How ‘The Matrix’ helped build—and break—beleaguered production company Village Roadhouse

The name Village Roadshow might not ring a bell with every moviegoer, but "> the company’s logo almost certainly will. Its shimmering, nested “V” of metallic ribbons that taper inward like a cinematic illusion played before dozens of movies that collectively spawned 34 No. 1 opening weekends, 19 Academy Awards, and $19 billion in worldwide box office gross.

The veteran production house behind seismic hits like The Matrix, Ocean’s 11, and Mad Max: Fury Road has been delivering hits for decades, mostly through coproductions with Warner Bros. But last week, following a years-long decline in box office performance, the company filed for bankruptcy. How did a highly pedigreed cinematic powerhouse—the same force behind some of this century’s biggest films—end up in Chapter 11? It’s a complicated answer, one that—like several other recent corporate downfalls—is rooted in the COVID-19 pandemic.

From the drive-in to ‘The Joker’

Village Roadshow started in Australia in 1954 as a drive-in theater operation. Over the next few decades, it extended its tentacles into regular theater business and home video, before launching a film production shingle: Village Roadshow Pictures. True to the company’s Australian roots, its first-ever movie, 1989’s "> The Delinquents, was set in the Outback and starred a young Kylie Minogue. A few years later, the 1992 sci-fi flick"> Fortress delivered the company’s first hit, but Village Roadshow became a true force in 1997, when it entered into a co-financing and distribution partnership with Warner Bros.

It didn’t take long for the Village Roadshow-Warner Bros. partnership to find explosive success. In 1999 alone, the team-up yielded several major, genre-spanning hits, including Sopranos-adjacent mob comedy Analyze This, schlocky shark horror Deep Blue Sea, and director David O. Russell’s breakthrough, Three Kings, and the culture-shifting sci-fi epic The Matrix. Though the initial partnership deal outlined a plan for making 20 features together over a five-year period, Village Roadshow ultimately ended up collaborating with Warner Bros. on 91 of 108 total movies over the decades that followed, according to its bankruptcy filing.

The company’s hitmaking era continued all the way through to 2019’s billion-plus grossing Joker. It was around that time, though, that Village Roadshow made a decision that would factor heavily into its undoing: embarking on a mission to release more projects independently.

“From 2018 to 2020, following a shift in the Company’s equity-holders and change in management, the Company expanded its business model and dedicated a meaningful portion of its resources to creating the Studio Business,” the bankruptcy filing details. Village Roadshow’s pivot to a “full service shop” for developing new projects meant taking on more staff, forging more partnerships, and spending more capital on various deals. 

It would take years to realize they had bitten off more than they could chew.

A ‘Matrix’-sized dispute

Village Roadshow’s foray into studio business reportedly put into development 99 feature films, 67 unscripted TV shows, and 166 scripted TV shows. This flurry of content creation didn’t bear much fruit, though. Only six of those films ended up going into production—the most prominent of which may be Yassir Lester’s little-seen bowling comedy The Gutter—alongside five unscripted series and two scripted ones. As the filing details, Village Roadshow spent approximately $47.5 million on these efforts, none of which has yet to return a meaningful profit. The company might have been able to offset those costs with revenue from more Warner Bros co-productions—had that partnership not ruptured spectacularly in the early days of the pandemic.

The Matrix Resurrections, the franchise’s feverishly anticipated fourth installment, was originally scheduled to debut in theaters back in May 2021. But with the box office still sluggish and the COVID-19 vaccines just starting to roll out, Warner Bros. delayed the would-be blockbuster’s release to April 2022, when it stood a better chance of performing well. That date was later shuffled again, though, this time as part of Warner Bros’s controversial strategy to release its entire 2021 slate of heavyweight titles like Dune and Godzilla vs. Kong on HBO Max the same day they hit theaters. The December 2021 release date for Matrix Resurrections ensured it would be part of that home viewing experiment.

While the lukewarm reviews likely didn’t help, the film’s immediate streaming availability likely contributed to its disappointing $157 million worldwide gross—roughly a third of what the original Matrix earned 22 years earlier. Since Village Roadshow’s deal relied on theatrical revenue for its earnings from the movie, the company sued Warner Bros in 2022, alleging it had shoehorned Resurrections into its 2021 release slate in order to “create a desperately needed wave of year-end HBO Max premium subscriptions.”

The two companies have spent the years since entangled in ugly, costly arbitration. According to the bankruptcy filing, Village Roadshow has already incurred $18 million in legal fees, “nearly all of which remains unpaid.” As the legal costs piled up and the projects Village Roadshow developed under its own banner devoured more cash, there were (understandably) no splashy new Warner Bros collaborations in the hopper to keep the ship afloat. 

“Even if the WB Arbitration is resolved, the Company believes that it has irreparably decimated the working relationship between WB and the Company, which has been the most lucrative nexus for the Company’s historic success in the entertainment industry,” reads the filing. (Neither Village Roadshow nor Warner Bros. responded to Fast Company’s request for comment.)

During the first half of 2024, Village Roadshow Pictures entered a wave of layoffs that saw its staff downsize from 45 employees to nine. That same year, the company brought in Goldman Sachs to explore the possibility of a sale that might preserve its production arm. But the dark cloud of an ongoing arbitration ultimately made such a sale impossible. The best option, Village Roadshow concluded, was selling off its library assets—the filing mentions an unnamed bidder offering $365 million for them—and selling its derivative rights separately. In the end, Village Roadshow decided that declaring bankruptcy would lead to a sale that maximized its assets.

For a production company with such an illustrious history, it’s not exactly a Hollywood ending.

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