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The case highlights escalating tension between talent who stand to profit from theatrical releases and media companies seeking to draw viewers to their streaming services.
The legal battle waged by Village Roadshow accusing Warner Bros. of tanking the value of The Matrix Resurrections is about to go dark.
The judge overseeing the case sided with Warner Bros. on Thursday in an unpublished tentative ruling that the lawsuit should be moved to arbitration. In light of the order, Village Roadshow moved to withdraw its motion seeking to force Warner Bros. to include it on at least 15 projects in development it claims it’s being shut out of. Warner Bros. has objected to the withdrawal.
“Upon review of the Court’s tentative rulings, Village hereby waives its right to the May 27, 2022 hearing on WB’s Motion to Compel Arbitration and WB’s Motion to Strike and accepts the Court’s tentative rulings on the motion to compel arbitration and the motion to strike as final,” reads a filing from Village Roadshow. “The ruling on the motion to compel arbitration should deem Plaintiffs’ Motion for Preliminary Injunction moot.”
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Village Roadshow in February sued Warner Bros. for breach of contract over the studio’s decision to release the Matrix sequel simultaneously on HBO Max and in theaters. Since filing the suit, the case has expanded to include claims that Village Roadshow is being excluded from being a co-owner and financial partner on dozens of sequels and remakes to key franchises based on property it allegedly shares the rights to, including Sherlock Holmes, the Ocean’s series, Ready Player One, I Am Legend, Where the Wild Things Are and Yes Man.
The case is among the most closely watched legal duels in Hollywood as it underscores the growing hostility between talent seeking to preserve the status quo in which they make massive sums through big theatrical releases, often by negotiating backend compensation, and major media companies that have turned to prioritizing their streaming services.
The feud escalated when Village Roadshow took the case out of arbitration and into the public. Village Roadshow argued that it will suffer irreparable harm if it wasn’t allowed to move for an injunction and lift the stay on litigation.
“WB has made clear that it believes it can continue doing exactly what it has been doing,” wrote Village Roadshow, represented by attorney Mark Holscher. “Indeed, given WB’s current position with respect both to releasing these films on HBO Max and refusing to proceed with projects unless Village Roadshow relinquishes its rights, there is an imminent threat that Village Roadshow’s rights on all of these projects are at risk of being eliminated or at least significantly and irreparably impaired.”
Warner Bros., defending its day-and-date release strategy during the COVID-19 pandemic, countered that Village Roadshow “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.”
The major studio emphasized, “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.”
The lawsuit extensively detailed the decay of the duo’s 25-year partnership.
During a discussion about television series based on Edge of Tomorrow, Warner Bros. allegedly “made clear that, going forward, it will not allow Village Roadshow to co-finance and co-own any derivative works from any of the 91 films Village Roadshow co-owns, despite the over $4.5 billion Village Roadshow has paid WB to make and distribute those 91 films.”
Warner Bros. and Village Roadshow didn’t immediately respond to requests for comment.
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