New Line And Jackson - Irreconcilable Differences

Petersko writes to mention a CNN article about an escalation between Peter Jackson and New Line that likely means we'll never see a Jackson-helmed "Hobbit" film. From the article: "In an interview with the Sci Fi Channel news service Sci Fi Wire, [New Line co-chairman Bob] Shaye said Jackson will never make another movie for the studio and said the filmmaker just wants more money. 'I don't care about Peter Jackson anymore,' Shaye said. 'He wants to have another $100 million or $50 million, whatever he's suing us for. He doesn't want to sit down and talk about it. He thinks that we owe him something after we've paid him over a quarter of a billion dollars. ... Cheers, Peter.'"

Comments

well

[mastershake_phd]

He thinks that we owe him something after we've paid him over a quarter of a billion dollars. ...Z

With that kinda cash he can finance his own movies.

Re:Cheers indeed

[Pumpkin Tuna]

You don't. Most people think Jackson was pretty much spot on in his adaptation. If anything, a new director, handpicked by the studio clowns, will be much, much worse.

Who wants to bet we'll see "younger, edgier" hobbits and a "rockin'" soundtrack. Justin Timberlake is getting some good buzz for his new movie. I wonder what his version of "The Road Goes Ever On and On" would sound like . . .

hmm

[Phil246]

Dont newline cinema have a finite period of time in which they can do the hobbit before they lose the rights to it?

Re:hmm

[steve_bryan]

It's a shame that you have to be such a run away success in order to have enough money to sue for what you are due.

It was on a different scale financially and quite a while ago but I recall a similar incident with the actor James Garner as the aggrieved party concerning a great deal of shady accounting (a claim that "The Rockford Files" never made a profit). But he had been in so many successful TV series that he had enough money finally to get his much delayed day in court and prevail. The people who were being sued were always at great pains to explain that Garner was paid plenty for all the success he had achieved with the implication that he should accept being screwed out of the contractual obligations that he had negotiated.

When you think of all the times these producers put out huge sums of money for some incredibly lackluster work which leaves them scrambling to try to recover, you might think they would gladly forgo their usual shady accounting tricks for work that seems to be successful on every level. But they seem to be biologically incapable of that sort of self control. Being predatory is probably an important factor in how they got to be where they are and they probably have no ability to control it even in their own self interest.

Greedy, dishonest Hollywood executives. Nothing new here. They should do a TV show about them. Wait, they did, it was called Action! and it was hilarious. It is even available on DVD.

Re:I'd say...

[ivan256]

It's common for movie studios to come up with fees that they charge themselves to make the bottom line whatever they want it to be. If they owe somebody a percentage of the bottom line, they are very good at making that number be as low as possible. The thing is that when you charge yourself a fee, you still get all the money. It's a ridiculous scam, and it seems to me like people in Hollywood are either too worried about the glamour, or are busy suing each other over it.

I don't know the specifics of this dispute, but I'd bet money that it boils down to "my contract says I get x% of this pool of money, and you are lying about the size of that pool of money".

More to come

[martijnd]

Ok, the story as I understand it now, or at least as far as it is reported in the various press releases.

NewLine has limited time left to produce the Hobbit, before the movie rights return back to another company. Peter Jackson is suing New Line because their own audit of Fellowship of the Ring came up with figures that didn't match what NewLine paid to them. Their contract has regulations for this , and since NewLine refuses give more insight into their accounting, they are left with a courtcase.

NewLine then tried to get Peter Jackson to drop the lawsuit by telling him "drop the lawsuit, and you can make the hobbit". This was refused by PJ in a public letter, who stated that he wouldn't want to invest time and efford into a new project while the courtcase is still unresolved.

NewLine can now make a Hobbit without PJ, or do nothing and see the rights to a valuable movie franchise revert to its previous owners within the not too far future.

Meanwhile, MGM holds the distribution rights for the Hobbit, and has already said on record that they would want Peter Jackson to direct the film.

(and as for whom owns what, Google the details)

Re:More to come

[Anonymous Coward]

Your final "whom" was an example of hypercorrection. "Whom" is used as an object, and "who" as a subject. In the phrase "who owns what", "who" is the subject, and "what" is the object. You would use "whom" when saying "who owns whom".

Re:More to come

[scdeimos]

"Don't go see it, Peter Jackson didn't direct it." would be a common phrase if New Line did it. At least that's what I'd tell everyone that would listen.

I'm not sure I agree with that. Rings Geeks like us might hold that viewpoint, but the Average Joe who just goes to the movies to be entertained won't know or care who directs the movie (or movies, since it sounds like New Line has another movie planned to slot in between The Hobbit and LOTR).

Making gross (and I mean horrible) estimates, Rings Geeks might account for 10% of the movie-going audience. Even if every single one of them boycotts a non-PJ-made Hobbit, New Line would still do exceedingly well out of it.

Personally, I hope that everyone New Line approaches to direct The Hobbit tells them where to stick it, that the rights will revert to Tolkien Enterprises and MGM so that they get PJ to make it for them. Take that, New Line! :)

For anyone who's forgotten, it's not just Peter Jackson who questioned New Line's creative accounting over the Rings movies - In 2004 (I think) Tolkien Enterprises also sued New Line for over $20 million in unpaid royalties for Fellowship of The Ring.

Re:this guy's full of it

[russ1337]

Here is Peters e-mail (posted here http://www.theonering.net/staticnews/1163993546.ht ml):

I think it says it all.

Dear One Ringers,

As you know, there's been a lot of speculation about The Hobbit. We are often asked about when or if this film will ever be made. We have always responded that we would be very interested in making the film - if it were offered to us to make.

You may also be aware that Wingnut Films has bought a lawsuit against New Line, which resulted from an audit we undertook on part of the income of The Fellowship of the Ring. Our attitude with the lawsuit has always been that since it's largely based on differences of opinion about certain accounting practices, we would like an independent body - whether it be a judge, a jury, or a mediator, to look at the issues and make an unbiased ruling. We are happy to accept whatever that ruling is. In our minds, it's not much more complex than that and that's exactly why film contracts include right-to-audit clauses.

However, we have always said that we do not want to discuss The Hobbit with New Line until the lawsuit over New Line's accounting practices is resolved. This is simple common sense - you cannot be in a relationship with a film studio, making a complex, expensive movie and dealing with all the pressures and responsibilities that come with the job, while an unresolved lawsuit exists.

We have also said that we do not want to tie settlement of the lawsuit to making a film of The Hobbit. In other words, we would have to agree to make The Hobbit as a condition of New Line settling our lawsuit. In our minds this is not the right reason to make a film and if a film of The Hobbit went ahead on this basis, it would be doomed. Deciding to make a movie should come from the heart - it's not a matter of business convenience. When you agree to make a film, you're taking on a massive commitment and you need to be driven by an absolute passion to want to get the story on screen. It's that passion, and passion alone, that gives the movie its imagination and heart. To us it is not a cold-blooded business decision.

A couple of months ago there was a flurry of Hobbit news in the media. MGM, who own a portion of the film rights in The Hobbit, publicly stated they wanted to make the film with us. It was a little weird at the time because nobody from New Line had ever spoken to us about making a film of The Hobbit and the media had some fun with that. Within a week or two of those stories, our Manager Ken Kamins got a call from the co-president of New Line Cinema, Michael Lynne, who in essence told Ken that the way to settle the lawsuit was to get a commitment from us to make the Hobbit, because "that's how these things are done". Michael Lynne said we would stand to make much more money if we tied the lawsuit and the movie deal together and this may well be true, but it's still the worst reason in the world to agree to make a film.

Several years ago, Mark Ordesky told us that New Line have rights to make not just The Hobbit but a second "LOTR prequel", covering the events leading up to those depicted in LOTR. Since then, we've always assumed that we would be asked to make The Hobbit and possibly this second film, back to back, as we did the original movies. We assumed that our lawsuit with the studio would come to a natural conclusion and we would then be free to discuss our ideas with the studio, get excited and jump on board. We've assumed that we would possibly get started on development and design next year, whilst filming The Lovely Bones. We even had a meeting planned with MGM executives to talk through our schedule.

However last week, Mark Ordesky called Ken and told him that New Line would no longer be requiring our services on the Hobbit and the LOTR 'prequel'. This was a courtesy call to let us know that the studio was now actively looking to hire another filmmaker for both projects.

Ordes

Re:Its amazing

[Anonymous Coward]

Please don't take out your anger on one issue against another.

The difference between Peter Jackson and the Home Depot CEO is that Peter Jackson made New Line money. Billions of dollars.

Plus as others have pointed out, this is a matter of ensuring his contract is executed correctly. If New Line agreeded to give him a percentage cut, and they try change the books to make his cut smaller , he has every right to 'stick it to the man' trying to shaft him. And let's face it, it's not the first time a movie company has tried this.

Re:I'd say...

[Anonymous Coward]

From the NYT, 2005

Use or misuse of corporate synergy is at heart of Peter Jackson's lawsuit against New Line Cinema, which financed and distributed The Lord of the Rings, his film trilogy; suit charges that New Line committed fraud in handling revenues generated by 2001's The Fellowship of the Ring and in that way underpaid him by millions; faults New Line's use of pre-emptive bidding for subsidiary rights to such things as Lord of the Rings books, DVD's and merchandise, most of which went to other companies in New Line family or other units of Time Warner, New Line's parent; says that while Time Warner's bottom line was not hurt by these deals, overall gross revenues for film, on which Jackson's percentage is based, would have been greater if open bidding had been used; claim strikes at heart of modern vertically integrated media company, painting corporate synergy as 'self-dealing'; Stanton Stein, Jackson's lawyer, has specialized in vertical integration litigation in television and movie industries

and so on. Man, when did ./ become such a hotbed of communist propaganda. People want to make money. Lots and lots of money. Shock and horror.

Re:Its amazing

[Simon Garlick]

It's not Peter Jackson the person suing New Line to reveal whether or not it's cooked the books (and it certainly looks like it has), it's Wingnut Films. Peter Jackson founded the company and I'm sure he owns a big chunk of it, but it's a company nevertheless. A company with shareholders and employees, people who have bills and rent and mortgages.

It looks like the issue is something like this.

Wingnut does a deal with New Line, something like "You lend us X dollars, and we'll make three movies that make you a whole lot more than X. In return, when other companies distribute and license the movies, the characters, the music, and all that stuff, you give us a fair share -- let's call it Y% -- of the money that you make, because after all we made the movies and did all the hard work. Deal? Deal."

Time passes. The movies are huge. They are, in fact, the most profitable movies in history. Rather than just getting back "more than X", New Line is getting something around "more than thirteen times X". Seriously. For every dollar invested, New Line is getting thirteen back.

So, after the chaos of openings and Oscars and awards left and right has calmed down a bit, Wingnut's accountants notice that Y% is turning out to be a lot less money than they expected. So much less that getting Y% is starting to look like a bad deal, especially given that New Line is laughing all the way to the bank. So Wingnut has a preliminary audit done of the first movie's finances, and it turns out that New Line is actually GIVING AWAY THE MOVIES FOR FREE because the partners and licensees it has signed up all turn out to be, surprise surprise, NEW LINE SUBSIDIARIES. And guess what Y% of FREE is. (note: the subsidiaries didn't actually pay nothing, but it was so much less than market value, it's basically the same thing. Especially when Wingnut's deal was based on market value.)

So the accountants alert Wingnut's executives to the fact that Y% of something that is being given away for free isn't very much. Wingnut's executives then go "Holy shit, are you serious? OK, New Line, we've got to have proper audits down, including the second and third movies, to see what the story is".

New Line: "Um, no."
Wingnut: "Seriously guys, something's not right here, we have to go through the books."
New Line: "No."
Wingnut: "OK, well we'll have to get the lawyers involved, because this is starting to look really dodgy."
New Line to the media: "PETER JACKSON IS A GREEDY MOTHERFUCKER AND WE'RE NEVER WORKING WITH HIM AGAIN"
Peter Jackson: "WTF?"

I think it's so funny...

[localman]

He thinks that we owe him something after we've paid him over a quarter of a billion dollars

I like how the studio thinks the percentage that they agreed to pay him turned out to be "a lot" that they can reneg. And they keep throwing out this line about how much money he's made to kill people's sympathy for him. But, er, well, why should they get to keep the money? The fact is (at least from what I've read) is that they agreed to pay him on certain terms in the contract, and now they're whining because it was more successful than they expected. Which means they got more than they planned too. But the suits just don't like the idea of the grubby artist personally making so much.

Screw you NewLine. Go Peter.

And heck, I didn't even like the films that much.

Cheers :)

Re:Bob Shaye is a fool...

[dangitman]

Do you think if the result of an audit was that he was overpaid $50M, he'd happily and immediately return the money?

I think he would. I know quite a few people who have worked with him, and they all say he's a very honest, scrupulous person.

talk about spin

[lordsid]

This is total spin and should have never been posted on slashdot, my god.

Here is a link with a statement from the real owner of the Tolkien rights saying that Jackson will definitely do the Hobbit. The rights for the movies revert back to him sometime within the next year.

This Shaye guy can sit on it and spin himself, greedy fuck.

/feeling cynical tonight

Re:might be fair

[Tatarize]

His suit is based on unfair practices by Time Warner. The movies made a crapload and the secondary profits the merchandising rights, which Jackson gets a cut of, were sold off to other Time Warner companies for less than they could have gotten.

This is happens a lot with these giant places, they just sell the rights within the companies and don't make as much profit because they undersold it. This is the same crap that Fox pulled with X-Files having sold the syndication rights to FX for much less than they were worth. The studio bitching that Jackson got 250 million dollars on a trilogy which made like 20 billion is pathetic.

He should be allowed to see the records and prove his case. Just because the studio thinks 250 million dollars is *enough* doesn't make the studio able to ignore the contract.