Apparently, New Line Cinema is not interested in paying people what they've been promised at all. You may recall that Lord of the Rings director Peter Jackson sued New Line a few years ago for allegedly shortchanging him on profit participation. The case was only settled last December, with Jackson earning a pretty penny.
Now, the Tolkien Trust, the British charity that manages the estate of LOTR author J.R.R. Tolkien, is suing New Line for $150 million, what they claim they've earned in gross profit participation. Allegedly, the Tolkien estate has yet to earn a cent from the $6 billion the Lord of the Rings trilogy has grossed.
Bonnie Eskenazi, who represents the trust, told the press, "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 Tolkien heirs made a deal in 1969 with United Artists that they would be entitled to 7.5% gross profit participation. The rights passed from UA, to Saul Zaentz, to Miramax, and eventually to New Line. Zaentz himself has sued New Line twice over profit participation, alleging that New Line has not made records available that would reveal how much Zaentz is entitled to.
Obviously something suspicious has been going on in the accounting department of New Line, but there is one clear downside to this latest lawsuit. Namely, the Tolkien Trust wants punitive damages, including "a declaration from the court that the plaintiffs can terminate any further rights New Line may have to the Tolkien works under the agreements -- including The Hobbit." There's no telling what could happen next in this suit, but it looks like the Tolkiens may want The Hobbit shut down permanently. Just when Peter Jackson and Guillermo del Toro were going to finally make it happen...
On an optimistic note, New Line is too crafty to let a blockbuster like The Hobbit go without a fight. Ultimately, I think the Tolkiens are just trying to scare the studio, and this is their way of squeezing a little extra money out of New Line before the movie gets made. Tolkien's books are a gold mine, both sides of the argument would be crazy to suppress them or let them be suppressed.