Here is why the matrix is so important. The Matrix will produce...

Here is why the matrix is so important.

The Matrix will produce revenue for the joint venture for at least the next two years. First there is the initial cinema release, followed by video and dvd sales and rentals and finally the showing of the movie on pay-tv and free to air. Take a look at Newscorps lastest report their still banking sizeable cheques from Ice Age.

The Matrix 2 & 3 will provide the movie production joint venture with the ability to make their next few movies with out any real need for more money. Now I'm not saying the matrix is an immediate honey pot, village roadshow and warner bros could flush the money straight down the toilet, with more forgetable movies such as pluto nash and analyse that. If they choose to make more movies like Pluto Nash which cost $80million, the money wont last too long.

However they do have Troy and Ocean's 12, both of which I believe should do all right.

As for the write down. It was a non-cash accounting write down. In my opinion it does not necessarily need to be offset by anything. The Kirby's have merely taken the opportunity to announce a bit of bad news before the impending release of the matrix.

Prehaps they are selling some of their cinema assets because they believe that both producing movies and owning the assets that show the movies is a bit of a conflict.

As for Austereo, why would you sell an asset at 1.40 when there is talk that media ownership laws may change and there will be a bit of a fight over this prize asset. Also owning a radio station and a movie production house does provide the opportunity to cross promote.

Now to be a little pessimistic, the cancelation of the preference share dividend may indicate a very serious cashflow problem within the group. The sale of various cinema assets could also point to this being the case. The posting of the loss may be a way of giving themselves an excuse/ammunition for not paying the pref share div, if push comes to shove and they actually do end up in court over it.

The Kirby's in my opinion have sought of bet the company on the Matrix, if it flops they do not have much left.

I do not own village roadshow. I have traded the stock recently having sold out around the 1.50-1.60 mark.