Warner Bros Swings Back At “Duplicitous” Village Roadshow Over ‘Matrix’ Streaming Suit

EXCLUSIVE: Warner Bros is sick and tired of having streaming sand kicked in its face.

As Village Roadshow heads back to the court docket today to further push ASAP on the breach of contract lawsuit the longtime supplier of tentpole flicks filed last week against the WarnerMedia-own studio over box office disappointment The Matrix Resurrections, WB have made a rare move to pull back the veil themselves.

After the usual dry corporate statement they issued last week, a Warner Bros spokesperson Monday took the white gloves off:

Village’s actions have been duplicitous and this dispute is equally contrived. Village was happy to have their name on the credits of the film, traveled to the world premiere in San Francisco, and held themselves out to the media as producers on the film. But they have now reneged on their contractual obligation to pay their share of the cost of the film.

It is notable that throughout 2021, we reached mutually acceptable agreements on all films in the 2021 slate to provide additional compensation to Talent and our partners in light of our “day and date” release strategy during the Covid-19 Pandemic. The only exception was Village, which refused to honor its commitment to pay their share of production costs, rejecting the opportunity we offered to de-risk them from any financial underperformance.

Instead, Village wanted to enjoy the benefit of publicly holding themselves out as co-owners and producers while preserving a “free look” at the ultimate outcome of the film performance without any financial investment on their part.

This is not how we conduct business, certainly not with trusted partners.

Maybe make that ex-trusted partners in what looks now like a death spiral to the more than 25-year old production and lucrative financing relationship between WB and Village Roadshow

Warner Bros has not yet filed any formal response to Village Roadshow’s February 7 complaint. Centering on the late 2020 “Project Popcorn” decision by the Jason Kilar-run company to pivot its 2021 slate to a hybrid strategy of streaming and cinemas because of the Covid pandemic, Village Roadshow’s 50-page filing blasts “the deliberate and consistent coordinated efforts of WB to eviscerate the significant value of Village Roadshow’s intellectual property” – a.k.a. give us the money.

Reps for Village Roadshow’s legal firm Kirkland Ellis did not respond today for request for comment from Deadline.

“This dispute belongs in arbitration, which we commenced before Village filed in court,” WB’s long time outside attorney Daniel Petrocelli told Deadline today. “Village has deliberately defied their contractual arbitration commitment in an attempt to carry out their public relations strategy,” the O’Melveny & Myers LLP partner added.

Whatever the next significant move either side makes, the legal fight follows a period of significant changes at Village Roadshow. Late in 2020, following years of internal turmoil over the company’s direction, a court approved the $440 million takeover of Village Roadshow by BGH Capital. The private equity firm’s control follows several decades during which the company was run by the Kirby family in Australia.

In 2018, former longtime Sony TV chief Steve Mosko landed at Village Roadshow as CEO of its entertainment group. Greg Basser, who founded the company’s entertainment group and motion picture unit in the 1990s, departed at that time. Bruce Berman, who had been head of production at Warner Bros during the heyday of co-CEOs Terry Semel and Bob Daly, stayed on for a time, reporting to Mosko, before exiting as chairman and CEO of Village Roadshow Pictures last fall.

Last fall also saw WB pull the plug on its 40-year Australian distribution deal with Village Roadshow.

Proving that timing can deal a cruel hand, last week’s lawsuit from Village Roadshow was followed two days later by the announcement that the Department of Justice’s Antitrust division gave the green light to mega-merger between WarnerMedia and Discovery. If Village Roadshow were hoping that taking their dispute with WB public would force a quick settlement to avoid any bumps in the merger road, they may have overplayed that hand.

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