Tolkien Estate Threatens to Pull Hobbit Film Rights From New Line

Posted on February 11, 2008

Photo of Mount DoomHere we go again. The Tolkien Trust and Harpercollins are suing New Line for failing to pay contractually required gross profit participations from the three Lord of the Rings movies. Sound familiar? It should. That was the whole basis of the dispute between Peter Jackson and New Line that caused The Hobbit movie to be so delayed that Jackson can't even direct it due to other commitments.
According to the suit, although the "Lord of the Rings" films produced by New Line are among the most financially successful films ever created, with worldwide gross receipts of nearly $6 billion, New Line has failed to pay the plaintiffs any portion of the gross profit participation they are entitled to under their deal.

The complaint seeks, among other things, in excess of $150 million in compensatory damages, as well as punitive damages, and 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", due to the serious and material nature of the breach of the agreements.

Bonnie Eskenazi, the trustees' U.S. counsel who filed the complaint, said, "New Line has brought new meaning to the phrase 'creative accounting.' I cannot imagine how on earth New Line will argue to a jury that these films could gross literally billions of dollars, and yet the creator's heirs, who are entitled to a share of gross receipts, don't get a penny."

The trustees' UK lawyer, Steven Maier, of Manches LLP, added: "The Tolkien trustees do not file lawsuits lightly, and have tried unsuccessfully to resolve their claims out of court. But in this case, New Line has left them no option at all. 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. To make matters worse, to date New Line has even prevented the plaintiffs from auditing the last two films of the series."

They didn't pay the Tolkien estate one dime??? They claimed they never made a profit?? New Line apparently has no shame whatsoever. We say: throw them into the flames of Orodruin. Oh, and as for The Hobbit movie? That is so not happening unless The Tolkien Estate says so.

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