Tolkien Estate Sues New Line Cinema

[Michelle Sandberg]

Tolkien Estate Sues New Line Cinema

Monday February 11 5:47 PM ET


The estate of "Lord of the Rings" creator J.R.R. Tolkien is suing the film studio that released the trilogy based on his books, claiming the company hasn't paid it a penny from the estimated $6 billion the films have grossed worldwide.

The suit, filed Monday, claims New Line was required to pay 7.5 percent of gross receipts to Tolkien's estate and other plaintiffs, who contend they only received an upfront payment of $62,500 for the three movies before production began.

The writer's estate, a British charity dubbed The Tolkien Trust, and original "Lord of the Rings" publisher HarperCollins filed the lawsuit against New Line Cinema in Los Angeles Superior Court. If successful, it could block the long-awaited prequel to the films.

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Robert Pini, a spokesman for Time Warner Inc.'s New Line, declined to comment.

The films 2001's "The Lord of the Rings: The Fellowship of the Ring," 2002's "The Lord of the Rings: The Two Towers" and 2003's "The Lord of the Rings: The Return of the King" have reaped nearly $6 billion combined worldwide, according to the complaint.

The estimate includes everything from box office receipts to revenue from sales of DVDs and other products.

The plaintiffs seek more than $150 million in compensatory damages, unspecified punitive damages and a court order giving the Tolkien estate the right to terminate any rights New Line may have to make films based on other works by the author, including "The Hobbit"

Such an order would scuttle plans by New Line to make a two-film prequel based on "The Hobbit." "Rings" trilogy director Peter Jackson has already signed on to serve as executive producer on the project, which is tentatively slated to begin production next year, with releases planned for 2010 and 2011.

"The Tolkien trustees do not file lawsuits lightly, and have tried unsuccessfully to resolve their claims out of court," Steven Maier, an attorney for the Tolkien estate based in Britain, said in a statement. "New Line has not paid the plaintiffs even one penny of its contractual share of gross receipts despite the billions of dollars of gross revenue generated by these wildly successful motion pictures."

Maier also claims the film studio has blocked the Tolkien estate and the other plaintiffs from auditing the receipts of the last two films.

The lawsuit claims J.R.R. Tolkien established a trust through which he signed a film deal in 1969 with United Artists. After Tolkien's death, his heirs created the charity in the author's name.

Meanwhile, the original agreement terms were picked up by Hollywood producer Saul Zaentz, who produced an animated film in 1978 based on the "Rings" books, and eventually licensed the rights to make live-action films to New Line.

Lawyers for the plaintiffs said they have spent the years since the movies hit theaters trying to negotiate a settlement with New Line.

Other disputes over the film's earnings have surfaced in recent years.

In 2004, Zaentz sued New Line, claiming the studio cheated him out of $20 million in royalties from the film trilogy, which he optioned to New Line for a percentage of the movies' profits.

He and the film studio reached an out-of-court settlement a year later.

Jackson's production company also tangled with New Line in 2005 over profits from the films. A lawsuit was settled last year.

[Michelle Sandberg]

Such an order would scuttle plans by New Line to make a two-film prequel based on "The Hobbit." "Rings" trilogy director Peter Jackson has already signed on to serve as executive producer on the project, which is tentatively slated to begin production next year, with releases planned for 2010 and 2011.

This is going to suck if this order is enforced!  It will kill plans for the new Hobbitt movie and the prequel. Hope it sill happens!   

[One Ring to Rule Them All]

End of the Line for New Line?
February 11th, 2008 by xoanon

From IMDB: Time Warner executives are considering folding New Line into its Warner Bros. division or keeping the brand as a separate production unit with Warner Bros. handling its distribution, the Wall Street Journal reported today (Monday), citing people familiar with the situation. The newspaper said that in either scenario, New Line would be reduced to producing low-budget films as it once did instead of blockbusters like its recent Lord of the Rings trilogy. The Journal did not indicate what would become of The Hobbit, the Lord of the Rings prequel, which New Line is scheduled to produce this year.

http://www.theonering.net/torwp/category/hobbit/hobbit-movie/

[One Ring to Rule Them All]

First they screw over Peter Jackson and terminate their agreement for him to direct the remaining film, then they kiss and make up and it's back to business as usual for New Line. This is the ongoing saga of Hollywood. The distributors hide profits behind loser movies, swear in court they had a bad year, and strongarm the artists/rights-holders into renegotiating for a smaller share. No other business could get away with it.

[One Ring to Rule Them All]

On February 7, I posted an entry on the announcement by Jeff Bewkes, the new CEO of Time Warner, that he has targeted New Line Cinema for cost-cutting. There was speculation in the industry that downsizing measures might extend as far as folding the studio into TW’s main filmmaking company, Warner Bros. Today the Wall Street Journal has published “Time Warner’s New Line Cinema May Be Hung Out to Dry,” by Merissa Marr and Peter Sanders, offering an excellent analysis of the situation. Obviously whatever happens to New Line will have some effect on the Hobbit project.

I’d recommend reading the whole article, but here are some points that I found informative.

Bewkes has several options, including: sell New Line, let Warners absorb it, or continue to operate it as a separate, but smaller studio. According to the article, it’s highly unlikely that TW would sell New Line, and that isn’t an option being actively explored. A large part of a film studio’s value rests in its library of past titles, which can continue to be exploited in various ways. With the Rings trilogy, the Austin Powers films, the Nightmare on Elm Street series, and so on in its vaults, New Line is worth too much to dispose of.

As to merging New Line into Warners, New Line’s co-presidents, Bob Shaye and Michael Lynne, “continue to resist a combination, according to people familiar with the situation. The contracts of the two men, who don’t have an ownership stake in New Line anymore, are up at the end of the year.” Despite their resistance, the option of merger remains a live one.

Why can’t things remain as they are? Marr and Sanders suggest that New Line is in some ways becoming a victim of its own success. It was originally a small independent firm. Then Turner Broadcasting System bought it in 1993, and when TBS was acquired in 1996 by TW, New Line went along.

Based on the Austin Powers and particularly the Rings films, New Line grew considerably, until it was nearly a major studio. Marr and Sanders quote Larry Haverty, co-manager of Gabelli Global Multimedia Trust fund, an owner of TW shares: “New Line is looking a lot like Warner Bros. 2 right now and Time Warner doesn’t need two Warner Bros.”

If New Line had continued its successful streak into the post-Rings era, TW might have let well enough alone. But that hasn’t happened. The Golden Compass was planned as the next big fantasy trilogy, but the $180 million film, now in second run, is still struggling toward $70 million in the domestic market. The notable successes, Elf (2003), The Notebook (2004), Wedding Crashers (2005), and Hairspray (2007) have been coming too far between to balance the disappointments. (In 2006 the studio’s top grosser was Final Destination 3, at just under $55 million.)

Marr and Sanders point out that Warner Bros. has been having its own set of problems, and a mutual reorganization that leaves New Line as a separate entity could benefit both companies. They cite the example of Warners’ niche wing, Warner Independent Pictures, which “has been having an identity crisis of its own.” Warner has, according to the authors, been considering folding it into Picturehouse—New Line’s specialty division, which did well in 2006 with Pan’s Labyrinth.

The authors point out that there would be disadvantages to combining the two companies: “Folding New Line into Warner Bros. would add to an already heavy slate of films that have strained the studio’s resources. While the company’s big-budget ‘tentpole’ films often do well, smaller movies sometimes get lost in the shuffle, a problem that could be exacerbated with more New Line movies to release.” One scenario currently under consideration is keeping New Line separate and “having Warner Bros. handle certain areas such as home video and international distribution.”

If New Line does remain separate, it will probably face a mandate to return to its pre-Rings strategy of concentrating on lower-budget movies.

The authors conclude: “Still, the studio has several titles on the way that hold promise, most prominently the ‘Rings’ prequel ‘The Hobbit.’ New Line’s slate this year also includes ‘Sex and the City,’ [May 30] which Warner Bros. originally passed on, and ‘He’s Just Not That Into You’ [August 1].”

The WSJ article was posted before the news broke that the Tolkien Trust is suing New Line over its lack of payments for the Rings film. What effect that lawsuit will have on Bewkes’s decisions concerning New Line is obviously impossible to guess at this point, but a complicated situation has just become a tangled one.

http://www.kristinthompson.net/blog/?p=190

[One Ring to Rule Them All]

Time Warner's New Line Cinema
May Be Hung Out to Dry
By MERISSA MARR and PETER SANDERS
February 11, 2008; Page B1

New Line Cinema, the studio behind the "Lord of the Rings" trilogy, has spent the best part of a decade fiercely protecting its turf within Time Warner Inc. Now, barely a month into his new job, Time Warner Chief Executive Jeff Bewkes is looking to dismantle one of the company's longest-standing fiefdoms.

Moving swiftly to streamline Time Warner's movie business, Mr. Bewkes has flagged New Line as an immediate target for cost-cutting, forcing the studio to confront the scenario it has always fought against: being folded into Time Warner's main movie division, Warner Bros. Entertainment.

Taking away New Line's autonomy raises questions about the future of Co-Chairmen Robert Shaye and Michael Lynne, two Hollywood veterans who have long been the core of the studio. After hitting the jackpot with the "Rings" movies, the duo has been on a lengthy cold streak, and their attempt last year to launch a new franchise with "The Golden Compass" fell flat.

 
Both Mr. Shaye, 68 years old, and his one-time attorney Mr. Lynne, 66, continue to resist a combination, according to people familiar with the situation. The contracts of the two men, who don't have an ownership stake in New Line anymore, are up at the end of the year.

Messrs. Shaye and Lynne declined to comment, as did Mr. Bewkes.

Messrs. Shaye and Lynne face the same problem experienced recently by two other movie mavericks, Harvey and Bob Weinstein. The Weinsteins built their independent film company, Miramax, into a powerhouse, and sold it to Walt Disney Co., but ultimately they left the company after clashes with their corporate parent. Messrs. Shaye and Lynne also built a successful independent studio, sold it to a mainstream media company and are now struggling with the fact they no longer own their creation.

A problem in both cases was that what once was a small company eventually grew to look more like a major studio, with all of the big costs and risks that go with that. "New Line is looking a lot like Warner Bros. 2 right now and Time Warner doesn't need two Warner Bros.," says Larry Haverty, co-manager of Gabelli Global Multimedia Trust fund, which owns Time Warner shares.

The New Line question headlines an array of issues under the microscope at Time Warner's film business. Warner Bros. has already been rethinking the movie labels under its command and has been considering folding its Warner Independent Pictures specialty label into Picturehouse, which was created in 2005 after Time Warner acquired Newmarket Films, the distribution company behind "The Passion of the Christ." Warner Independent Pictures has been having an identity crisis of its own and has been largely missing from the Oscar picture recently.

 
Michael Lynne, at left, and Robert Shaye, head New Line Cinema.
Folding New Line into Warner Bros. would add to an already heavy slate of films that have strained the studio's resources. While the company's big-budget "tentpole" films often do well, smaller movies sometimes get lost in the shuffle, a problem that could be exacerbated with more New Line movies to release.

Last year was a prime example. "Harry Potter and the Order of the Phoenix," the fifth movie in the blockbuster series, hauled in just shy of $1 billion at the box office world-wide. Its other big hit, "I Am Legend," was a $557 million gusher. But less-mainstream movies such as "No Reservations" and "The Invasion" disappeared between the cracks. Warner Bros. responded in part by shuffling its ranks at the start of this year, firing its domestic marketing head, among other moves.

People familiar with the New Line situation say Time Warner is considering two options: folding the studio into the Warner Bros. division or keeping it separate and having Warner Bros. handle certain areas such as home video and international distribution. In both scenarios, New Line would be considerably scaled back and given a mandate to go back to its roots of primarily making lower-budget movies.

Selling New Line isn't an option currently being explored. The library, which in addition to the "Rings" trilogy includes the "Austin Powers" movies, the "Nightmare on Elm Street" series and the "Rush Hour" movies, is too valuable for Time Warner to give up, people familiar with the situation say.

What Mr. Bewkes does with New Line will be a crucial test of his ability to drive change throughout Time Warner. The new chief executive is under pressure to take a more radical approach to managing the media conglomerate in an effort to revive its stock price, which sunk this year to levels not seen since 2003. Mr. Bewkes highlighted his review of New Line in his first address to Time Warner investors last week.

Time Warner's journey with New Line started in 1996, when it assumed ownership of the studio as part of its acquisition of Ted Turner's Turner Broadcasting System. Mr. Turner had bought New Line three years earlier to provide programming for his suite of cable networks.

Mr. Shaye, who founded New Line in his Greenwich Village apartment in 1967, emphatically argued that the company should be a separate division from Warner Bros. because it had a unique culture and starkly different business model that focused on against-the-grain movies. He had the enthusiastic backing of Mr. Turner, who held considerable sway at Time Warner at the time.

In Time Warner's corporate structure, New Line sat alongside Warner Bros. as a separate division, with Mr. Shaye reporting directly to Mr. Turner, who was Time Warner's vice chairman. But in the same way that Miramax was lured to bigger-budget, more-mainstream movies over time, New Line had started to make the same kind of movies as Warner Bros. In 1997, Time Warner explored selling New Line but Mr. Turner resisted, according to people familiar with the situation.

Then came the "Lord of the Rings" trilogy, the blockbuster films that hauled in about $2.8 billion at the box office world-wide, a success that afforded New Line a newfound power within Time Warner. But post-"Rings," New Line stumbled with a string of flops, including "The Last Mimzy," which Mr. Shaye himself directed. After losing his main cheerleader on the Time Warner board, Mr. Turner, in 2006, Mr. Shaye scrambled to plot a new course for New Line in a fast-changing marketplace.

Last year saw the attempt to launch another trilogy, "The Golden Compass," which cost more than $180 million to make but sold just $70 million of tickets in North America. It has brought in almost $260 million internationally, but New Line had sold off most of the foreign rights. It's unclear whether New Line will proceed with a sequel.

Still, the studio has several titles on the way that hold promise, most prominently the "Rings" prequel "The Hobbit." New Line's slate this year also includes "Sex and the City," which Warner Bros. originally passed on, and "He's Just Not That Into You."

Write to Merissa Marr at merissa.marr@wsj.com and Peter Sanders at peter.sanders@wsj.com


http://online.wsj.com/article/SB120269302876657799.html?mod=googlenews_wsj

[Horus]

Wellll...just in case there is a cataclysm when the Mayan Calendar ends at the end of 2012 they had better get this **** sorted out fast so we can see the Hobbit movie at least! 

[One Ring to Rule Them All]

It sounds like the first movie is now going to get a 2011 release so we may get to sneek them in just before the 2012 apocalypse!  They usually release them for the Christmas season, right around December the 22nd, and since the cataclysm is supposed to be on the 21st of 2012, they might have to move the last one up a few days.

[Michelle Sandberg]

Still no more new news on the Hobbitt, but it is said to be a go, with filiming to begin next year!  More details as they become available.