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Loopy Hollywood Accounting on Lord of the Rings?

By Jonathan Handel

Is it the same old line from New Line? The Tolkien Trust thinks so.

That org, a charity controlled by the heirs of J.R.R. Tolkien, has sued New Line for $150 million, alleging that the studio failed to pay a 7.5% gross profit participation due on the three "Lord of the Rings" films, report Variety and The Hollywood Reporter.

Those films have allegedly grossed nearly $6 billion worldwide, yet New Line has paid no gross participation at all, says the legal complaint. The suit also seeks punitive damages, and the right to terminate New Line's rights in the Tolkien properties.

That last remedy would endanger New Line and MGM's planned feature "The Hobbit," which is to be produced by Peter Jackson, who directed the "Rings" films.

The Tolkien Trust (which is joined in the suit by the publisher HarperCollins) is not the first to complain that New Line's profit accounting is as fantastical as the films themselves. Jackson, for one, sued New Line on those grounds. That suit settled in December.

And producer Saul Zaentz sued New Line twice over profit participations. One suit is still pending. (It's not immediately clear to me how the other suit was resolved.)

Lord of the Rings? More like "Lord of the Lawsuits."

Full post as published by Digital Media Law on February 12, 2008 (boomark / email).