Village Roadshow, a longtime production shingle responsible for bankrolling movies like The Matrix and Joker, went bankrupt earlier this year — and now, their longtime partners at Warner Bros. won’t be able to make sequels to a number of their biggest franchises without jumping through some significant hoops.
During a May bankruptcy auction, Warner Bros. executives bid on derivative rights, which dictate the terms under which a studio can make some sequels and remakes, but ultimately lost out to Alcon Entertainment, who snagged the rights for $18.5 million. Warners has since tried to offer a higher, revised bid, but on Wednesday, a Delaware bankruptcy court decided it was too little, too late.
Per The Hollywood Reporter, derivative rights to Village Roadshow’s film library will go to Alcon, largely because Warner Bros. waited months to make its follow-up offer.
“Such a course of conduct not only leaves a debtor and its consultation parties with inadequate opportunity to assess a late bid, but it also appears engineered to run down the clock by effectively preventing a debtor from counteroffering or going back to its designated successful bidder to see if there is yet a better deal to be had,” wrote U.S. Bankruptcy judge Thomas Horan in his decision.
The rights include sequel rights to The Matrix, Joker, Ocean’s Eleven, and Wonka. Obviously, The Matrix and Joker are seemingly at a pausing point just now, but there have been persistent rumors about Wonka and Ocean’s sequels for the last couple of years. Now, Warners would be forced into a marriage of convenience with Alcon if they wanted to make those films happen.
Ironically, Village Roadshow points to The Matrix Resurrections as a key reason for its bankruptcy. Roadshow sued Warner Bros. after the studio decided to give Resurrections a day-and-date digital release on HBO Max in 2021. Warners ultimately won a $125 million arbitration award, which Roadshow has not paid. Courts have ordered them to generate at least $110 million through the sale of its assets to satisfy its debts to Warner Bros.
Warners’ last-minute bid seems to have been a result of this disagreement, too: THR reports Warner Bros. offered to match Alcon’s bid and also release Village Roadshow from some of its obligations under the arbitration judgment. Roadshow countered that they wanted $30 million in cash as well as additional concessions from Warner Bros., and the studio walked away from the table.
Warner Bros. is mulling an appeal, but in the meantime, they are moving forward with some projects, including the forthcoming Practical Magic 2, which will be co-financed with Alcon.
“Alcon looks forward to working collaboratively with Warner Brothers, as we have for over a quarter century, to partner in the exploitation of the derivative rights to these many great films across multiple platforms,” said CEOs Andrew Kosove and Broderick Johnson in a statement.
