The Lawsuit of the Rings

securitas writes "The New York Times' Ross Johnson reports that Lord of the Rings trilogy director, Peter Jackson, is suing New Line Cinemas for underpaying him by as much as $100 millon. The lawsuit filed Feb. 28 alleges that New Line committed fraud. Jackson 'reportedly receives about 20 percent of the gross revenue realized by New Line for the trilogy, minus expenses such as taxes.' Jackson's lawyer confirmed that of the more than $4 billion that New Line collected from revenues, merchandise and licensing, Jackson has received 'almost $200 million to date from New Line for the trilogy.' If the opening line doesn't make you want to read the article, I don't know what will: 'What if Frodo Baggins, instead of confronting the evil empire in "The Lord of the Rings," just got himself a lawyer and sued?'"

Comments

Forest Gump

[rlp]

At least he was smart enough to get a percentage of the gross. The author of Forest Gump was promised a percentage of the profit. The studio claimed that there was no profit. Some of the most creative people in Hollywood are the accountants.

Re:Forest Gump

[Loco3KGT]

Stan Lee is also a victim of that on all of the Marvel movies out so far. He signed for a percentage of the profits and not revenues.

Re:Forest Gump

[MattW]

From TFA:

According to Peter Hoffman, a tax lawyer for leading Hollywood producers in the 1980's and a former chief executive of Carolco Pictures, all the legal saber rattling around claims of self-dealing and pre-emptive bidding could be avoided if studios turned the clock back and compensated stars based on net profits, not gross revenues.

"Once upon a time, Hollywood studios paid a lot of money to net profit participants, and it was a fair deal," said Mr. Hoffman, who is known in Hollywood for his knowledge of arcane deal making. "Then the studios got greedy and stopped paying, and now we have gross players who used to be net players fighting over vertical integration. The studios brought this problem on themselves."

In other words, Hollywood basically caused people to stop taking net deals specifically because of what you just noted. I think it would be pretty difficult to hide all the profits from a bonanza like Lord of the Rings, of course, since only a scant few ever imagined the success it enjoyed.

He'll still make it...even for NewLine

[sgant]

Lawsuits in Hollywood are hardly personal. PJ may be taking it personally, but the corperate zombies at a Hollywood studio only look at making more money.

This lawsuit will get taken care of then it will pave the way for The Hobbit if NewLine thinks they can make even more money. Money money money. It may even get resolved by promising PJ that he can produce/direct The Hobbit and take an even bigger stake in the profits...or something.

It's all red tape and shady book-keeping anyway. Arthur Anderson and the accounting they did for Enron were amatuers compared to Hollywood accountants.

Re:He'll still make it...even for NewLine

[Anonymous Coward]

I recall a news story about the movie "Forrest Gump" wherein the accountants fiddled with the numbers so that it showed a loss (and if you recall, that movie did very well at the box office). The reason this was done, some allege, was to prevent the limited partners from realizing a profit. In most movie deals, there is one general and a number of limited partners. Since the studio was the general partner, only they made money. The rest of the investors were screwed.

Many are run this way

[tacokill]

It doesn't take creative accounting to make zero profit. MANY MANY small businesses are run like this so as to minimize the tax impact.

My point is that it's not just Hollywood. It is a preferred method for many people all across America.

Now, having said that, negotiating for a cut of the net profit is just a bad idea. For anything. By doing so, you give the payor the opportunity to let his costs get out of control without any negative consequences.

Re:From TFA...

[rogueuk]

Here's a nice article from Slate that discusses how the NY Times has violated it's code on confidential news sources.

Basically, if you are going to use an anonymous source to just do a cheap-shot on someone, the NY Times is not supposed to provide anonymity.

Slap NY Times on the hand

[null etc.]

And here's Slate's take on how NY Times violated it's own ethics standards by quoting a defaming lawyer anonymously:

http://slate.msn.com/id/2121636

Could lead to more competition

[m50d]

AIUI the essence of his suit is that the company gave merchandising etc. deals to members of the same conglomerate when they could have made more money on the film by opening them up for competition. If he wins we should see more contracts being opened up for everyone to bid on, and possibly more separation of the big media conglomerates.

Re:Sauron called...

[a1cypher]

In response to your sig, you should of wrote it like this:

wrong "should of"
right "should have"
abbreviated right "should've"

Re:$200m!!

[jdgeorge]

The article seems to be saying that New Line sold off merchandising rights to companies within the Time Warner family rather than sell to the highest bidder.

The suit contends that NL made more money, and therefore PJ would have recieved a higher cut, if the merchandising rights were sold on the open market.


Not exactly. According to this article at Slate, the issue is that the "pre-emptive bidding" process used to sell the rights within Time Warner allowed New Line to suppress the total amount of money they made on the films. It appears that Peter Jackson contends that they shortchanged him and were able to hide it by using this method of selling the rights.

Re:slashdot double standards

[east coast]

Slashdot has some serious double standards.

Actually, it's not as much a double standard as it is some misconception on your part. We (as slashdot users) are not the borg. Please do not lump me in with the majority of users. That's not even to be trollish, I'm just sick of stereotypical geek values being assumed to be mine by the public.

most of you guys have no problem at all taking from the rich and justifying it because they're rich

That's pretty much a universal way of thinking and certainly is not limited to /.

NYT broke its own rules quoting the lawyer

[toby]

Slate.com rightly points out that the NYT broke its own code of conduct in quoting a partisan source (case lawyer) and allowing them to freely slander Jackson:

In any situation when we cite anonymous sources, at least some readers may suspect that the newspaper is being used to convey tainted information or special pleading. If the impetus for anonymity has originated with the source, further reporting is essential to satisfy the reporter and the reader that the paper has sought the whole story. ...

We do not grant anonymity to people who use it as cover for a personal or partisan attack. If pejorative opinions are worth reporting and cannot be specifically attributed, they may be paraphrased or described after thorough discussion between writer and editor. The vivid language of direct quotation confers an unfair advantage on a speaker or writer who hides behind the newspaper, and turns of phrase are valueless to a reader who cannot assess the source.

Apart from that, isn't it too precious to hear a lawyer complaining about "piggishness".

Amazing Hypocrisy

[localman]

From the article:"Peter Jackson is an incredible filmmaker who did the impossible on 'Lord of the Rings,' " this lawyer said. "But there's a certain piggishness involved here. New Line already gave him enough money to rebuild Baghdad, but it's still not enough for him."

Wow, that statement demonstrates astonishing hypocrisy. He's essentially arguing that as long as someone gets a lot of money, they aren't owed anything more, regardless of contract. As if the contract really said "20%, or as much as we feel is enough".

Well, I am happy to apply this logic across the board. Newline got enough money in my opinion. So I feel it's a bit piggish for them to suggest anyone in the whole world should fork over more money to watch any of the films they've released.

You heard it straight from the Newline lawyer: ignore the law and download at wi
ll.

Cheers.