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Tolkien Trust Sues New Line, May Kill "Hobbit"

oboreruhito writes "The AP is reporting that the Tolkien Trust and HarperCollins are suing New Line Cinema for $150 million in compensatory damages, unspecified punitive damages, and a court order revoking New Line's rights to produce any more films on Tolkien properties. The Tolkien Trust says that New Line paid them only $62,500 to make 'The Lord of the Rings' trilogy of films — instead of the agreed-upon 7.5 percent of gross receipts of all film-related revenue. The suit may set back, if not kill, a film adaptation of Lord of the Rings prequel 'The Hobbit,' which Peter Jackson had recently signed up to make after his own legal row with the studio over payment for the sequels."

36 of 450 comments (clear)

  1. When will they learn... by Lumpy · · Score: 5, Insightful

    Studios are scumbags. They do "creative" accounting so that no film ever makes money on paper. If you get suckered into accepting net points you will never EVER see a dime. Gross points are the real money and even then they find ways of hiding that money.

    This is why you see lots of big actors and big name directors and talent working on more and more "indie" films. they actually get what they are promised from the indie companies.

    --
    Do not look at laser with remaining good eye.
    1. Re:When will they learn... by jmv · · Score: 5, Interesting

      The term you're looking for is Hollywood accounting.

    2. Re:When will they learn... by CRCulver · · Score: 4, Interesting

      This is why you see lots of big actors and big name directors and talent working on more and more "indie" films.

      Even so, many films with big-name actors that are called "independent" are nonetheless closely tied to studios. Remember the buzz over Eternal Sunshine of the Spotless Mind , a fresh new film made by a new group of filmmakers outside the mainstream? Well, it came from Focus Features, which despite calling itself an "art house" studio is in fact owned by Universal.

      One wonders if the accounting on European films is more honest. European film industries are heavily subsidized by the state, and when you have to report back to the state on what you've done with their funding, perhaps there is less temptation to cook the books.

    3. Re:When will they learn... by Zeinfeld · · Score: 4, Insightful
      Yeah the big actors are all hurting bad aren't they...

      Jackson himself only got paid after he sued New Line. And then New Line refused to hire him for the Hobbit in retaliation.

      Its not just that the people are crooks, they are stupid crooks. They kill the goose that lays the golden egg.

      Tolkein sold the rights to the film version of TLORT to pay a tax bill. At the time the film could not have been made, the technology didn't exist to do it well on a realistic budget.

      What New Line seem to have forgotten is that the contract had a royalty clause. They probably forgot because its stated in terms of profit and everyone knows that the films never make profits after the Holywood accounting and the California courts are owned by the studios.

      Only problem is that the contract was signed in the UK and UK law does not favor the studios on this.

      --
      Looking for an Information Security student project suggestion?
      Try http://dotcrimeManifesto.com/
    4. Re:When will they learn... by jcr · · Score: 4, Informative

      Jackson himself only got paid after he sued New Line

      Not exactly. He had already been paid quite a bit, but not nearly as much as they owed him.

      -jcr

      --
      The only title of honor that a tyrant can grant is "Enemy of the State."
    5. Re:When will they learn... by jdbo · · Score: 4, Informative

      IIRC the issue at stake was the fact that New Line struck "sweetheart deals" on much of the "tie-in revenues" which PJ was owed a piece of according to his contract; however, because these deals were struck with subsidiaries of New Line and/or New Lines's parent company, the overall $$ "New Line" (as opposed to the subsidiaries) the $$ that could have been made on those licenses - i.e. this was a shady way for the greater company surrounding New Line to move profits from the "New Line" section of the accounts (a %of which is owed to the cast and crew) while keeping it within the overall company.

    6. Re:When will they learn... by Rogerborg · · Score: 4, Interesting

      If your name doesn't come before the title, then you're never, ever getting a sniff of the gross. Even headline producers, writers and directors often can't demand that, and end up with less than the guy working the clapboard for union salary.

      One of the most egregious cases is creator/producer/writer J. Michael Straczynski getting boned over Babylon 5 . He was in for a share of the net, and Warner Brothers demonstrated by their actions that the show was making a net profit every season (or else it would have been shitcanned). However, the final figure, after all production expenses had long since ceased, and all the money from merchandise and DVD sales (half a billion gross!) was in worked out to a claimed $80 million loss. Riddle me that.

      --
      If you were blocking sigs, you wouldn't have to read this.
    7. Re:When will they learn... by John3 · · Score: 4, Funny

      Not exactly. He had already been paid quite a bit, but not nearly as much as they owed him.

      They obviously didn't pay him enough to eat. Didn't you see how much weight he lost after making those films?!? :)

      --
      "We make our world significant by the courage of our questions and by the depth of our answers." Carl Sagan
    8. Re:When will they learn... by sorak · · Score: 5, Funny

      So, is the accounting the only creative thing coming out of Hollywood these days?

    9. Re:When will they learn... by Wellspring · · Score: 4, Funny

      They don't need Peter Jackson now-- they have a big hit franchise! Just scoop up Michael Bay and it'll do just fine. Or that guy who did Time Bandits. Whatever, the point is the kids won't know the difference. In this business, movies is movies, and when you got a great property and cash flying around, the artsy types can only mess it up.

      Without guys like us making connections and cutting deals, there'd have been only one Highlander movie. And that would have been a real tragedy.

    10. Re:When will they learn... by Stooshie · · Score: 4, Informative

      ... not like he wrote the story or anything ...

      No, but he co-wrote the screenplay, directed and co-edited all three films(at the same time) and helped set up a company specifically to do the special effects. For him, it was a 10 year project, 24/7(literally). Watch the extras and you'll see he basically lived the film for the entire project. It was only because he put so much effort into it that the film was such a great success, or even got off the ground at all.

      --
      America, Home of the Brave. ... .and the Squaw.
    11. Re:When will they learn... by edwdig · · Score: 4, Informative

      Not true. jackson got paid according to his contract. However, his contract did not specify that he should get a percentage of the "tie in revenues" (games, toys etc.) He sued New Line to get a piece of that as well.

      I believe it went something like this (numbers made up):

      Jackson gets x% of the profit from New Line Pictures.
      New Line Pictures sells the DVD rights to New Line DVD for $0.50 a copy. Open market bidding would've resulted in a price of $10 a copy.
      New Line Parent Company makes tons of money on the DVDs. But Jackson's contract was with New Line Pictures, who barely made any money at all off the DVDs, so Jackson gets very little money.

      There were probably other similar items involved, but DVDs is the one I remember specifically.

    12. Re:When will they learn... by Sparky+McGruff · · Score: 4, Insightful

      It's sort of like CBS and Viacom telling shareholders that online content is worth hundreds of millions of dollars (and suing YouTube for a billion bucks) and then telling the writers that online content doesn't make any money.

      Old joke: Ask a math teacher, how much does five plus five equal, they say "10". Ask a hollywood accountant, they'll close the blinds, shut the door, and whisper "How much do you want it to be?"

    13. Re:When will they learn... by AKAImBatman · · Score: 4, Informative

      which reduces the opportunity for creative accounting.

      That's what you think. By selling the distribution rights to a subsidiary below cost, New Line was able to show a loss on the movie while their subsidiary was showing gangbuster profits. Since the contract was with New Line rather than the subsidiary, the result is that they didn't have to pay out any royalties.

      So sorry. Maybe the next film will do better? Just sign here on the dotted line and we promise cross our hearts that the next film will show a profit. Really.

      I almost guarantee that the judge will take New Line to the cleaners for such accounting. It won't change anything, though, as the studios count on it being too costly to go through a court battle to recover the money you're owed. An occasional loss in court still brings them out ahead.
  2. "'The Lord of teh Rings' trilogy". Jesus christ? by dj42 · · Score: 4, Funny

    My subject is a quote from TFA.

    Let's break this down.

    "The Lord of teh Ring's trilogy"

    You know what, I'm not even going to bother. What kind of retard submitted this?

    --
    We are one consciousness experiencing itself subjectively. Back to you with the weather, Bob!
  3. Re:Wow! by Farmer+Tim · · Score: 5, Funny

    the site's doing everything in its power to -be- Digg down to the very look and feel, and failing miserably.

    Surely failing to imitate Digg is a good thing...

    --
    Blank until /. makes another boneheaded UI decision.
  4. Re:Soo ... by hobbitFeet · · Score: 5, Insightful

    I suspect you'll find that no-one at the Tolkien Trust created "The Lord of the Rings". Although I don't approve of the studio's alleged wrongdoing with regards payment, I think it is a bit of a joke how long ownership on these things lasts. (Life + 70 years comes to mind, but that is probably wrong).

  5. Come on, the studios are right by Aaron+Isotton · · Score: 4, Insightful

    Everybody loves bashing RIAA, MPAA and the big bad studios, but come on: The Lord of the Rings was originally published in *1955* (more than 50 years ago). Tolkien died in 1973 (more than 35 years ago). The publishers really had enough time to make money; it should be public domain by now. Yes, I know copyright usually expires 50/70 years after the author's death, but these laws really need updating.

    1. Re:Come on, the studios are right by Kreigaffe · · Score: 4, Insightful

      You know, you might have a point if the movies were made this year. That would be more than 50 years after they were created, and I could maybe see a point there.

      Unfortunately for you the trilogy was released in 2001/2/3, and filming began in October of '99.

      That's pretty far short of 50 years after the work was created, and only 26 years after the death of Tolkien himself.

      Oh -- and according to Wikipedia the gross revenue of the films was $871,368,364... 7.5% of that is a hair over $6.5 million. Which means NewLine payed them less than 1% of what they were actually owed. Which, whether you think the copyright law is proper or not, when there's a contractual agreement to pay a certain amount for something and you decide "LOL FUCKIT" and actually pay less than 1% of what you said you would, well.. you're probably a giant dick and deserve to be sued for 25 times how much the original agreement was for.

      I'm just sad that this means we probably won't see a Hobbit movie.. but I guess we CAN all look forward to The Hibbot?

      --
      ... still waiting for this free-as-in-beer free beer I keep hearing about. :|
  6. In a very ironic way by zuki · · Score: 4, Insightful

    It looks like most of those around adaptations of Tolkien's works are one by one falling prey to the same
    sad curse that overtook Gollum...

    "My Precious, My Precious!... Must have the Precious!"

    If I may say so, I truly wonder what Tolkien himself would think of all this pathetic bickering and bitter lawsuits.

    Z.

    1. Re:In a very ironic way by o'reor · · Score: 4, Funny

      If I may say so, I truly wonder what Tolkien himself would think of all this pathetic bickering and bitter lawsuits.

      I think he would recommend rising an army of Elves, Dwarves, Hobbits and horsemen to besiege the Two Towers of New Line Cinema, and shoot their Nazgul lawyers whenever you get a chance.

      Wouldn't he?

      --
      In Soviet Russia, our new overlords are belong to all your base.
    2. Re:In a very ironic way by elrous0 · · Score: 4, Funny

      I truly wonder what Tolkien himself would think

      I'm not positive; but I suspect his response would be long, boring, and involve a lot of walking.

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
  7. Re:Ahh, delicious irony... by erroneus · · Score: 4, Interesting

    They haven't won their suit yet. The studios haven't yet gotten what they deserve. But I'm with you -- I hope they lose BIG. The judge should award triple damages.

  8. anyone remember dragon magazine by i.r.id10t · · Score: 4, Funny

    Anyone else remember Dragon magazine and the spoof on getting sued by the Tolkien estate - they weren't allowed to say "ring".

    "Someone get the phone, its circular metal banding off the hook!"

    --
    Don't blame me, I voted for Kodos
  9. Re:Soo ... by hansamurai · · Score: 4, Insightful

    That's a very good point, and I agree with you. But I would bet Christopher Tolkien has had some hand in the Tolkien Trust and he has done quite a bit of work on the Lord of the Rings Universe, whether you agree that's good or bad.

    But I can't believe that New Line is trying to say that they made less than one million dollars on the movies though. That's got to be worst than Cutthroat Island.

  10. Re:Ahh, delicious irony... by NickFortune · · Score: 5, Insightful

    for a property that has made New Line north of $1 billion in revenue...

    Quite a bit north, actually. In point of fact, just shy of three billion dollars. And that's not considering merchandising tie-ins, DVD sales, and all the rest of the "film related" revenue.

    So I guess we now know the answer to "what has it got in its pocketses?" A shitload of other people's money!

    --
    Don't let THEM immanentize the Eschaton!
  11. Re:Soo ... by NormalVisual · · Score: 4, Interesting

    I'm with you 100% there. Copyright is supposed to encourage authors/composers/etc. to create new works to enrich society. Tolkien isn't even enriching the ground he's buried in anymore, so there's *zero* need for a copyright to continue to exist on his works. Copyright is only providing an income stream for his heirs (and New Line) at the expense of society now.

    I think that New Line is scummy for their shady accounting practices, but they really should not have had to negotiate for the film rights to begin with.

    --
    Please stand clear of the doors, por favor mantenganse alejado de las puertas
  12. Well, answer this by tkrotchko · · Score: 5, Insightful

    I agree that 50 years is too long (or about right).

    But what do you think the same studios would say if you took a film made in 1954 and just started distributing it? They'd sue you into oblivion. Further, it was the film studios themselves who pushed for such long copyright terms.

    So I don't see they have either the legal or moral standing to complain about this. They should pay their damned bills, frankly.

    --
    You were mistaken. Which is odd, since memory shouldn't be a problem for you
  13. Re:Wow! by Random+BedHead+Ed · · Score: 4, Insightful

    Digg can be a neat site for the sheer volume of articles, but it has some serious and aggravating problems. To give one example: it was refreshing to come here this morning and find only one story about the Anonymous protests of Scientology instead of, oh, say, ten.

    The Anonymous group seems to have taken a page from Ron Paul supporters: they've positively Digg-bombed the place, putting multiple (and entirely redundant) stories onto the front page, as if this will somehow raise awareness about the CoS amongst a demographic that is vulnerable to the Church's tactics. But they can't do that on Slashdot because of the editorial control here. Add to this the fact that Digg is no longer news for nerds in the way Slashdot is (sports articles now show up with alarming frequency on Digg), and that the comments on Digg absolutely stink compared with those here (yes, they're even worse than ours).

    I enjoy Digg for its constant volume of new articles, but Slashdot's articles are much better presented (yes, even with the "teh" in TFA). If this site posted more frequent stories to compete with Digg's volume I'd have little reason to go to Digg. Volume is about the only advantage they have.

  14. If no film makes a profit... by msauve · · Score: 4, Funny

    shouldn't the MPAA be thanking filesharers, since they're diluting their losses? (just using Hollywood accounting logic here)

    --
    "National Security is the chief cause of national insecurity." - Celine's First Law
  15. Re:Soo ... by PopeRatzo · · Score: 4, Insightful

    Copyright is supposed to encourage authors/composers/etc. to create new works to enrich society. Tolkien isn't even enriching the ground he's buried in anymore, so there's *zero* need for a copyright to continue to exist on his works.
    Thank you, NormalVisual. I was wondering when someone would state the obvious.

    Since I'm someone who makes a living off his "intellectual property", I've thought about this a lot. I just can't see any benefit (as far as the original purpose of copyright is concerned) for any rights to a work of art to be transferable in any manner. I might go so far as to say an artist should be able to "license" his idea to someone else who wants to extend the work somehow, but there's no reason his grandchildren should be able to reap direct benefits from it.

    If I get rich off my work (probability: imperceptible), I'll leave the dough to my wife and daughter (who both happen to be younger and healthier than me, and thus likely to survive me). I feel the same way about patent. If an inventor wants to monetize his invention, he should either develop it himself or license it to a company to develop. When he dies, it should become public domain.

    And don't tell me this will "hinder innovation". Innovators innovate. It's what they do.
    --
    You are welcome on my lawn.
  16. Of course... by encoderer · · Score: 5, Insightful

    Here's basically how it works..

    New Line makes movie, movie costs $100MM to make.

    Movie is a moderate hit, Movie makes $150 MM in theaters and tie-ins in the first year.

    The $150 MM Profit number gets reported by New Line to your little website.

    But, there's more...

    The actual studio and sound stages aren't owned by New Line, they're owned by New Line Studios and Sound Stages, Inc.

    And they must be compensated. $5 MM.

    And, of course, the post-production is done by New Line Post Production, Inc.

    Andd they must be compensated. $10 MM.

    And then there's the TV advertising. This is done by New Line Trailer Production, Inc.

    And they must be compensated. $30 MM.

    And we can't forget the costs of booking travel and making the logistical operations. This is done by New Line Logistics

    And they must be compensated. $5 MM.

    And when it's all said and done...

    Damn...

    The movie JUST broke even.

    Sorry little fella, but New Line made a big investment here, and we just don't have the ability to pay you out of our pockets: As it is we just broke even!

    Of course, all those Subsidiaries will be kicking most of that back upstairs, but hey, that's THE BIZ!!!!

  17. Marriage as contract by Tony · · Score: 5, Insightful

    A couple breaking the promise of marriage, or a parent breaking a promise to their son or daughter is really no different...

    Marriage is a tad different, in that the things that are promised ("vowed," which is a word we don't hear often enough without irony) are impossible to promise. You may say you will love, cherish, and respect another until the day you die, but you are not promising something you can, in good faith, honestly *know* you can deliver.

    People change. Feelings change. Circumstances change. To promise to love someone forever is not a realistic promise. You can promise to *try*. But you can't promise you *will.* At least, not with any real certainty.

    In business (and in promises to kids or spouses about realistic promises), you are promising to deliver something that is within your ability. If you promised something you *can't* deliver, you are a liar. If you renege, you are a cheat (in the case of business).

    I do wish there were a code of honor these days, but there isn't. Instead, misinformation, lies, and manipulation are the norm in politics and business. So, why shouldn't it be the norm in our day-to-day lives, as well?

    Oh, well. If you do your best to be honorable, I will also do my best to be honorable. If we can get a few hundred thousand to also be honorable, we might be able to change things for the better.

    I wouldn't count on it, though.

    --
    Microsoft is to software what Budweiser is to beer.
    1. Re:Marriage as contract by TriezGamer · · Score: 5, Insightful

      Some of us believe the love is an action, not an emotion. As such, we don't necessarily believe such things are impossible to achieve.

  18. Terry Gilliam does the Hobbit? by tjwhaynes · · Score: 4, Funny

    Just scoop up Michael Bay and it'll do just fine. Or that guy who did Time Bandits.

    Now there is a great idea - have Terry Gilliam do the Hobbit. Only the plot would need some twisting to make it into Gilliam territory.

    When the dwarves are captured by the elves, at least one needs to die during interrogation while believing that they are escaping. Sting would need to be a vorpal blade. Smaug would swallow its victims and then spit out the bones. Some time travel would be inevitable while leaving Dale. Shelley Duval would make a cameo appearance asking Thorin to return the map. Thorin would become delusional and would try to reach the Mountain in a balloon. It would all end with Bard declaring that he was not the Messiah.

    Cheers,
    Toby Haynes

    --
    Anything I post is strictly my own thoughts and doesn't necessarily have anything to do with the opinions of IBM.
  19. MOD PARENT UP -- "love" is a verb, after all by zooblethorpe · · Score: 5, Interesting

    Some of us believe the love is an action, not an emotion. As such, we don't necessarily believe such things are impossible to achieve.

    Very well put. One thing that struck me after studying German for a while is that, much like "sit" and "set" or "lie" and "lay" are intransitive/transitive verb pairs differentiated by the central vowel ("sitzen" and "setzen" / "liegen" and "legen" in the German), so too are "live" and "love" ("leben" and "lieben") -- "love" is the transitive form of "live". So in that sense, loving someone is helping them live well, helping them grow and be healthy. Romance doesn't *have* to enter into this picture, which is why you can just as well love your siblings even despite a very rocky growing up. Which is also why I know that I'm loving my wife the most not when I'm feeling all lovey-dovey, but when she's annoying the crap out of me or I'm pissed as hell at her, but *still* try my damnedest to make things work.

    Love is work. Marriage is work. And the truer measure of how much you love your partner/spouse doesn't happen during the easy times -- it's how you behave and how you work at it during the rough times, even if you happen to hate each other's guts right at that moment. *That's* when you fulfill whatever promises or vows you've made.

    Cheers,

    --
    "What in the name of Fats Waller is that?"
    "A four-foot prune."