Peter Jackson sues over 'Rings' profits

[BJ_M]

LOS ANGELES, California (Hollywood Reporter) -- "Lord of the Rings" director Peter Jackson has sued New Line Cinema for allegedly withholding profits from the first film in his Oscar-winning trilogy, "The Fellowship of the Ring."

The suit, filed in U.S. District Court in Los Angeles by Jackson's company, Wingnut Films Ltd., makes 19 allegations, including breach of contract, breach of good faith and fair dealing and unfair competition.

One of the principal claims of the suit is that Time Warner Inc.-owned New Line engaged in various forms of "self-dealing" with affiliated companies, an issue that has been vigorously pursued by plaintiffs attorney Stanton "Larry" Stein.

It seeks unspecified damages, restitution and an order barring New Line from striking any more deals without seeking the most competitive and beneficial terms from unaffiliated third parties.

The case stems from a 1998 written agreement for Wingnut and New Line to jointly produce and distribute the three films. Among other terms, Wingnut got paid a fixed fee and shared in "first dollar" gross receipts.

New Line is accused of improperly deducting certain home video costs that were not spelled out in the agreement, paying an incorrect royalty rate for DVD sales, delaying the reporting of certain licensing revenue and failing to audit subdistributors, including those affiliated with New Line.

The latter claim goes to the broader issue of self-dealing, in which Wingnut accuses New Line of allowing its subdistributors to charge a higher fee than would be expected from nonaffiliated companies.

Companies that have sued under this theory tend to claim that a partner cut a favorable deal with an affiliate rather than put the license or property out to bid in the free market.

In a statement, Jackson's attorneys said they attempted to resolve the dispute with New Line through a routine audit. "That has proven unsatisfactory thus far, (and) this lawsuit is the next logical step," Jackson's representatives said.

New Line officials said they do not comment on pending litigation.

The suit against New Line and its subsidiary Katja Motion Pictures Corp. concerns only the 2001 film, which the suit notes has grossed $314.8 million at the North American box office and more than $556 million internationally, not counting merchandising and video revenue. The suit makes no mention of the other two films in the trilogy.

New Line also is accused of failing to include revenue and other guarantees received from promotional partners in merchandising receipts. Wingnut claims it also was not compensated for the use of lyrics penned by Jackson's wife and collaborator, Fran Walsh, and the couple's script in video games.

[nic2k4]

In contrast to the MPAA's actions, hmm...

Pot meet kettle.

[EvilWizardGlick]

Interesting that this comes when new Line is parting ways with Disney.
Could it be backlash for supporting F911 and Moore?

[BJ_M]

nah -- he just wants his money


studios do these tricks all the time ..

[kirpen]

Didnt the same thing happen with the x-files. Fox sold the rights to fox for lttle money cheating everyone out of their money except fox.

[housepig]

the stuff is done with almost every major film.

take a look at "Sex, Stupidity and Greed" by Ian Grey for some other good ones... like the fact that every movie to come out of one studio has to pay a 35% "overhead" fee for use of the studio lot... so this piece of studio property has recieved 35% of the production cost of every movie the studio has produced as rent.

man, there's a lot I'd like to be the landlord on.

for this, and other "Hollywood accounting" variations, there is almost no movie that has ever turned a profit on paper. the author of "Forrest Gump" had to sue, Stan Lee sued over "Spider-Man", and the list goes on and on and on...

[BJ_M]

yep == and IF they ever do show a profit -- that will go to advertising and marketing usually ... and you can guess what company they will use ....


thats why so many naive actors got ripped off on a contract that pays a share of the NET profit ... there isnt any ..

now they go for the GROSS % of the boxoffice receipts (which are audited) and/or upfront payments ..


Keanu Reeves will make hundreds of millions because of the contract he got ..

will smith and Ewan McGregor were the first choices to play NEO , but both turned the roll down . Jean Reno was to play agent smith ..

i bet they are kicking themselves now

[kisrum]

One of the older and funnier examples was when James Garner discovered that after the Rockford Files had been on US TV for 9 years it STILL hadn't shown a profit according to the studio, so he wasn't being payed any royalties as producer. He sued and won, although I don't know how much, or if it really covered his losses.

[cal_tony]

BJ_M
Thanks for the update, but, it's not new, or news
but as usual, it's probobly very accurate,
and as usual, it's always depressing to hear.

[Capmaster]

One of the older and funnier examples was when James Garner discovered that after the Rockford Files had been on US TV for 9 years it STILL hadn't shown a profit according to the studio, so he wasn't being payed any royalties as producer. He sued and won, although I don't know how much, or if it really covered his losses.

If I remember correctly there was a major internal flap at the studio after the Garner incident. There should have been

[BJ_M]

BJ_M
Thanks for the update, but, it's not new, or news
but as usual, it's probobly very accurate,
and as usual, it's always depressing to hear.

i would say its pretty new since it was filed today and it is news as it is video and media related and I don't think its depressing -- to anyone ...

in fact are you sure you posted in the right thread ?

[jaxxboss]

Ditto with Hercules. Whats his name from Andromeda series. He is suing because he wasnt geting $$ and they told him the series wasnt making any $, yet it was palying in syndication all over.

[Nilfennasion]

If the suit delays him from working on other films, then I am all for it. Elves über alles... sorry, The Lord Of The Rings is quite seriously one of the biggest examples of why Hollywood's sales figures continue to decline.

[BJ_M]

sales are up --

and LoTR has made over a billion (from all sources) , so not not the best examples ....

[Nilfennasion]

I would not be surprised to learn that New Line includes merchandising and other licensing income in that figure. But that aside, a day will come when a Jackson film doesn't gross dollar one. Eddie Murphy used to say that all of his films have made money. Then The Adventures Of Pluto Nash, made on a budget of $100 mil, grossed a little over $4 mil, setting a record for the least profitable film in Hollywood history. There are already enough people who consider Jackson racist and arrogant, so all he needs to do is offend more of the right people. The clock is ticking for him.

[BJ_M]

Biggest Money Losers, Based on Absolute Loss on Worldwide Gross

Release Date - Movie Distributor - Budget - Worldwide Gross - Loss
(TOP 5)
1 4/27/2001 - Town & Country - New Line - $105,000,000 - $6,712,451 -$101,643,775

2 7/11/2001 - Final Fantasy: The Spirits Within - Sony - $137,000,000 - $74,400,000 - $99,800,000

3 8/16/2002 - Adventures of Pluto Nash, The - Warner Bros. - $100,000,000 - $4,411,102 - $97,794,449

4 8/27/1999 - 13th Warrior, The - Buena Vista - $125,000,000 - $59,800,000 - $95,100,000

5 12/22/1995 - Cutthroat Island - MGM/UA - $92,000,000 - $9,910,021 - $87,044,990

[BJ_M]

he biggest flop in percentage on money spent/earned is D-Tox..

Budget
$55,000,000

Gross
$79,161 (USA)

[housepig]

will smith and Ewan McGregor were the first choices to play NEO , but both turned the roll down . Jean Reno was to play agent smith ..

i bet they are kicking themselves now

well, that begs the question "would it have been as popular or made the same money with any of those substitutions?" hard to say - did people go for the story, or for the combination of story and actor?

also - what's up with the math in your other post? how does 137 - 75 = 99? or 125 - 60 = 95? am I missing something?

[cal_tony]

BJ_M
Sorry for giving you the wrong impression. My dispair stems from the fact that in a bis whose product is creativity, it seems the only creative people always making money is the accountants. The Hands on people that generate the product, lots of times, seem to be getting the short end of the stick, and politicians just don't seem to be helping the process along.

[BJ_M]

the other post is not 'math' ... it is the original budget , the gross and the loss ..

it does not take into account other expenses and over budget costs (i wondered myself and looked it up)

[BJ_M]

BJ_M
Sorry for giving you the wrong impression. My dispair stems from the fact that in a bis whose product is creativity, it seems the only creative people always making money is the accountants. The Hands on people that generate the product, lots of times, seem to be getting the short end of the stick, and politicians just don't seem to be helping the process along.

funny enough i was just looking at these figures

Salary
Avenging Angelo (2002) $20,000,000
D-Tox (2002) $20,000,000
Driven (2001) $20,000,000
Get Carter (2000) $20,000,000
Cop Land (1997) $60,000
Daylight (1996) $20,000,000
Assassins (1995) $20,000,000
Judge Dredd (1995) $20,000,000
The Specialist (1994) $15,000,000
Demolition Man (1993) $15,000,000
Cliffhanger (1993) $15,000,000
Rocky V (1990) $15,000,000
Tango & Cash (1989) $15,000,000
Lock Up (1989) $15,000,000
Rambo III (1988) $15,000,000
Over the Top (1987) $12,000,000
Rocky IV (1985) $15,000,000
Staying Alive (1983) $10,000,000
First Blood (1982) $3,500,000
Rocky III (1982) $10,000,000
Rocky (1976) $23,000
Death Race 2000 (1975) $1,000/week
The Party at Kitty and Stud's (1970) $200

As of 2004 is the all time Razzie Award champion, with a record 30 nominations and 10 "wins", more than any other person in history




The ten awards from the Razzies that he's won are Worst Actor of 1985 for Rhinestone (1984), Worst Actor of 1986 for both Rambo: First Blood Part II (1985) and Rocky IV (1985), Worst Director of 1986 for Rocky IV (1985), Worst Screenplay of 1986 with James Cameron and Kevin Jarre for Rambo: First Blood Part II (1985), Worst Actor of 1989 for Rambo III (1988), Worst Actor of the Decade (1980's), Worst Actor of 1993 for Stop! Or My Mom Will Shoot (1992), Worst Screen Couple of 1995 with Sharon Stone in The Specialist (1994), Worst Actor of the Century, and Worst Supporting Actor of 2004 for Spy Kids 3-D: Game Over (2003).

Oddly 1994 was one of the few years he was not nominated for an acting Razzie Award. Even though he had appeared in both the films Cliffhanger (1993) and Demolition Man (1993) in 1993. Though both films did recieve other nominations, including Cliffhanger (1993) receiving a Worst Screenplay nomination for Stallone himself.

[Nilfennasion]

I misquoted with that one. One site I read about Pluto Nash on called it the least profitable of all time. According to the IMDB, it made the biggest loss of all time in absolute terms (over 93.5 million).

Either way, it seems every filmmaker who gets too big for his boots, so to speak, winds up making a film that makes nothing. As far as I am concerned, Peter Jackson's days are numbered.