8 February 2022CopyrightMuireann Bolger

Warner Bros accused of ‘sabotage’ by 'Matrix' filmmaker

Warner Bros is facing a lawsuit from the filmmaking company behind the “Matrix” movies over its decision to release the latest instalment of the franchise in cinemas and its streaming service, HBO Max simultaneously.

Village Roadshow filed the complaint at the Superior Court of California on Monday, February 7.

The company argued that in its efforts to drive viewers to HBO Max, the entertainment conglomerate had deprived the film company of revenue that it would have gained from the theatrical release of “The Matrix Resurrections”.

According to the lawsuit, Village Roadshow has paid Warner Bros over $4.5 billion to produce and distribute nearly 100 films, including “ Joker” and the Oceans series.

Village Roadshow insisted that it co-owns all IP rights to these films and is listed as a co-owner on each film’s copyright registration.

Eviscerated IP

The company held that its lawsuit derived from the “deliberate and consistent coordinated efforts” of Warner Bros to eviscerate the significant value of Village Roadshow’s IP to “prop up” WarnerMedia’s new HBO Max streaming service.

This action, the filing argued, shut Village Roadshow out of its legal and contractual rights to co-own and co-finance the sequels, prequels, spinoffs, and other derivative works of the nearly 100 films that Village Roadshow funded and co-owns.

According to the complaint, Warner Bros had a fiduciary duty to account to Village Roadshow for all earnings from the exploitation of the films’ copyrights.

But it argued that the company’s actions did not “remotely resemble” an honest accounting.

Instead, it contended that Warner Bros and its parent, WarnerMedia, devised “Project Popcorn,” the internal code name for its clandestine plan to materially reduce box office and ancillary revenue generated from films that Village Roadshow and others would be entitled to receive in exchange for driving subscription revenue for the new HBO Max service.

This action, argued the company, “effectively enticed movie-going audiences away from the theaters by streaming these tent pole films day and date on HBO Max for no additional charge, a practice that is completely inconsistent with ‘industry standards’ and ‘customary commercial practices in the motion picture industry’,” it said.

The company argues that Warner Bros’ sole purpose in moving the release date of The Matrix Resurrections forward to 2021 was to create a desperately needed wave of year-end HBO Max premium subscriptions from what it knew would be a blockbuster film.

Devastating results

The entertainment company provided Village Roadshow with no notice and made no mention of this strategy, as the parties’ contracts require, the complaint said.

The suit also argued that the decision was not prompted by the pandemic, pointing to the  success of the exclusive theatrical release of Sony and Disney’s “Spider Man: No Way Home”.

The film company argued that the cumulative result of the disputed action was devastating, as The Matrix Resurrections has gone to earn substantially less than any of the prior films, even though the last of them was released almost 20 years ago

“Warner Bros’ 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 company stated.

“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,” added the filing.

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