Village Roadshow: $417.5M Sale of Film Rights Follows Warner Bros. Break
Village Roadshow Entertainment Group, producer of 108 films including The Matrix trilogy, Joker, and Ocean's Eleven series that generated $19 billion at the box office, filed chapter 11 in March 2025 after a 28-year Warner Bros. partnership collapsed over Matrix Resurrections streaming rights. Following $18 million in litigation costs, Alcon Media Group acquired the film library for $417.5 million plus derivative rights for $18.5 million, outbidding a stalking horse and fending off Warner Bros. objections.
Village Roadshow Entertainment Group USA Inc., an independent film financier behind franchises including The Matrix trilogy, Joker, Ocean's Eleven, Mad Max: Fury Road, and Wonka, filed for chapter 11 bankruptcy on March 17, 2025, ending a 28-year partnership with Warner Bros. after litigation over streaming rights. The Los Angeles-based producer sought bankruptcy protection after three years of litigation with Warner Bros. and $18 million in legal fees made an out-of-court sale impossible.
The catalyst for the breakdown was Warner Bros.' "Project Popcorn" initiative, which released The Matrix Resurrections simultaneously on HBO Max and in theaters—a decision that Village Roadshow alleged violated their contractual arrangements. What followed was an arbitration dispute, a federal lawsuit, sealed objections, and a contested bankruptcy sale that saw Alcon Media Group acquire the film library for $417.5 million at auction, outbidding the stalking horse by more than $50 million.
Alcon then acquired the derivative rights—the contractual rights to produce sequels, prequels, remakes, and spinoffs—for an additional $18.5 million after 10 rounds of bidding with Warner Bros. The studio filed objections and appeals that were denied, leaving Alcon as the holder of rights to The Matrix, Practical Magic, Mad Max, and other franchises.
| Debtor(s) | Village Roadshow Entertainment Group USA Inc. |
| Headquarters | Los Angeles, California (Burbank) |
| Industry | Film Production & Financing |
| Established | 1997 (U.S. entity; parent company founded 1954 in Australia) |
| Petition Date | March 17, 2025 |
| Court | U.S. Bankruptcy Court, District of Delaware |
| Case Number | 25-10487 (Lead) |
| Judge | Hon. Thomas M. Horan |
| Total Debtors | 35 (VREG USA + 34 affiliated debtors) |
| Assets at Filing | $100 million – $500 million |
| Liabilities at Filing | $500 million – $1 billion |
| Prepetition Senior Secured Notes | $163.1 million+ |
| Prepetition Second Lien Notes | $223.8 million+ |
| DIP Facility | $12.78 million |
| Stalking Horse | CP Ventura LLC ($365 million) |
| Winning Bidder | Alcon Media Group, LLC |
| Library Purchase Price | $417.5 million |
| Derivative Rights Price | $18.5 million |
Company Background
Village Roadshow's history spans seven decades and includes a long partnership with Warner Bros. The background below summarizes the company's origins and the co-financing relationship that produced its film library.
Origins in Australia. The company traces its roots to 1954, when Roc Kirby founded Village Drive-Ins with one of Australia's first drive-in cinemas in Croydon, Victoria. Over the following decades, Kirby expanded the business. In 1968, the company formed "Roadshow" as its theatrical distribution arm. Three years later, in 1971, Village Roadshow entered a partnership with Warner Bros. to distribute films throughout Australia and New Zealand.
The company listed on the Australian Securities Exchange in 1988, the same year it acquired the assets of De Laurentiis Entertainment Group, establishing a U.S. presence for the first time. This acquisition included production facilities and library rights ahead of the partnership that followed.
The Warner Bros. Partnership. In 1997, Village Roadshow Pictures Group was established as a U.S. co-financing partner with Warner Bros., creating the arrangement that would produce over 100 films across the next quarter century. The structure was straightforward: Village Roadshow provided co-financing in exchange for participation in revenues and contractual rights to derivative works.
The partnership produced over 100 films. Films co-produced with Warner Bros. achieved 34 #1 U.S. box office openings and won 19 Academy Awards from 50 nominations, along with six Golden Globe Awards. In 2012, Warner Bros. and Village Roadshow extended their co-financing first-look deal through 2017. Two years later, in 2014, the company established a separate co-financing production deal with Sony Pictures Entertainment, which commenced with The Equalizer and Annie.
By this point, the U.S. and Australian operations were separate. The Los Angeles-based Village Roadshow Entertainment Group USA Inc. operated independently from its Australian parent, which retained less than 3% ownership and had no control over U.S. operations since 2017.
The 108-Film Library
The film library was marketed separately in the sale process and attracted bids above $400 million. The 108 films in the library had generated $19 billion in total box office receipts and continued to produce approximately $50 million in annual revenue from licensing, streaming, and other exploitation.
The library's major titles include:
| Franchise/Film | Year(s) | Box Office Significance |
|---|---|---|
| The Matrix trilogy | 1999-2003 | Original grossed $783M adjusted; Reloaded $1.1B; Revolutions $646M |
| Joker | 2019 | $1.07B worldwide; first R-rated film to cross $1B |
| Ocean's Eleven series | 2001-2007 | Combined gross exceeding $1.1B |
| Mad Max: Fury Road | 2015 | $380M worldwide; 6 Academy Awards |
| Wonka | 2023 | $634M worldwide |
| The Great Gatsby | 2013 | $353M worldwide |
| Sully | 2016 | $240M worldwide |
| The LEGO Movie | 2014 | $469M worldwide |
| Ready Player One | 2018 | $582M worldwide |
| Sherlock Holmes | 2009-2011 | Combined gross exceeding $545M |
| Practical Magic | 1998 | Included in library |
The library was sold with Warner Bros. retaining distribution rights to the library films. The derivative rights—the ability to greenlight and co-finance sequels, prequels, remakes, and spinoffs—were sold separately.
Understanding Co-Financing Structures
The co-financing model that Village Roadshow used with Warner Bros. shaped the assets sold in the case. In a typical co-financing arrangement, the financier provides a portion of a film's production budget—often 25% to 50%—in exchange for a commensurate share of revenues and participation rights in derivative works.
For Village Roadshow, this meant sharing in theatrical box office, home video sales, television licensing, and streaming revenues, along with participation rights in derivative works. When The Matrix proved successful, Village Roadshow held contractual rights to participate in sequels—and did so through three additional films.
The partnership lasted nearly 25 years and produced 34 #1 U.S. box office openings.
Village Roadshow said the day-and-date release departed from the "normal way" distribution term in its agreements.
The Warner Bros. Breakdown
The collapse of the Village Roadshow-Warner Bros. partnership followed Warner Bros.' "Project Popcorn" decision, which Village Roadshow claimed violated the terms of their co-financing agreements.
"Project Popcorn" and The Matrix Resurrections
In late 2020, Warner Bros. announced it would release its entire 2021 theatrical slate simultaneously on HBO Max and in theaters, a strategy internally dubbed "Project Popcorn." The initiative was a response to COVID-19-era theater closures.
The Matrix Resurrections, the fourth installment in the franchise, became the point of dispute. Warner Bros. moved up the film's release from 2022 to December 22, 2021—and released it day-and-date on HBO Max. Village Roadshow argued this violated the 25-year partnership term that specified the studio would distribute films "in the normal way."
Matrix Resurrections grossed $37 million domestically and approximately $149 million worldwide compared to the franchise's history:
| Film | Year | Worldwide Box Office |
|---|---|---|
| The Matrix | 1999 | $783 million (adjusted) |
| The Matrix Reloaded | 2003 | $1.1 billion |
| The Matrix Revolutions | 2003 | $646 million |
| The Matrix Resurrections | 2021 | $149 million |
For comparison, Spider-Man: No Way Home grossed nearly $750 million domestically during the same theatrical window.
Warner Bros. delayed some of its wholly owned projects—including The Batman and Black Adam—into 2022 to give them exclusive theatrical windows. Village Roadshow said the co-financed films were treated differently.
$18 Million in Litigation
On February 7, 2022, Village Roadshow filed suit against Warner Bros. for breach of contract. The complaint alleged that Village Roadshow received nothing from the HBO Max release of The Matrix Resurrections despite the film being made available to millions of subscribers. The lawsuit further accused Warner Bros. of shutting Village Roadshow out of its legal and contractual rights to co-own and co-finance sequels, prequels, and spinoffs across 89 films the companies had funded and co-owned together.
Warner Bros. responded. The studio characterized the lawsuit as "frivolous" and "duplicitous," noting that it had commenced arbitration against Village Roadshow the week before the lawsuit was filed. Warner Bros. accused Village Roadshow of attempting to avoid its contractual commitment to resolve disputes through arbitration.
The litigation continued for three years before Village Roadshow's bankruptcy. The arbitration resulted in a $125 million award in favor of Warner Bros. on the Matrix Resurrections dispute.
Meanwhile, Village Roadshow incurred $18 million in legal fees fighting its former partner. The combination of the arbitration loss, ongoing legal costs, and uncertainty about the pending disputes rendered an out-of-court sale impossible.
Path to Bankruptcy
By 2024, Village Roadshow had slashed costs and attempted to sell itself as a whole, but the uncertainty surrounding the pending Warner Bros. arbitration made a comprehensive transaction difficult. Prospective buyers could not value the derivative rights when their enforceability remained contested.
The company's capital structure further constrained its options:
| Debt Tranche | Principal Amount |
|---|---|
| Prepetition Senior Secured Notes | $163,075,096.60+ |
| Prepetition Second Lien Notes | $223,820,605.53+ |
| Prepetition Bridge Notes (Tranche 3) | $5,786,104.96 |
| Total Prepetition Secured Debt | $386+ million |
With liabilities in the $500 million to $1 billion range, Village Roadshow entered chapter 11 with a stalking horse bidder already lined up.
The prepetition senior secured notes and second lien notes totaled over $386 million in principal alone.
The 363 Sale Process
Village Roadshow structured its bankruptcy around a 363 sale from the outset, filing its sale motion on the same day as the chapter 11 petition. The debtors obtained DIP financing to fund operations during the sale process and established bidding procedures.
DIP Financing
The DIP facility included the following terms:
| Term | Details |
|---|---|
| Total DIP Facility | $12,786,104.96 |
| Initial DIP Loans (Interim) | $500,000 |
| Final DIP Loans | $6,500,000 (total $7M with Initial) |
| DIP Roll-Up | $5,786,104.96 (Tranche 3 Bridge Notes) |
| DIP Agent | FMP Agency Services, LLC |
| UCC Carve-Out | $1.4 million |
| Interim Order | March 19, 2025 |
| Final Order | April 24, 2025 |
The DIP roll-up component converted approximately $5.8 million of prepetition bridge financing into postpetition DIP loans. The prepetition secured parties received adequate protection through replacement liens, super-priority claims, periodic payments, and reimbursement of reasonable legal fees.
Bidding Procedures and Stalking Horse
The debtors designed a multi-track sale process allowing bids on individual asset categories or the entire enterprise. Prospective buyers could bid on:
- Library Assets — The 108-film content library
- Derivative Rights — Sequel, remake, spinoff, and prequel rights
- Studio Business — Ongoing production and operations
- All Assets — Comprehensive bid for the entire enterprise
CP Ventura LLC served as the stalking horse bidder with a $365 million bid for the library assets. CP Ventura's representatives were Steven Kram and Steven Blume, co-founders of Content Partners LLC. The bidding procedures order prohibited break-up fees, expense reimbursement, or topping fees for non-stalking-horse bidders.
The Auction
Multiple parties expressed interest in the library assets, with Alcon Media Group emerging as the successful bidder at $417.5 million—more than $52 million above CP Ventura's stalking horse bid. The library sale closed on June 18, 2025.
The derivative rights presented a separate auction. These rights—distinct from the library itself—controlled who could greenlight sequels, prequels, remakes, and spinoffs of the 108 films in the catalog.
Warner Bros. participated as a bidder, setting the baseline price. The auction extended through 10 rounds of competitive bidding. Warner Bros. ultimately bid $17.5 million, and Alcon prevailed at $18.5 million.
Warner Bros. had litigated over the derivative rights during the case and then participated in the auction. Alcon acquired the rights for $18.5 million, with Warner Bros. as the back-up bidder at $17.5 million.
| Asset | Winning Bidder | Price | Backup Bidder |
|---|---|---|---|
| Film Library (108 films) | Alcon Media Group, LLC | $417.5 million | CP Ventura LLC ($365M) |
| Derivative Rights | Alcon Media Group, LLC | $18.5 million | Warner Bros. Entertainment Inc. ($17.5M) |
| Studio Business | Alcon Media Group, LLC | $4.25 million + liabilities | — |
| Total Known Proceeds | $440.25+ million |
Warner Bros. Objections and Appeals
The Village Roadshow bankruptcy included litigation with Warner Bros. Entertainment Inc., which objected to the DIP financing and sale process. Much of the litigation was conducted under seal.
Legal Arguments
Warner Bros. raised multiple objections to the sale proceedings. The studio argued that Village Roadshow's assets could not be sold absent Warner Bros.' consent under Section 365 of the Bankruptcy Code, which governs the assumption and assignment of executory contracts. Specifically, Warner Bros. characterized the relevant agreements as financial accommodations, personal services contracts, and intellectual property licenses—categories that receive special treatment under Section 365 and often cannot be assigned without consent.
| Matter | Docket | Date Filed |
|---|---|---|
| DIP Objection (Sealed) | Dkt. 144 | April 7, 2025 |
| DIP Objection (Redacted) | Dkt. 151 | April 7, 2025 |
| Omnibus Objection to Sale (Sealed) | Dkt. 518 | June 13, 2025 |
| Supplemental Objection (Sealed) | Dkt. 908 | October 6, 2025 |
The Section 365 Battle
Warner Bros.' core legal argument centered on Section 365 of the Bankruptcy Code, which governs how debtors may assume (continue) or reject (terminate) executory contracts—and whether those contracts may be assigned to third parties. The provision contains several exceptions that prevent assignment even when a debtor wishes to sell.
Warner Bros. argued that the co-production agreements fell within multiple non-assignable categories. Section 365(c)(1) prohibits assignment of contracts that are "financial accommodations" to the debtor. Section 365(c)(2) addresses contracts to make loans or extend financial accommodations. Section 365(c)(1)(A) prevents assignment when applicable law would excuse the non-debtor party from accepting performance from an assignee—a provision commonly invoked for personal services contracts and intellectual property licenses.
Village Roadshow and Alcon countered that the specific contracts at issue did not fall within these exceptions—or that, even if they did, the exceptions did not apply given the particular sale structure. The court's memorandum opinion, issued November 5, 2025, resolved these questions in the debtors' favor, finding the derivative rights assignable over Warner Bros.' objections.
Judicial Resolution
The bankruptcy court rejected Warner Bros.' arguments. On November 5, 2025, the court issued a memorandum opinion addressing the derivative rights sale, followed by a sale order entered November 12, 2025. The court found the debtors' arguments on business judgment, assignability, and adequate assurance decisive.
Warner Bros. immediately appealed and filed an emergency motion to stay the sale pending appeal. The bankruptcy court denied the stay motion on November 25, 2025, and the District Court issued its final order denying the appeal on November 26, 2025—ending Warner Bros.' efforts to block the transaction.
The result, as Village Roadshow's counsel Sheppard Mullin characterized it, was an "industry-shaping asset sale" that overcame opposition from Warner Bros. The court's rulings found the derivative rights assignable.
Alcon Media Group: The Acquiring Party
The auction's winner, Alcon Media Group, was co-founded by Andrew Kosove and Broderick Johnson.
Blade Runner precedent. In 2011, Alcon acquired the entire Blade Runner franchise from producer Bud Yorkin, obtaining rights to syndication, franchising, and derivative media including prequels and sequels. The deal entitled Alcon to develop new Blade Runner content—a right the company exercised with Blade Runner 2049 in 2017. The terms prohibited a remake of the original film.
Pre-acquisition library. Prior to the Village Roadshow transaction, Alcon's library included Blade Runner 2049, The Blind Side, Insomnia, Prisoners, My Dog Skip, and the Garfield franchise. The Village Roadshow acquisition expanded this foundation.
Post-acquisition position. With the Village Roadshow library, Alcon now holds approximately 150 titles, making it the "copyright holder of one of the largest independent feature film libraries in the world". Alcon controls the derivative rights to The Matrix, Practical Magic, Mad Max, Ocean's Eleven, Joker, Wonka, and dozens of other franchises. Warner Bros. retains distribution rights to these titles, but any sequel, prequel, remake, or spinoff development now requires engagement with Alcon.
The transaction closed on June 18, 2025, with Loeb & Loeb serving as Alcon's legal counsel.
Industry implications. The Village Roadshow acquisition left Alcon controlling derivative rights to The Matrix, Ocean's Eleven, Mad Max, Practical Magic, Joker, Wonka, and other franchises, while Warner Bros. retained distribution rights. The bankruptcy court's rulings on assignability under Section 365 resolved the parties' dispute over whether the derivative rights could be sold without Warner Bros.' consent. The sale prices—$417.5 million for the library and $18.5 million for derivative rights—established the value assigned to those assets in the case.
Other Parties in Interest
Beyond the principal contest between Alcon and Warner Bros., several other parties participated actively in the case.
Regency Entertainment. Regency Entertainment (USA), Inc. filed a supplemental objection to the derivative rights sale in October 2025.
Moonshot Entertainment. Moonshot Entertainment, Inc. filed an objection that was ultimately resolved, with the matter concluded by September 2025.
EuropaCorp. The French production company entered a stipulation modifying the automatic stay.
CP Ventura. Despite losing the auction to Alcon, CP Ventura remained involved in the case and entered stipulation agreements in December 2025.
Falcon Strategic Partners. Falcon Strategic Partners IV, LP participated as a party in interest.
Professional Retentions
The case employed debtor and committee professionals typical for a Delaware chapter 11 case.
Debtors' Professionals
| Professional | Role |
|---|---|
| Sheppard, Mullin, Richter & Hampton LLP | Lead Counsel |
| Young Conaway Stargatt & Taylor, LLP | Delaware Co-Counsel |
| GBH SOLIC Holdco, LLC / SOLIC Capital, LLC | Investment Banker |
| Hilco Real Estate, LLC | Real Estate Advisor |
| Kurtzman Carson Consultants, LLC | Claims/Noticing Agent |
The firm characterized its representation as guiding Village Roadshow to a "complete legal victory" in the face of Warner Bros. opposition.
Official Committee of Unsecured Creditors
| Professional | Role |
|---|---|
| Pachulski Stang Ziehl & Jones LLP | Lead Counsel |
| Kirkland & Ellis LLP | Co-Counsel |
| Dundon Advisers | Financial Advisor |
The committee participated in sale-related proceedings and the ongoing plan process.
Professional Fee Applications
By December 2025, professionals had begun filing final fee applications:
| Professional | Application Type | Date Filed |
|---|---|---|
| Sheppard, Mullin, Richter & Hampton LLP | Final Application | December 23, 2025 |
| Young Conaway Stargatt & Taylor, LLP | Final Application | December 23, 2025 |
| Hilco Real Estate, LLC | First and Final | December 23, 2025 |
| Pachulski Stang Ziehl & Jones LLP | Seventh Monthly | December 1, 2025 |
| SOLIC Capital, LLC | Sixth Monthly | November 24, 2025 |
The major asset sales were completed and Warner Bros.' appeals were denied. The UCC continued filing monthly fee applications during the plan process.
Case status. As of December 2025, the Village Roadshow bankruptcy remains active with the debtors' exclusivity period extended for plan filing. The $417.5 million library sale and $18.5 million derivative rights sale have closed, and Warner Bros.' appellate challenges have been exhausted.
Key Timeline
| Date | Event |
|---|---|
| 1954 | Village Drive-Ins founded in Australia by Roc Kirby |
| 1968 | "Roadshow" theatrical distribution arm formed |
| 1971 | Warner Bros. partnership for Australian/NZ distribution |
| 1988 | Village Roadshow acquires De Laurentiis Entertainment Group assets |
| 1997 | VREG USA co-financing partnership with Warner Bros. established |
| 2012 | Warner Bros. extends co-financing deal through 2017 |
| 2014 | Village Roadshow establishes Sony Pictures co-financing deal |
| December 22, 2021 | The Matrix Resurrections released day-and-date on HBO Max |
| February 7, 2022 | Village Roadshow sues Warner Bros. for breach of contract |
| 2022-2024 | Three-year arbitration and litigation with Warner Bros. |
| 2024 | Village Roadshow attempts (and fails) to sell company |
| March 17, 2025 | Chapter 11 petition filed |
| March 17, 2025 | Sale motion filed with CP Ventura as stalking horse |
| March 19, 2025 | Interim DIP order entered |
| April 7, 2025 | Warner Bros. files DIP objection (sealed) |
| April 24, 2025 | Final DIP order entered; bidding procedures approved |
| May 29, 2025 | Alcon designated successful bidder for library |
| June 13, 2025 | Warner Bros. files omnibus objection to sale (sealed) |
| June 18, 2025 | Library sale to Alcon closes at $417.5 million |
| October 6, 2025 | Warner Bros. files supplemental objection (sealed) |
| November 5, 2025 | Court issues memorandum opinion on derivative rights sale |
| November 12, 2025 | Derivative rights sale order entered ($18.5M to Alcon) |
| November 25, 2025 | Warner Bros. stay motion denied |
| November 26, 2025 | District Court denies Warner Bros. appeal |
| December 3, 2025 | Exclusivity extended for plan filing |
| December 23, 2025 | Final professional fee applications filed |
Frequently Asked Questions
What films are in the Village Roadshow library?
The library contains 108 films co-produced with Warner Bros. between 1997 and the filing date, including The Matrix trilogy, Joker, Ocean's Eleven series, Mad Max: Fury Road, Wonka, The Great Gatsby, Sully, The LEGO Movie, Ready Player One, Sherlock Holmes, and Practical Magic. The films have generated $19 billion in cumulative box office receipts and won 19 Academy Awards.
Who bought Village Roadshow's film library?
Alcon Media Group acquired the library for $417.5 million at auction, outbidding stalking horse CP Ventura LLC's $365 million offer. Alcon also acquired the derivative rights for an additional $18.5 million and the studio business for $4.25 million plus assumed liabilities.
What are "derivative rights" and why are they valuable?
Derivative rights grant the holder the ability to develop sequels, prequels, remakes, and spinoffs of existing films. Alcon's $18.5 million acquisition gives it control over future development of Matrix, Ocean's, Practical Magic, Joker, and other franchises. Warner Bros. retains distribution rights, but cannot greenlight derivative works without Alcon's participation.
Why did Village Roadshow sue Warner Bros.?
Village Roadshow alleged breach of contract after Warner Bros. released The Matrix Resurrections simultaneously on HBO Max and in theaters under the "Project Popcorn" initiative. The company claimed it received nothing from the streaming release despite its co-financing participation. The dispute covered 89 films co-owned by the parties.
Did Warner Bros. try to block the sale?
Yes. Warner Bros. filed multiple objections—many under seal—to the DIP financing, library sale, and derivative rights sale. The studio argued the contracts could not be assigned without consent and filed an appeal of the derivative rights sale. All objections and the appeal were denied.
How much did the Warner Bros. litigation cost Village Roadshow?
Legal fees from the three-year dispute cost Village Roadshow $18 million. The company also lost a $125 million arbitration award to Warner Bros. on the Matrix Resurrections claims.
Is Village Roadshow related to the Australian company of the same name?
The U.S. company—Village Roadshow Entertainment Group USA Inc.—operated independently from Australian parent Village Roadshow Limited, which owns less than 3% of the U.S. entity and has had no control since 2017. Only the U.S. operations are in bankruptcy.
What is Alcon's total library now?
With the Village Roadshow acquisition, Alcon controls approximately 150 titles. The combined library includes Blade Runner 2049, The Blind Side, Prisoners, and the entire Village Roadshow catalog.
How did The Matrix Resurrections perform at the box office?
The Matrix Resurrections grossed $37 million domestically and $149 million worldwide, compared with prior franchise entries that ranged from $646 million (Revolutions) to $1.1 billion (Reloaded).
Is the bankruptcy case over?
No. As of December 2025, the case remains active. The library and derivative rights sales have closed, and Warner Bros.' appeals have been denied, but the plan process continues. Exclusivity for the debtors to file a chapter 11 plan has been extended.
Who is the claims agent for Village Roadshow?
Verita Global (Kurtzman Carson Consultants) serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.
For more bankruptcy news and restructuring analysis, visit the ElevenFlo blog.
