Welcome to the WC, wherein you’re trapped in my mind for eight to twelve minutes weekly. Probably closer to 20 today as you get sucked into some nostalgia.
Recently, the film industry has suffered two big losses: Village Roadshow filed for bankruptcy, and Val Kilmer passed away.
Before I indulge in YouTube clips celebrating Val Kilmer’s best works, we’ll dive into what went wrong with Village Roadshow and what it means for film investing.
What’s on the menu today:
- Who was Village Roadshow?
- What happened to the iconic filmmaker?
- What does it mean for the industry?
- How does it impact film investing?
- Val Kilmer’s greatest hits
- What does it all mean, anyway?
Nothing here is investment advice. Do your own research. Please.
Let’s go.
We’ve written a lot lately about how racehorse investing actually works — and why pinhooking can be a powerful real asset play with a short timeline.
Catch up here:
- The economics of racehorses
- WTF is pinhooking?
- Why pinhooking is more attractive than usual
Now, we’re opening a new deal based on that research — but it’s for accredited investors only.
We’ll be in touch soon.
Table of Contents
Who was Village Roadshow?
Big Disclaimer
Altea partnered with Launch Film Finance to release Film I, our film finance debt fund, in 2024. We’ll probably open a second tranche of this in May 2025.
While everything I’m saying here aims to be as unbiased as possible, we’ve got a horse in this race. Do your own research and always be aware of potential bias.
The Legacy Co-Financier
Village Roadshow Entertainment Group (VREG) stood as one of Hollywood’s premier co-financing partners for over two decades. Originally established as the US production arm of Australia’s Village Roadshow Group, the company built its reputation through a prolific 25-year partnership with Warner Bros. that yielded over 90 films.
This collaboration produced some of the most recognizable franchises in modern cinema: “The Matrix” trilogy, the “Ocean’s Eleven” series, “Joker,” “Mad Max: Fury Road,” “Sherlock Holmes,” and “The LEGO Movie,” among others.
Collectively, these films grossed approximately $19 billion at the global box office – a staggering testament to VREG’s eye for commercially viable projects.
What made Village Roadshow unique wasn’t just the impressive roster of hits but its longevity in a notoriously fickle business. While many co-financing entities came and went, Village Roadshow maintained its position as Warner Bros.’ most reliable financial partner through multiple studio regime changes and market fluctuations.
The Business Model
Village Roadshow operated on the traditional equity co-financing model that defined much of 2000s-era Hollywood: putting up roughly 50% of a film’s budget in exchange for 50% of its profits. This arrangement allowed studios to mitigate risk while giving Village Roadshow access to high-profile projects with established directors and stars.
The model relied heavily on theatrical distribution and the traditional “windowing” system – where films would progress from theaters to home video to television, creating multiple revenue streams over time. This approach worked splendidly in the pre-streaming era, generating reliable returns that kept investors satisfied.
Following a 2017 takeover by private equity firms Vine Alternative Investments and Falcon Strategic Partners, VREG attempted to pivot beyond its co-financing roots to become a more independent content producer. This strategic shift aimed to create original films and TV shows without major studio backing.
Aside: Is there anything PE touches that it doesn’t screw up?
By the time of its bankruptcy filing in April 2025, the company’s balance sheet told the story of this failed transition: assets between $100-500 million against liabilities between $500 million and $1 billion, creating an insurmountable gap that eventually forced the Chapter 11 filing.
What happened to the iconic filmmaker?
The Warner Bros. dispute
The beginning of the end for Village Roadshow can be traced to a bitter dispute with Warner Bros. over “The Matrix Resurrections” release strategy.
When Warner decided to release the film simultaneously on HBO Max and in theaters in December 2021 (part of its controversial day-and-date strategy during the pandemic), Village Roadshow filed suit in February 2022, claiming breach of contract.
This legal battle proved catastrophic on multiple fronts.
First, it racked up over $18 million in legal fees, most of which remained unpaid by the time of bankruptcy.
Second, and perhaps more devastating, it irreparably damaged the 25-year partnership that had been Village Roadshow’s lifeblood.
As court filings later revealed, the dispute “decimated” their relationship with Warner Bros., which had been the company’s “most lucrative nexus” of business. Once this partnership fractured, Village Roadshow lost access to the premium projects that had sustained it for decades.
Imagine destroying a company over this film.
The failed reinvention
Village Roadshow’s attempt to reinvent itself as an independent content producer was a terrible decision.
The strategy shift followed the 2017 private equity takeover and the arrival of CEO Steve Mosko in 2018 (who departed in January 2025 as the company’s troubles mounted).
This pivot represented a fundamental misunderstanding of Village Roadshow’s strengths – the company excelled as a co-financing partner with a major studio’s marketing muscle and distribution network behind it, not as a standalone content creator competing with much larger entities.
Despite developing six movies and seven TV shows since 2018, none achieved the commercial success needed to sustain the business.
Court documents bluntly described the company’s expansion into original productions as “entirely unprofitable.”
Without Warner Bros.’ pipeline of premium projects, Village Roadshow struggled to identify and develop commercially viable alternatives.
Its independent endeavors drained resources while failing to generate meaningful returns, creating a downward spiral of mounting debt and diminishing prospects.
The perfect storm
External factors didn’t help.
Covid
The COVID-19 pandemic devastated theatrical attendance, undermining the box office returns that had historically driven VREG’s profitability.
Labor problems
Moreover, the 2023 writers’ and actors’ strikes brought Hollywood production to a standstill, creating additional delays and financial pressures.
By December 2024, the Writers Guild of America had placed Village Roadshow on its strike blacklist over $1.4 million in unpaid fees, effectively barring the company from engaging writers for new projects.
Streaming
Industry-wide shifts toward streaming prioritized subscriber growth over traditional profit metrics, fundamentally altering the economics that had made the co-financing model viable.
As studios hoarded content for their platforms, outside financiers like Village Roadshow became increasingly marginalized.
As Village Roadshow’s Chief Restructuring Officer Keith Maib later stated in court documents, a “confluence of macro-economic factors” – including the pandemic, industry work stoppages, and studios’ embrace of streaming – “weighed heavily on the company’s balance sheet,” creating a perfect storm from which there was no escape.
What does it mean for the industry?
End of an era for co-financing
Village Roadshow’s collapse signals the likely end of the traditional studio co-financing partnership model that dominated Hollywood for decades.
This approach – where outside investors would fund portions of a studio’s slate in exchange for a share of profits – has been under pressure for years, but VREG’s bankruptcy may represent its final gasp.
Studios now prioritize fully owning content for their streaming platforms, seeing little benefit in sharing ownership of valuable intellectual property that can drive subscriber growth.
The short-term cash infusion once provided by co-financiers has become less attractive as parent companies focus on long-term streaming dominance.
Industry consolidation has further squeezed mid-tier players like Village Roadshow. As giants merged (Disney absorbing Fox, Warner Bros. joining with Discovery), the leverage of independent financiers diminished.
Companies in this middle ground found themselves increasingly vulnerable. Too small to compete with Netflix or Disney but too large to survive on tiny indie films.
Village Roadshow’s fate echoes similar struggles faced by other mid-sized players: STX Entertainment underwent a fire-sale and restructuring in 2022, Open Road Films went bankrupt in 2018, and even billionaire-backed Annapurna Pictures nearly collapsed in 2019 before restructuring over $200 million in debt.
The streaming disruption
Streaming fundamentally upended the traditional revenue waterfall that made co-financing viable.
Instead of the predictable progression from theatrical to home video to television licensing, films now often go directly to streaming platforms, eliminating the multiple revenue windows that co-financiers relied upon.
This shift created a fundamental conflict between box office profits (which benefit co-financiers) and subscriber growth (which benefits platform owners).
When Warner Bros. released “The Matrix Resurrections” simultaneously on HBO Max and in theaters, they prioritized adding subscribers over maximizing box office – a strategy that left Village Roadshow out in the cold.
Village Roadshow’s bankruptcy represents a stark example of how entertainment’s shift to streaming has upended once-vibrant businesses that relied on traditional distribution models.
The economics of streaming—with its emphasis on building subscriber bases rather than maximizing per-title profits—simply don’t accommodate the co-financing approach that has sustained companies like VREG.
The compression of release windows has further undermined the value proposition for outside financiers.
When a film moves quickly from theaters to streaming (or debuts on both simultaneously), the theatrical revenue that historically drove profitability becomes less significant, making co-financing arrangements less attractive to all parties.
The content partners acquisition
The most valuable remaining asset in Village Roadshow’s bankruptcy is its film library, which attracted a $365 million stalking-horse bid from Los Angeles investment firm Content Partners (through its affiliate CP Ventura LLC).
This library encompasses 108 films that generate around $50 million in annual revenue.
The $365 million deal sets a floor price while the company solicits potentially higher offers.
An auction is expected in May 2025, with Village Roadshow’s attorney stating that the company is “open to all bids.”
Executives from Alcon Entertainment have signaled interest, and even Warner Bros. might enter the fray to reclaim rights to franchises it shared with Village Roadshow.
The outcome of this auction will determine the fate of these valuable film assets and the extent to which creditors can expect to recover.
The secured lenders (holders of approximately $393 million in asset-backed notes and loans) stand first in line, while the more than 200 unsecured creditors – including law firms, creative talent, and various vendors – will likely receive pennies on the dollar, if anything.
Whatever the final sale price, the auction represents the end of Village Roadshow as a creative entity.
Its remaining value lies not in future productions but in the exploitation of past successes – a fitting metaphor for the broader changes sweeping through Hollywood.
How does it impact film investing?
Big Disclaimer (Again)
Altea partnered with Launch Film Finance to release Film I, our film finance debt fund, in 2024. We’ll probably open a second tranche of this in May 2025.
While everything I’m saying here aims to be as unbiased as possible, we’ve clearly got a horse in this race. Do your own research and always be aware of potential bias.
Risk recalibration
Village Roadshow’s collapse has triggered a widespread recalibration of risk in film finance circles. The bankruptcy highlighted how even a “once-prolific film financing company” can implode when market conditions and partnerships turn unfavorable.
Investors and lenders now demand higher risk premiums for film deals, recognizing that external factors – a studio’s strategic shift, a pandemic, labor disputes – can rapidly erode value.
The scrutiny applied to potential partners has intensified, with particular attention paid to a studio’s history of honoring deals and its current financial stability.
Distribution strategies now face unprecedented scrutiny from financiers. The VREG case revealed the vulnerability of investments when a studio unilaterally changes distribution plans (as Warner did with its HBO Max strategy).
New deals increasingly include contractual protections that compensate investors if a planned theatrical release shifts to streaming or is otherwise altered.
Perhaps most significantly, the industry is witnessing a pronounced shift from equity-based to debt-oriented financing structures.
The traditional model – taking an equity stake in a film’s uncertain profits – is giving way to secured lending arrangements with fixed returns and strong legal protections.
The rise of secured positions
Film financiers are increasingly prioritizing senior secured positions over speculative profit participation. This approach ensures that investors have first claim on specific assets or revenue streams, rather than waiting for profits that may never materialize.
The importance of collateral has never been greater. Lenders now insist on security interests in intellectual property rights, distribution contracts, tax credits, and other tangible assets.
Village Roadshow’s secured creditors entered bankruptcy with first-priority liens on the film library, which is why they’ll recover significantly more than equity holders, who will likely be wiped out entirely.
These terms increasingly include senior security interests, step-in rights if a project falters, and clearly defined recourse options. The goal is to ensure that there’s a path to recovering capital even in a worst-case scenario.
The contrast between VREG’s equity co-financing model and a debt-oriented approach couldn’t be starker. If a film underperforms or a partner changes course, an equity investor can lose everything, whereas a debt investor is contractually owed their principal plus interest regardless of the creative outcome.
The bridge financing opportunity
Short-term bridge loans have emerged as a particularly attractive alternative to long-term equity investments.
These loans – typically extending 8-16 weeks – fund specific production phases and are repaid when longer-term financing or receivables arrive.
The appeal of bridge financing lies in its limited exposure period and multiple recourse options. A bridge lender typically holds a first-position lien on a film’s underlying rights and can trigger a completion bond if production falters.
This combination of senior position and short duration significantly reduces risk compared to traditional equity investments.
Rather than betting on box office success, bridge financiers focus on cash flow certainty – lending against secured contracts, tax incentives, or guaranteed payments highly likely to materialize regardless of a film’s ultimate performance. This shift from speculative to secured returns represents a fundamental change in how private capital approaches film.
The potential returns remain compelling, with bridge funds reporting IRRs of 20-40% from portfolios of short-term loans. While lower than the unlimited upside of a blockbuster hit, these returns are handsome on a risk-adjusted basis, especially given the senior-secured nature of the underlying investments.
New investment pathways
As traditional co-financing recedes, alternative investment pathways are emerging for private capital seeking exposure to the entertainment industry.
Library acquisitions and securitization
Rather than financing new productions with uncertain outcomes, investors can purchase existing film libraries (as Content Partners is doing with VREG’s assets) and securitize the predictable ongoing royalty streams. This approach has been popular in the music industry and is now gaining traction in film and television.
Niche genre financing
Categories like horror, thriller, faith-based films, and romantic comedies often deliver predictable returns relative to cost. Companies like Blumhouse Productions have demonstrated the viability of consistently profitable low-budget genre films, attracting specialized funds that finance slates of such projects.
International and local-language production
presents growing opportunities as streamers invest heavily in non-English content.
Local producers often need financing partners to meet this demand, creating openings for bridge funds and private investors in less capital-saturated markets.
Tax credit financing
provides perhaps the lowest-risk entry point to film investment.
Many jurisdictions offer substantial rebates (20-40% of qualified spend) to attract production. Financing the gap until those government-backed rebates are received represents a relatively secure play with modest but reliable returns.
The future of film investing doesn’t lie in chasing the next superhero blockbuster but in identifying segments with stable demand, clear exit strategies, and contractually protected returns.
Smart capital flows to these corners of the industry even as traditional co-financing models collapse.
Want to dive into the fall of the Old Masters? Figure out how to profit from that bowl of fruit painting your auntie left you.
Val Kilmer’s greatest hits
OK, let’s pay tribute to the late great Val Kilmer.
Top Gun (1986)
“Top Gun” established Kilmer as a charismatic leading man and helped launch him to stardom. His chemistry with Cruise created the perfect antagonistic dynamic that drove much of the film’s dramatic tension. Decades later, despite his battle with throat cancer, Kilmer made a poignant appearance in 2022’s “Top Gun: Maverick,” bringing his character full circle in one of cinema’s most touching legacy sequels.
Heat (1995)
The film’s legendary downtown Los Angeles shootout sequence showcased Kilmer’s extraordinary preparation for the role. Having trained extensively with weapons experts, he executed a tactical reload during the firefight that was so impressive it has been shown to military personnel as an example of proper technique.
Batman Forever (1995)
This film was awful but made a ton of money. That’s all.
Tombstone (1993)
Kilmer’s portrayal of consumptive gunslinger Doc Holliday in “Tombstone” stands as perhaps his most beloved performance. Playing the tuberculosis-stricken dentist-turned-gambler and loyal friend to Kurt Russell’s Wyatt Earp, Kilmer stole every scene with a combination of charm, gallows humor, and physical frailty.
Real Genius (1985)
A ridiculous film that shaped most of my university career.
The Saint (1997)
In “The Saint,” Kilmer played Simon Templar, a master thief and master of disguise who assumes various identities to accomplish his heists. The part required Kilmer to play multiple characters, each with distinct accents, mannerisms, and personalities—a showcase for his remarkable versatility as an actor.
Released during the Bond franchise’s nadir, the film’s commercial success ($118 million worldwide) solidified Kilmer’s status as a leading man capable of carrying a major studio release.
Plus, cold fusion.
What does it all mean, anyway?
The simultaneous loss of Village Roadshow and Val Kilmer represents the passing of two distinct eras in Hollywood history.
Village Roadshow embodied a financing model that thrived in the pre-streaming age – a model that proved unsustainable as the industry transformed around it. Like many traditional institutions caught in disruptive change, it couldn’t adapt quickly enough to survive.
By contrast, Kilmer navigated Hollywood’s shifting tides for decades, reinventing himself across genres and production scales. From blockbusters to indie darlings, from heartthrob to character actor, he demonstrated a versatility that Village Roadshow lacked.
Even as health challenges limited his opportunities in later years, his legacy remained secure through performances that continue to resonate with audiences.
As the film industry moves forward, the lessons of Village Roadshow’s collapse will shape how money flows into production. The emphasis on secured positions, shorter-term investments, and contractual protections reflects a more cautious approach to an increasingly volatile business.
The traditional co-financing model that sustained companies like VREG for decades may be gone, but new financing structures are emerging to fill the void.
Meanwhile, Val Kilmer’s filmography reminds us why we invest in movies at all – for those transcendent moments when an actor’s performance captures something ineffably human, moments that retain their power long after business models change and companies come and go.
In an industry increasingly dominated by franchises and algorithms, Kilmer’s singular talent reminds us of cinema’s unique capacity for magic.
Nothing here is investment advice. Do your own research. Please.
That’s all for this week; I hope you enjoyed it.
Cheers,
Wyatt
Disclosures
- While everything I’m saying here aims to be as unbiased as possible, we’ve clearly got a horse in this race. Do your own research and always be aware of potential bias.
