997, Village Roadshow has produced and released over 100 films including Mad Max: Fury Road, Ready Player One, and Wonka.
Despite its financial struggles, Village Roadshow's impact on the film industry remains significant.