Monday, February 11, 2008

Tolkien estate sues New Line Cinema

The Tolkien estate dealt what could be a fatal blow to the film adaptation of The Hobbit today, suing New Line Cinema for failing to share any profits from The Lord of the Rings films. This according to a story in Variety today:

According to the article, the complaint seeks in excess of $150 million in compensatory damages, punitive damages, and (selfishly, the big one for me), "a declaration from the Court that the plaintiffs have a right to terminate any further rights New Line may have to the Tolkien works under the agreements, including The Hobbit."

If this story is correct, it sounds like more sleazy, underhanded work by New Line. Remember that this story comes just months after director Peter Jackson sued the studio for allegedly cheating him out of his fair share of the profits for the LOTR films, and then failing to turn over its books.

I give New Line all the credit in world for backing Rings, and for being the one studio in the world that ponied up the money and the creative license for Jackson to make all three films as he'd wished. But these latest incidents are putting New Line in a very bad light. With worldwide gross receipts of almost $6 billion dollars, are these tactics really necessary? Let's hope the damage and ill-will doesn't put any early end to The Hobbit.


trollsmyth said...

Very interesting, especially when you consider the info here:

It makes sense why he waited until after the writers' strike was over, and it actually looked like movies might get made. Still, I have to wonder what, if any, claim the Tokien estate has to any profits from the movie, since my understanding is that J.R.R. sold all those rights to Saul Zaentz.

Which means that Chris might not have a legal foot to stand on here and is either hoping for, or has arranged, a sympathetic judge.

Brian Murphy said...

Thanks for the link, Trollsmyth--that's an interesting post.

What is the substance of Christopher Tolkien's lawsuit? Well, if that blog is to be believed, the Saul Zaentz Corp, from whom New Line purchased the rights for The Lord of the Rings, has only the rights to those books and The Hobbit. From all the rumors I've heard, New Line is planning on making two films--one on The Hobbit, and the other on events in between The Hobbit and LOTR. These latter events are described in Unfinished Tales and are presumably copyright of the Tolkien Estate.

trollsmyth said...

Except that those events are kinda touched on in the appendices at the end of Return of the King, which kinda makes them grey territory.

Honestly, I'm not sure what the basis for the lawsuit is. If Saul Zaentz does, in fact, own the rights to the movies, then New Line shouldn't owe Christopher jack. Perhaps the relationship is more complex than that? Did they perhaps make use of resources that belonged to the Estate, such as J.R.R.'s notes or something? I dunno. But I think it's fairly clear that Christopher would rather not see any more movies get made.

Falze said...

Actually, the story explains pretty clearly what claim the estate has to profits:

"As outlined in the complaint, which alleges breach of contract, breach of fiduciary duty and fraud, among several other causes of action, the Tolkien trust is entitled to 7.5% gross profit participation under a 1969 agreement originally made with United Artists. Over the years, the rights passed from UA to Saul Zaentz to Miramax and, ultimately, to New Line...

While the main thrust of the complaint is that the trust has been paid nothing, the suit enumerates several areas of contention: underreporting homevideo revenue; $100 million payments to Zaentz and Miramax are treated as costs of the film; destruction of documents; and a refusal to allow any audit on the second and third films of the trilogy...

Producer Saul Zaentz, who at one time owned the film rights to the Tolkien properties, has sued New Line over profit participation twice, most recently in December. The suit alleges New Line has refused to make records available to Zaentz's auditors to allow them to conduct an audit, making it impossible to verify whether his profit participation statements are accurate."

So it seems pretty clear really, the original sale included a share of profits to the trust in exchange for the rights, which have been passed to and through Zaentz' hands to, eventually, New Line. This is right in the VF article Brian linked to.