Vine Alternative’s CEO James Moore on Village Roadshow’s Bankruptcy, the Legal Fight With Warner Bros., and What’s Next for the Company Behind “The Matrix’ (EXCLUSIVE)

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Despite Village Roadshow, famous for producing films like “The Matrix” and “Joker,” being uncertain about its future following a Chapter 11 filing in the U.S., Vine Alternative Investments, who previously saved the company from significant financial troubles in 2017, is now preparing to depart.

However, CEO James Moore assured EbMaster during his business trip in Paris that it wouldn’t flee, he stated so.

The financial struggles at Village Roadshow, totaling approximately $223.8 million in asset-backed secured notes and $163.1 million of senior secured debt (as detailed in court papers), have been a well-known issue in Hollywood. In fact, the company’s alleged failure to pay its writers on various projects led to its inclusion on the Writers Guild of America’s “strike list.” Additionally, the CEO, Steve Mosko, departed from his role in January. However, industry insiders have expressed doubt about the bankruptcy filing, as Village Roadshow may be nearing the end of its long-running legal dispute with Warner Bros. over the simultaneous release of “The Matrix Resurrections” in 2021. There’s a possibility that they could lose this arbitration.

Moore asserts that the arbitration process will naturally conclude, regardless of the Chapter 11 proceedings. He suggests that the latter is intended to expedite the resolution, allowing us to progress more swiftly. In his words, “If we owe Warner Brothers money, they’re likely to receive all they’re owed. Bankruptcy doesn’t exempt us from our debts.

Moore admitted that the issues at Village Roadshow were partly due to an overextended project portfolio and lofty aspirations, which were further aggravated by structural changes in the industry triggered by the pandemic and exacerbated by the SAG-AFTRA and WGA strikes. Consequently, the production company has temporarily halted all new projects. Moore made this statement while referencing upcoming productions like “Myst” and “Underworld”, which were planned prior to this pause. Notably, Moore, who previously worked as a banker at JP Morgan for 16 years, is now planning a move to Paris and intends to focus on EuropaCorp, a company acquired by Vine in 2020 and currently working on Luc Besson’s “Dracula: a Love Tale” featuring Caleb Landry Jones.

Why did you think Village Roadshow could evolve from being a financer into being a studio?

2017 marked the point where we intervened to prevent Village Roadshow from falling into bankruptcy. Vine took action, assuming their debts owed to Warner Brothers at the time. Our faith was in the bond we shared and the company’s rich history, as well as the treasure trove of content they had amassed. With our own IP under control, we saw potential in contributing to the industry as an independent studio by creating fresh content beyond the big studios, while still catering to them in a way that Europa Corp does. The goal was to harmonize various businesses – the partnership with Warner Bros., ownership of their library, and development of new projects from this content. This was our vision for 2017 and 2018, which I stand by as sound. Subsequently, we focused on recruiting top-tier management and constructing a remarkable television platform under Steve Mosko’s leadership. I have no regrets regarding these decisions. However, we cultivated this exceptional team just before the onset of COVID.

Is COVID the reason why Village Roadshow failed?

As a movie enthusiast, I can share that we navigated through a series of events, with the shifting business dynamics of the film industry being one of them, and COVID-19 serving as an accelerant. During those challenging times, we chose not to let go of our team or deviate from our original plan. Instead, we stood firm, maintaining our family of dedicated professionals. In hindsight, I admit that we underestimated the length and cost of these difficult circumstances.

Looking back with the clarity a rear-view mirror provides, some might argue that we made the wrong moves. However, in the heat of the moment, I stand by our decisions. We preserved a precious team throughout a trying period, endured hardships followed by industry strikes, and faced continuous challenges. It was, indeed, a long and arduous journey.

Did Warner Bros. encounter any issues before deciding to simultaneously release ‘The Matrix Resurrections’ on HBO Max and in theaters?

For nearly a quarter of a century, Village Roadshow and Warner Bros. have built a strong partnership with us. We were instrumental in co-financing “Joker,” a movie they later realized they didn’t necessarily need partners for, given its unprecedented success. However, at the time, they weren’t aware that it would become a billion-dollar film, and they were hesitant about the venture. That’s why partnerships are crucial – to lessen the risk if something doesn’t pan out. In this case, “Joker” had not one but two financial backers. It’s important to remember that many of today’s popular franchises wouldn’t exist without initial risk-sharing. For instance, “The Matrix” was rejected by two other major studios, but Warner Bros. agreed to produce it only because Village Roadshow covered half the production costs. This way, we shared the risk, which allowed the movie to see the light of day. In retrospect, it may seem obvious that they would have financed it alone, but in reality, they didn’t have the financial means at the time.

When did you realize that the relationship with Warner Brothers was unsalvageable?

I’m not entirely convinced it can’t be saved. As a born optimist and entrepreneur, I believe our company needs to navigate through its challenges to find solutions. Unfortunately, we ran out of time to do so gradually. The Chapter 11 process recognizes our current resource depletion, providing us with a structured approach to resolve our issues instead.

Is it being claimed that you chose to declare bankruptcy in order to halt the arbitration proceedings with Warner Bros.?

Those individuals are unaware of how systems function. Filing for bankruptcy doesn’t let you evade responsibilities; instead, it facilitates the settlement of obligations. The arbitration process will naturally reach its conclusion. In case we owe Warner Brothers money, they’ll most likely recover their full amount. Nothing can be avoided during bankruptcy. I’ve consistently pushed for fair resolutions and have attempted to negotiate. We’ve put forth suggestions, but haven’t received helpful responses because they believe that their best approach is through litigation. We hold differing views.

But you did sue them first!

The main issue at hand revolved around the unusual distribution method of Project Popcorn (Warner Bros.’ initiative releasing a year’s worth of movies on HBO Max). Traditionally, Warner Bros. has distributed films in a standard manner as per their distribution agreements, which spans over 25 years. This departure from the norm was the root cause of the conflict. By releasing a movie simultaneously (day-and-date) for streaming and theaters, they risked impacting box office revenues. However, Warner Bros. pursued this strategy to boost HBO Max subscriptions, a goal they openly acknowledged, as it was advantageous for their growing subscriber base.

In the professional world, there’s a lot of talk suggesting that Warner Bros. could emerge victorious from the arbitration. What makes you believe they have a strong chance of success?

I’m not going to explain my reasons. I firmly believe that it’s more appropriate for these disputes to be resolved through arbitration rather than in court. The idea is that it should be less complex and quicker, but this particular process has dragged on for nearly three years now, which contradicts the initial expectation of speed. However, I suspect that people tend to form opinions about arbitration based on its historical outcomes – such as how often talent or partners win compared to studios – rather than the specific merits of each case.

Didn’t you take legal action against Warner Bros. for creating spin-off films or sequels based on projects you funded, but without your involvement?

In essence, we’ve got a lawsuit ongoing, and we’re both co-owners of the copyright. At its core, we jointly own the property with them, but our ownership can’t be ignored. They hold the rights to create new things based on it, but they can’t exclude us from our rightful share. Essentially, they control the creative aspect, while we co-own the financial benefits. They demanded that we surrender our rights; otherwise, they wouldn’t move forward with any project linked to us. It was essentially a threatening tactic: “Either you give up your stake in this property, or we’ll simply leave it idle.

Did I understand correctly that out of the over 200 projects you were working on, only around a dozen actually got launched?

Previously, I noted that throughout the COVID-19 pandemic, we chose not to downsize our workforce. Instead, we kept our employees busy fostering innovation and intellectual property (IP). We also acquired new IP and had a vast number of projects in development. Looking back, perhaps this scope was too expansive or required more fine-tuning. However, it wasn’t until 2023 that we faced both COVID recovery and strikes.

There is a delay of over two years between the creation of content and its airing, resulting in payment. This time lag ultimately proved to be our downfall, as we ran out of time. An alternative scenario could have seen us expediting the production and broadcast of many of these projects, but unfortunately, the cumulative impact of the experience necessitated a restructuring process instead.

What were some of the most profitable projects?

Initially, we showcased simpler projects to demonstrate our capabilities, and each one proved successful, earning critical acclaim. These projects attracted a large audience. For instance, we worked on films for Tubi, which were among their most popular on the platform. Similarly, we contributed to NBC’s “College Bowl,” a project that was well-received by viewers. Our team was exceptional, and we looked forward to taking on more projects. However, the prolonged process in an industry where things often take time to get started became challenging.

Why are you now in Paris?

Previously, Village Roadshow was just one component of Vine’s diverse collection of assets. Now that the company is being managed by its independent board directors, I have redirected my attention towards EuropaCorp. The insights gained from navigating evolving business models in our previous ventures will be applied here to broaden its reach, foster Luc Besson’s creative pursuits, uphold our cinematic legacy, and propel EuropaCorp into the future.

Are you definitely backing out of Village Roadshow?

Instead of using the term “backing out,” I prefer to express it as “reallocating my focus.” As a fund manager, we’ve invested more than $1.5 billion over the years at Vine, which represents numerous investments and deals. When necessary, I recognize the importance of different leadership styles, and that’s why I’ve handed over the reins at Village Roadshow to individuals with distinct skills. Although I remain on the board and stay connected to its operations, my primary concern now is EuropaCorp. I aim to support Luc Besson, enhance his strengths, and expand the company’s capabilities, as I firmly believe that European and French cinema will spearhead global cinematic advancements. This is what excites me most.

Given the current bidding scenario, is it accurate that Content Partners have submitted a bid worth $365 million?

Yes it’s a stalking horse bid and that’s for the cash flows of the library.

Warner Bros. reportedly could emerge as the top bidder to buy the library?

That’s people speculating.

If you sell the library, what is left of Village Roadshow?

Village Roadshow is offering three distinct assets up for sale: a library containing revenue from pre-existing films, the right to partake in future endeavors related to our copyrights (known as derivative rights), and a collection of 200 independent projects developed by Village, excluding those created with Warner Brothers. These assets can be purchased individually or collectively.

And how much is it worth in total?

I don’t know. That’s for the market to decide.

There’s also an offer from Alcon Entertainment on the table?

They’ve shown public enthusiasm too. Our collaboration was on “Wonka,” a project that has proven to be quite successful for them. There’s a possibility they might consider deepening their connection with Warner Bros. Time will tell. Often, people’s words and actions can differ.

And when do you think that arbitration is going to end?

I’m unsure about the details. One factor contributing to the uncertainty is that the situation was stretched out over an extended period of time, which might have delayed our awareness until September or October. As I mentioned earlier, this wasn’t about avoiding the issue, but rather expediting its resolution so we could progress more swiftly.

There is also the dispute with the Writers Guild of America. Are writers going to get paid?

In this procedure, every debt owed is handled fairly as per the norm. I’ve consistently supported reasonable outcomes, but it isn’t my place to decide what constitutes a fair outcome. That’s for the court to decide.

Did you allegedly secure around $13 million in funding, with contributions from Falcon Investments and the Ontario Teachers’ Pension Plan, to keep Village Roadshow afloat during bankruptcy proceedings? Is this enabling you to progress with any ongoing projects?

The project is on hold as they go through this current phase. If there are parties eager to resume the project, they would likely continue from where it was last, assessing what aligns with their portfolios and what doesn’t. I can’t provide definite plans at the moment, but there’s speculation that we’ve created a great deal of Intellectual Property during our work on this project.

Which ones would you say are the most valuable?

Village Roadshow holds the rights to the video game “Myst” and is spearheading multiple projects based on

Will Village Roadshow disappear? Do you care if it does?

As a devoted cinephile, I certainly care about our cinematic endeavors, especially the studio we painstakingly built at Village. Yet, like I’ve mentioned before, change is inevitable in this industry, and sometimes it calls for a shift in focus. Regarding the name, it remains to be seen whether it will continue to be associated with our studio going forward, as it seems unlikely to be included in Vine’s future portfolio.

Given your background in banking at JP Morgan, have you ever second-guessed your decision to enter the film industry, considering the current state of affairs at Village Roadshow?

No. This is much more interesting. Working with Luc is much more exciting than being a banker.

Has it been a roller coaster ride?

It’s definitely a roller coaster. But the roller coaster teaches you things.

What did it teach you?

In this specific scenario, there’s no need for us to cater to everyone’s preferences. When we started Village, we ventured into various content areas like unscripted, scripted, reality TV, and film simultaneously due to the immense demand for content at the time. However, as our team expanded, we realized that trying to be all things to all people wasn’t sustainable. As EuropCorp grows, our goal isn’t to become everything for everyone. Instead, we aim to excel in what we do already and expand upon those strengths in a logical manner.

Gene Maddaus and Brent Lang contributed to this article.

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2025-03-21 20:47