Warner Bros. won a significant victory Friday in its legal battle with its longtime financing partner, Village Roadshow, as a judge agreed to send the dispute to arbitration.
Village Roadshow has teamed with the studio on numerous blockbusters over the last 25 years, including “Joker,” the “Ocean’s” series, and “American Sniper.” But the relationship foundered when Warner Bros. opted to release “The Matrix: Resurrections” simultaneously in theaters and on HBO Max, along with the rest of its 2021 slate.
Village Roadshow sued in February, alleging that Warner Bros. had sabotaged the film’s box office revenue in order to boost the streaming service. Village Roadshow has also alleged that Warner Bros. was moving forward with projects — including “Wonka,” a TV series based on “Edge of Tomorrow,” and a sequel to “I Am Legend” with Will Smith and Michael B. Jordan — without participation from Village Roadshow, in violation of their agreement. The company sought an injunction that would force Warner Bros. to abide by the agreement.
In his ruling on Friday, Judge David S. Cunningham held that the issues in the lawsuit are governed by the contract’s arbitration clause. He also denied Village Roadshow’s request for an injunction.
In a statement on Friday afternoon, Village Roadshow said it would continue to fight in arbitration and expected to win significant damages.
“This is a case important not only to Village Roadshow, but to all content owners abused by studios’ self dealing practices,” the company said. “The company will prove that it is entitled to all of its requested remedies, including significant damages, for WB’s willful and continuing breaches of the parties’ agreements.”
The statement also said that Village Roadshow looks forward to uncovering more information in discovery, and alleged that Warner Bros. has “worked hard in the press to obscure their bad behavior and influence their perception among industry stakeholders.”
Warner Bros. has denied that it has violated the agreements. In arguing that an injunction was not needed, the studio maintained that Village Roadshow faces no imminent threat of harm.
Village Roadshow’s attorneys have raised concerns that it has not been notified about Warner Bros. projects in development that are based on its co-financed films. Those include an “Ocean’s” sequel starring Margot Robbie and a Sherlock Holmes TV series for HBO Max, both of which have been reported by news outlets.
However, in a court filing, a Warner Bros. executive denied that there is a cast or a budget for the “Ocean’s” film. The studio said that it is working with producers to develop the “I Am Legend” sequel, but as yet there is no script, no budget, no director, no cast, and no greenlight — and therefore, no obligation to notify Village Roadshow. The studio also denied that it is actively developing other properties to such a point where Village Roadshow would need to be notified.
The studio has also said that it has no current plans to do more day-and-date releases in theaters and on HBO Max.