Update:
Warner Bros. is fed up with studios having problems with their day-and-date release strategy throughout 2021. According to Deadline, Village Roadshow is heading back to court today to put a rush on their lawsuit against WB for porting many of their tentpole films to the HBO Max streaming service.
You can read WB’s scathing new response to Village Roadshow’s lawsuit below:
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.
Hot damn! If that’s not a break-up letter for a 25-year-long partnership I don’t what is.
While WB has yet to file a formal response to Village Roadshow’s February 7 complaint, it does not look like they’ll be going down without a fight. Meanwhile, reps for Village Roadshow’s legal firm Kirkland Ellis did not respond when Deadline requested a comment.
“This dispute belongs in arbitration, which we commenced before Village filed in court,” WB’s 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.
Steel yourselves for more legal drama, folks. This dispute is already getting nasty and the parties involved are just getting warmed up. WB certainly made a bold decision when they announced that much of their 2021 content would be coming to HBO Max, but they had to get studios to sign off, right? You don’t make a move like that without making sure your contributors are on board. Or do you? I suppose we’ll have to keep tabs on this to see what shakes out.
Original Article:
Warner Bros. has been hit with a lawsuit by Village Roadshow over the release of Matrix Resurrections. Village Roadshow officially sued Warner Bros. today in Los Angeles Superior Court, alleging breach of contract. The 50-page complaint took WB to task by saying the company made deliberate and coordinated efforts to eviscerate the significant value of Village Roadshow’s intellectual property.
Warner Bros. clapped back at Village Roadshow by saying, “This is a frivolous attempt by Village Roadshow to avoid their contractual commitment to participate in the arbitration that we commenced against them last week. We have no doubt that this case will be resolved in our favor.”
At the top of the list of movies that Village Roadshow feels was short-changed by WB’s streaming plans is Matrix Resurrections. Village Roadshow says that by releasing Resurrections day-and-date on HBO Max, WB hurt the film’s chances for success in theaters. To put things into perspective, Village Roadshow has a 25-year relationship with Warner Bros. Village Roadshow has ponied up $4.5 billion to produce and distribute nearly 100 films on WB’s behalf. As a part of their complaint, Village Roadshow points out that the Matrix franchise has banked over $2 billion at the box office, and that the latest sequel deserved better representation on the silver screen.
“As the distributor and co-copyright owner, WB has a fiduciary duty to account to Village Roadshow for all earnings from the exploitation of the films’ copyrights, not just those it cannot hide,” the complaint states.
Village Roadshow’s complaint comes hot on the heels of Legendary Entertainment making a fuss about Dune and Godzilla vs. Kong going day-and-date with HBO Max. While Legendary Entertainment did not file an official complaint against WB, the studio’s anger toward the release plan was widely publicized. Perhaps one of the reasons Legendary Entertainment never brought their complaints to court is that WB issued an amount close to $200 million to compensate film partners who felt they’d been done dirty in the deal.
With Covid throwing a wrench is damn near everything, Warner Bros. felt as if their backs were against the wall regarding theatrical releases. Rather than delay every film until it was safe to return to theaters, WB opted to release their 2021 schedule day-and-date on HBO Max. While this gave subscribers access to some of 2021’s biggest blockbusters, it sabotaged box office returns in a major way.
Per the complaint, Village Roadshow railed against WB’s day-and-date strategy, internally known as Project Popcorn. When talking about Project Popcorn, Village Roadshow called the stratagem a “clandestine plan to materially reduce box office and correlated ancillary revenue generated from tent pole films.”
Village Roadshow also has a problem with WB not charging customs a premium fee for access to its blockbuster releases. Even Disney charged Disney+ subscribers upward of $30 for access to certain films. By not charging customers an additional fee to view tentpole releases, Village Roadshow says the company “effectively enticed movie-going audiences away from the theaters.” That move is “completely inconsistent with ‘industry standards’ and ‘customary commercial practices in the motion picture industry.’ Additionally, WarnerMedia benefits by driving up the value of its subsidiary, just as WarnerMedia prepares to spinoff and merge with Discovery, all while providing zero benefit to Village Roadshow, talent and other partners.”
What do you think about Village Roadshow’s Matrix Resurrections lawsuit and complaints? Did WB jump the gun when they moved their 2021 theatrical slate to HBO Max? Let us know what you think in the comments section below.