The suit stems from Warner Bros.’ controversial move to release its entire 2021 theatrical slate simultaneously on its streaming service, including “Dune,” “The Suicide Squad” and “King Richard.” The studio ended up paying out millions of dollars to profit participants to make up for lost box office revenue.
Village Roadshow has a longstanding co-financing arrangement with the studio, which has included films like the “Matrix” trilogy, “Joker,” and the “Oceans” series. The suit alleges that Warner Bros. did not consult with or notify Village Roadshow before opting to put “The Matrix Resurrections” — the fourth installment in the franchise — on HBO Max.
The film has grossed just $148 million at the box office to date — a fraction of the gross reaped by the three earlier films. The suit accuses Warner Bros. of deliberately harming the film’s box office to prop up HBO Max, at the expense of the future viability of the franchise.
“WB’s strategy not only ensured that ‘The Matrix Resurrections’ would be a bust at the box office, but it also inflicted serious harm to the entire ‘Matrix’ franchise,” the suit alleges. “There can be no doubt that the abysmal theatrical box office sales figures from ‘The Matrix Resurrections’ dilute the value of this tent pole franchise as a film’s lack of profitability generally prevents studios from investing in additional sequels and derivative films in the near term.”
Village Roadshow also argues that the simultaneous release also facilitated piracy, further cutting into the film’s revenue potential.
The suit states that Warner Bros. made “acceptable accommodations” with the film’s stars — Keanu Reeves and Carrie-Anne Moss — and with director Lana Wachowski. The suit also states that Warner Bros. came to terms with Legendary, the co-financier of “Dune,” but “shut down negotiations with one of its longest-term relationships” — that is, with Village Roadshow. To date, Village Roadshow has received nothing from the HBO Max release of “The Matrix Resurrections,” the suit states.
Village Roadshow notes that Warner Bros. delayed some of its wholly owned projects — “The Batman” and “Black Adam” — into 2022, and will be giving them exclusive theatrical releases. The suit also cites the success of the exclusive theatrical release of Sony and Disney’s “Spider Man: No Way Home,” arguing that Warner Bros.’ simultaneous release strategy was not necessitated by the pandemic.
The suit also states that — due to the poor box office results — Village Roadshow cannot make its contractually obligated payment to Warner Bros., putting the company at risk of losing its rights to the film.
The suit alleges that Warner Bros. has also been seeking to deprive the company of its rights to other films, including “Charlie and the Chocolate Factory” and “Edge of Tomorrow.”
In a statement, Warner Bros. said it had brought an arbitration case against Village Roadshow.
“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,” the studio said. “We have no doubt that this case will be resolved in our favor.”
Village Roadshow is seeking a declaration from the court that Warner Bros. breached its agreement. The company argues that its arbitration agreement does not preclude Village Roadshow from seeking non-monetary relief in court.