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Count Alex's Wins
07-16-2009, 02:13 PM
I would to hear Dane's take on this.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aD.SbdnICvtE

July 15 (Bloomberg) -- J.R.R. Tolkien sold movie rights to his “Lord of the Rings” novels 40 years ago for 7.5 percent of future receipts. Three films and $6 billion later, his heirs say they haven’t seen a dime from Time Warner Inc.

The accounting methods used by New Line Cinema, the Time Warner unit that made the movies, will face a jury’s scrutiny in October, when the heirs’ lawsuit against the New York-based media company is set for trial in Los Angeles Superior Court.

The case, if not settled by then, may provide a window into accounting practices that let Time Warner deny proceeds of the Oscar-winning films to Tolkien’s heirs. The litigation also threatens to derail two “The Hobbit” films that, if their predecessors are a guide, could generate $4 billion in sales.

“Usually it’s not outright thievery by the studios, but death by contract,” said Pierce O’Donnell, the Los Angeles- based lawyer who represented the late columnist Art Buchwald in a successful case against Viacom Inc.’s Paramount Pictures in 1988. “It’s an esoteric world where black doesn’t mean black, and white doesn’t necessarily mean white.”

Tolkien’s family and a British charity they head, the Tolkien Trust, seek more than $220 million in compensation, according to Bonnie Eskenazi, an attorney with Greenberg Glusker, the Los Angeles firm representing the heirs.

The Tolkiens also want the option to terminate further rights to the author’s work, as the original contract lets them do in the event of a breach, according to the complaint. News Corp.’s HarperCollins Publishers, which holds Tolkien’s publishing rights, is also a plaintiff.

Settlement Talks

The two sides have held settlement talks, Eskenazi said, adding they remain far apart and are proceeding to trial.

“Should this case go all the way through trial, we are confident that New Line will lose its right to release ‘The Hobbit,’” Eskenazi said in an interview.

Time Warner’s attorney, Brad Brian of Munger Tolles in Los Angeles, said in an e-mailed statement today that the contract is ambiguous.

The company is asking Judge Ann I. Jones to reject the heirs’ claim they can revoke rights to the “Hobbit.”

“The studios have historically played hardball in litigation,” O’Donnell said. “Also, these are hard times and they maybe think it’s cheaper to pay the lawyers than to pay a large claim. And maybe the lawyers think they have meritorious defenses.”

New Films

Time Warner and Metro-Goldwyn-Mayer Inc. are collaborating on the new films. MGM holds international distribution rights through its ownership of United Artists, which struck the original deal with Tolkien and later sold production rights that ended up with New Line.

In an e-mail, Harry Sloan, chairman and chief executive officer of Los Angeles-based MGM, declined to comment.

Tolkien’s works already have a litigation history. Peter Jackson, who directed all three “Rings” films, sued New Line in 2005, claiming the studio miscalculated his proceeds from the first movie. They settled for an undisclosed sum in 2007. Jackson is in pre-production in Wellington, New Zealand, for the two “Hobbit” films, which he is producing, according to Scott Rowe, a spokesman for Warner Bros. in Burbank, California.

Producer Saul Zaentz, who once owned film rights to the “Rings,” also sued New Line over his share of the receipts and settled in 2005 for $168 million, Variety reported at the time.

The three films based on Tolkien’s fantasy epic -- 2001’s “The Lord of the Rings: The Fellowship of the Ring”; “The Lord of the Rings: The Two Towers” in 2002; and “The Lord of the Rings: The Return of the King,” released in 2003 -- have generated almost $3 billion in worldwide box-office receipts, and another $3 billion from DVDs, merchandise and other sources, according to Rowe.

Share of Gross

Tolkien, a writer and professor at Oxford University who died in 1973, received $250,000 from United Artists when he signed over the film rights in 1969, according to a copy of the original contract, which was filed as evidence in the case.

Under the contract, New Line was to pay a percentage of all gross receipts, after deducting 2.6 times the production costs, plus advertising expenses in excess of a certain amount, according to Eskenazi.

The heirs, including Tolkien’s son, Christopher, 84, and his daughter, Priscilla, 80, say New Line inflated expenses and excluded revenue from its calculation, meaning the family “will never see any payment at all,” according to the complaint. They also allege New Line allowed some documents to be destroyed.

New Line’s Accounting

Gross receipts typically consist of the studio’s share of box-office sales and revenue from sources such as home video, TV, merchandise and music royalties, O’Donnell said.

New Line’s accounting included 20 percent of home- entertainment revenue, instead of the 100 percent called for in the contract, the heirs say. The studio excluded foreign revenue, saying Warner Bros., not New Line, received those sales for distributing the films abroad, according to the complaint.

“The agreement says ‘all,’” Eskenazi said. “All does not mean 20 percent. All means all.”

The contract is “ambiguous” on home video, and “in any event, since home video wasn’t invented” at the time, “you look to industry custom and practice to determine a reasonable royalty, and 20 percent is the industry norm,” Brian, the studio attorney, said in the statement.

Brian also says the contract language specifies the Tolkiens’ share of revenue from the second movie, “The Two Towers,” is 2.5 percent.

Early Draft

The Tolkiens, in their complaint, say an early draft of the contract was split into two agreements, and that the accords make clear the percentage should be 7.5 percent for all films.

The heirs also question expenses, according to Eskenazi, including an advance payment to an unnamed principal in the “Lord of the Rings” films for an unrelated project, and a $1 million completion bond charged against gross receipts for each of the three films, even though a bond was issued only on “The Fellowship of the Ring.” The studio also deducted a distribution fee for the home-video market, she said.

“My instinct tells me this is Hollywood accounting in the extreme,” said O’Donnell, who wrote a book, “Fatal Subtraction: How Hollywood Really Does Business,” about the Buchwald case. “If I was a betting man I’d say there’s money owed.”

The case is Christopher Reuel Tolkien v. New Line Cinema Corp., BC385294, Los Angeles County Superior Court.

Mile High Mania
07-16-2009, 02:20 PM
Pay up!

Amnorix
07-16-2009, 02:22 PM
Christopher Tolkien is a bit of a dick, but he's probabyl right on this, knowing how cinemas operate. It's rather incredible that they're saying they don't owe a dime.

Count Alex's Wins
07-16-2009, 02:25 PM
The studios tried to rip off Peter Jackson, too.

Fuck the studios.

Frazod
07-16-2009, 02:30 PM
Christopher Tolkien is a bit of a dick, but he's probabyl right on this, knowing how cinemas operate. It's rather incredible that they're saying they don't owe a dime.

Especially considering how much money those films have made. $6 billion and they're trying to claim there wasn't enough money to pay the kids? That's awful.

And they'll both probably be dead by the time this gets resolved, which I assume is the studio's plan.

Dave Lane
07-16-2009, 02:32 PM
I'll feel bad for the studios the next time I torrent something. Fuckers!

FAX
07-16-2009, 02:34 PM
Christopher Tolkien is a bit of a dick, but he's probabyl right on this, knowing how cinemas operate. It's rather incredible that they're saying they don't owe a dime.

Right on both counts, Mr. Amnorix. If I'm counting right, anyhow.

Frankly, it's absurd to think that the heirs are due nothing from the film proceeds. I can't imagine that they would sign anything that would deny them any income from the projects. This is brazen and, more than likely, shady.

FAX

Fish
07-16-2009, 02:35 PM
Fuck Hollywood all to hell.....

Valiant
07-16-2009, 02:36 PM
As much as I want to see Hobbit.. Fuck them for being greedy dicks and not giving the money to them like they are suppose too..

Amnorix
07-16-2009, 02:40 PM
Especially considering how much money those films have made. $6 billion and they're trying to claim there wasn't enough money to pay the kids? That's awful.

Yeah, it's a joke. About the most successful film franchise ever, and they're obviously playing accounting games and saying they can't pay a dime. It's a joke.

And they'll both probably be dead by the time this gets resolved, which I assume is the studio's plan.

Might be, but they're probably underestimating Christopher Tolkien, who will probably appoint three trustees who are the toughest negotiators in England in his will and have htem follow it up until the end of time. He's kind of psycho on his father's legacy.

Amnorix
07-16-2009, 02:42 PM
As much as I want to see Hobbit.. **** them for being greedy dicks and not giving the money to them like they are suppose too..

The bad thing for fans is if the movie rights to the Hobbit revert, Christopher Tolkien will never sell them again, or at least not unless the family has artistic control, which will ilkely doom the project.

He's a nutty Tolkien-defender purist.

All that said, he's probably right here in this lawsuit. Seems very shady, as Fax said.

DaneMcCloud
07-16-2009, 02:48 PM
Whoa. Lots of anger in this thread.

First off, anyone will tell you that the first thing that an artist of any kind must do is audit: You'll always find money.

Accounting mistakes are made all the time. Incorrect royalty rates are entered into the system inadvertently and many times, they're not found until audits are performed. I've never worked in film accounting per se (I did some audit work where I audited Universal's statements for Uni's publishing arm) but in the music business, it's written into every contract that the artist(s) and composer(s) have up to three years to audit after each royalty period has closed. I assume that it's similar on the film side, though I'd have to make a few calls or emails to friends to verify.

I cannot speak to the accuracy of New Line's accounting but it seems rather odd to me that these heirs are making this claim years down the line. I would think that it would be clearly obvious that royalties were not being accounted for accurately from the beginning.

I expect a settlement to happen rather quickly.

Valiant
07-16-2009, 03:04 PM
Whoa. Lots of anger in this thread.

First off, anyone will tell you that the first thing that an artist of any kind must do is audit: You'll always find money.

Accounting mistakes are made all the time. Incorrect royalty rates are entered into the system inadvertently and many times, they're not found until audits are performed. I've never worked in film accounting per se (I did some audit work where I audited Universal's statements for Uni's publishing arm) but in the music business, it's written into every contract that the artist(s) and composer(s) have up to three years to audit after each royalty period has closed. I assume that it's similar on the film side, though I'd have to make a few calls or emails to friends to verify.

I cannot speak to the accuracy of New Line's accounting but it seems rather odd to me that these heirs are making this claim years down the line. I would think that it would be clearly obvious that royalties were not being accounted for accurately from the beginning.

I expect a settlement to happen rather quickly.

So 6billion dollars sold/made off the movies not counting against cost to make and distribute is somehow an accounting error to where they get zero money??? Are these the same people running our governments money because it seems like the same MO..

I will tell you what probably has happened; the heirs have been trying to get their money for years but the studio says we will get back to you.. These people are in their 80's they probably finally talked to somebody that said go public and get a lawyer..

Hollywood better hope they do not lose rights to the movies.. Because the only one to blame would be NewLine.. And everybody would be out a good movie..

DaneMcCloud
07-16-2009, 03:19 PM
So 6billion dollars sold/made off the movies not counting against cost to make and distribute is somehow an accounting error to where they get zero money??? Are these the same people running our governments money because it seems like the same MO..

Um, did you NOT read what I posted? If not, I'll summarize: Why would it take 7 years for these people to realize that they hadn't received the proper royalties due? Something is odd.

I will tell you what probably has happened; the heirs have been trying to get their money for years but the studio says we will get back to you.. These people are in their 80's they probably finally talked to somebody that said go public and get a lawyer..

Pure speculation. If I represented these heirs, I would have had accountants auditing years ago.

Hollywood better hope they do not lose rights to the movies.. Because the only one to blame would be NewLine.. And everybody would be out a good movie..

"Hollywood"? Is "Hollywood" now one giant corporation, like the Federal Government? I guess I missed that memo.

There will be a settlement, period.

Fish
07-16-2009, 03:27 PM
I remember hearing about the Tolkiens trying to get royalties way back before all the movies were finished. I thought they had been fighting this for a long time...

FAX
07-16-2009, 03:36 PM
When all this started, the heirs relied upon Dwarf logic. This was their fatal error. Hollywood execs don't cotton to Dwarf logic.

FAX

Buehler445
07-16-2009, 03:48 PM
Whoa. Lots of anger in this thread.

First off, anyone will tell you that the first thing that an artist of any kind must do is audit: You'll always find money.

Accounting mistakes are made all the time. Incorrect royalty rates are entered into the system inadvertently and many times, they're not found until audits are performed. I've never worked in film accounting per se (I did some audit work where I audited Universal's statements for Uni's publishing arm) but in the music business, it's written into every contract that the artist(s) and composer(s) have up to three years to audit after each royalty period has closed. I assume that it's similar on the film side, though I'd have to make a few calls or emails to friends to verify.

I cannot speak to the accuracy of New Line's accounting but it seems rather odd to me that these heirs are making this claim years down the line. I would think that it would be clearly obvious that royalties were not being accounted for accurately from the beginning.

I expect a settlement to happen rather quickly.

Ehhh...

That sounds fishy.

I don't know a damn thing about the movie industry or how Time Warner is structured, but this stuff had ought to roll up under the audit of TW. It's possible that it structurally put it out of scope, but it should roll up under accounts payable, on the financial statements just like every other expense which are audited by an external firm.

Someone should be reviewing the internal controls for Accounts Payable at least annually. It smells malicious to me.

I'm with Dane though, my ass is in court ASAP if big money like that isn't flowing.
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InChiefsHell
07-16-2009, 03:52 PM
I hate big film...

phillip
07-16-2009, 03:57 PM
it's written into every contract that the artist(s) and composer(s) have up to three years to audit after each royalty period has closed. I assume that it's similar on the film side, though I'd have to make a few calls or emails to friends to verify.


I'm no Hollywood expert, but I do doubt that the contract in question (executed in 1969) is anything like today's Hollywood music contracts.

DaneMcCloud
07-16-2009, 03:58 PM
I'm no Hollywood expert, but I do doubt that the contract in question (executed in 1969) is anything like today's Hollywood music contracts.

While that may be true (and I stated as such), the heirs were entitled to royalty payments. And I think it's it's odd that these heirs waited the better part of a decade to file suit.

DaneMcCloud
07-16-2009, 04:04 PM
Ehhh...

That sounds fishy.

I don't know a damn thing about the movie industry or how Time Warner is structured, but this stuff had ought to roll up under the audit of TW. It's possible that it structurally put it out of scope, but it should roll up under accounts payable, on the financial statements just like every other expense which are audited by an external firm.

Someone should be reviewing the internal controls for Accounts Payable at least annually. It smells malicious to me.

I'm with Dane though, my ass is in court ASAP if big money like that isn't flowing.
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I doubt there is malicious behavior on the part of the royalty department.

Maybe on the execution of the contract by the company's legal department (and that's an unfounded accusation). But I have a hard time believing that someone making $45k per year in the TW/New Line royalty division has or had any malicious intent towards these heirs and deliberately changed the royalty rates in their system to in effect, not pay out royalties due. Not only is that unfathomable, there'd be an excessive amount of earnings that would be unaccounted for by New Line. Considering that we at Paramount went beyond GAAP standards, again, I find that hard to believe.

But to the flipside: I had (have) a colleague that worked at both Paramount in the music department and at Disney in film accounting. He told me that Disney showed the original "Pirates of the Caribbean", which grossed something like $392 million, as a loser.

So I suppose, anything's possible. Which brings me back to my opening statement: Always audit.

Buehler445
07-16-2009, 04:14 PM
I doubt there is malicious behavior on the part of the royalty department.

Maybe on the execution of the contract by the company's legal department (and that's an unfounded accusation). But I have a hard time believing that someone making $45k per year in the TW/New Line royalty division has or had any malicious intent towards these heirs and deliberately changed the royalty rates in their system to in effect, not pay out royalties due. Not only is that unfathomable, there'd be an excessive amount of earnings that would be unaccounted for by New Line. Considering that we at Paramount went beyond GAAP standards, again, I find that hard to believe.

But to the flipside: I had (have) a colleague that worked at both Paramount in the music department and at Disney in film accounting. He told me that Disney showed the original "Pirates of the Caribbean", which grossed something like $392 million, as a loser.

So I suppose, anything's possible. Which brings me back to my opening statement: Always audit.

I hear you, I'm just skeptical it is a system problem. There should be appropriate internal controls that are regularly reviewed by an external audit firm specifically designed to ensure that the liabilities are accurate. Those controls would focus on Accounts Payable.

One would think it would have to come from further up the chain. If it is as widespread as you say it is, it becomes hard to chalk it up to a simple mistake.
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phillip
07-16-2009, 04:14 PM
I doubt there is malicious behavior on the part of the royalty department.

Maybe on the execution of the contract by the company's legal department (and that's an unfounded accusation). But I have a hard time believing that someone making $45k per year in the TW/New Line royalty division has or had any malicious intent towards these heirs and deliberately changed the royalty rates in their system to in effect, not pay out royalties due. Not only is that unfathomable, there'd be an excessive amount of earnings that would be unaccounted for by New Line. Considering that we at Paramount went beyond GAAP standards, again, I find that hard to believe.

But to the flipside: I had (have) a colleague that worked at both Paramount in the music department and at Disney in film accounting. He told me that Disney showed the original "Pirates of the Caribbean", which grossed something like $392 million, as a loser.

So I suppose, anything's possible. Which brings me back to my opening statement: Always audit.

If anything, it's malicious behavior attributable to the execs. Again, this is a 40-year-old contract. This isn't some automated entry programmed to pay out based on numbers inputed at the time of the contract.

Somebody had to dig up the 1969 contract (or not), and tell the royalty department what to do. There were not even personal computers at the time. This contract was physically sitting in a file somewhere for years before the movies were made.

I find it interesting that the studio is still saying they don't owe anything. They're claiming an accounting mistake. They've had time to look over everything now.

DaneMcCloud
07-16-2009, 04:35 PM
I hear you, I'm just skeptical it is a system problem. There should be appropriate internal controls that are regularly reviewed by an external audit firm specifically designed to ensure that the liabilities are accurate. Those controls would focus on Accounts Payable.

One would think it would have to come from further up the chain. If it is as widespread as you say it is, it becomes hard to chalk it up to a simple mistake.
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Right. I don't think it's a simple mistake and I don't think that there's any malicious behavior by a royalty accounting clerk.

In the case of being "liable" for accurate accounting, that job would fall to the Director of Royalties (or possibly, VP of Royalties) and the CFO. There might be an occasional internal audit (to avoid a government audit) but those are not nearly as minute as one would think. We had people checking computers for software licenses and such, but as far as looking into the exact administration of royalties of over 500,000 songs - Uh huh. That's up to the Artist and/or Composer to verify via audits.

I would guess that the royalty department did exactly as instructed by the legal department, which is exactly where this suit is headed.

Who's "right" and who's "wrong" will be decided by the lawyers.

DaneMcCloud
07-16-2009, 04:41 PM
And let's just make one more thing clear: The Heirs should have had an idea of how much they were due, years ago.

In music, we have Soundscan. Any manager of any band is going to have a Soundscan membership. It's pretty easy to take Soundscan numbers, minus Free Goods and have a good idea of how many units an artist/composer should be paid for in each royalty period. It's simple, really.

In movies, there are several websites devoted to tracking movie income. Box Office Mojo has very good information: Budget cost, earnings and marketing expenses. Any business manager can easily extrapolate these numbers and come up with a royalty number that's in the ball park.

Why these heirs waited this long is a mystery to me.

Buehler445
07-16-2009, 04:42 PM
I would guess that the royalty department did exactly as instructed by the legal department, which is exactly where this suit is headed.
.

I think this is probably the case.

It would be unwise for TW to say it was an accounting error. The audit fees they would incur if it were determined that their AP was incorrect could get close to what they'd lose in just paying them the money.
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Buehler445
07-16-2009, 04:49 PM
And let's just make one more thing clear: The Heirs should have had an idea of how much they were due, years ago.

In music, we have Soundscan. Any manager of any band is going to have a Soundscan membership. It's pretty easy to take Soundscan numbers, minus Free Goods and have a good idea of how many units an artist/composer should be paid for in each royalty period. It's simple, really.

In movies, there are several websites devoted to tracking movie income. Box Office Mojo has very good information: Budget cost, earnings and marketing expenses. Any business manager can easily extrapolate these numbers and come up with a royalty number that's in the ball park.

Why these heirs waited this long is a mystery to me.

Agreed. That's pretty retarded.
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Groves
07-16-2009, 07:47 PM
What these heirs need is to hire CP negotiator Micjones. He'd get them their money.

Raised On Riots
07-16-2009, 10:35 PM
And let's just make one more thing clear: The Heirs should have had an idea of how much they were due, years ago.

In music, we have Soundscan. Any manager of any band is going to have a Soundscan membership. It's pretty easy to take Soundscan numbers, minus Free Goods and have a good idea of how many units an artist/composer should be paid for in each royalty period. It's simple, really.

In movies, there are several websites devoted to tracking movie income. Box Office Mojo has very good information: Budget cost, earnings and marketing expenses. Any business manager can easily extrapolate these numbers and come up with a royalty number that's in the ball park.

Why these heirs waited this long is a mystery to me.

Dane, would it be possible for both the heirs to get their money AND for me to never endure seeing another faggy Hobbit-related media venture?

HonestChieffan
07-16-2009, 11:37 PM
More reason to hate lawyers. And Lawyers who are also accountants. Thats the worst breed of a man.

DaneMcCloud
07-16-2009, 11:42 PM
Dane, would it be possible for both the heirs to get their money AND for me to never endure seeing another faggy Hobbit-related media venture?

That's a tall order, my friend

Raised On Riots
07-16-2009, 11:49 PM
That's a tall order, my friend

Nothing the Legendary Dane McCloud can't handle, I'm sure!:D

phillip
07-17-2009, 12:47 AM
Dane, would it be possible for both the heirs to get their money AND for me to never endure seeing another pillowbitergy Hobbit-related media venture?

Dane is not an attorney afaik, and I'm sure he hasn't seen the contract. Nobody here can answer that question.

phillip
07-17-2009, 12:52 AM
More reason to hate lawyers. And Lawyers who are also accountants. Thats the worst breed of a man.

That doesn't make any sense. The lawyers had nothing to do with royalty distribution for a contract made before they passed the bar. Its the execs who are trying to hold all the profits. The attorneys are just doing their jobs and asserting TW's legal position. It's what they're paid to do. Thy don't decide how to manage the company.

morphius
07-17-2009, 01:04 AM
While that may be true (and I stated as such), the heirs were entitled to royalty payments. And I think it's it's odd that these heirs waited the better part of a decade to file suit.
Well, it wasn't till 2005 when Jackson went after him, and he didn't get paid until 2007, and he is a hollywood insider.

DaneMcCloud
07-17-2009, 01:29 AM
Well, it wasn't till 2005 when Jackson went after him, and he didn't get paid until 2007, and he is a hollywood insider.

2005 is a far cry from 2009.

Auditing does take time. Especially when you're auditing box office receipts from every territory and every country in the world. Most are at least one year behind, if not more.

Raised On Riots
07-17-2009, 01:42 AM
2005 is a far cry from 2009.

Auditing does take time. Especially when you're auditing box office receipts from every territory and every country in the world. Most are at least one year behind, if not more.


I always wondered how they tallied the count on vinyl jukeboxes for royalties back in the day because I understand it was a "per play" arrangement.

And speaking of such matters, are the LA Clubs still doing the "pay to play" ticket sales trip?

DaneMcCloud
07-17-2009, 01:46 AM
I always wondered how they tallied the count on vinyl jukeboxes for royalties back in the day because I understand it was a "per play" arrangement.

I'll address this another time, Bro. It's complicated and late. I had a long day, so my apologies.

And speaking of such matters, are the LA Clubs still doing the "pay to play" ticket sales trip?

The Strip? Yes. Other clubs? No. The "scene" is dead. L.A. hasn't had a real scene since 1990 (or before Nirvana).

Lost story, short: Unless you can sell 500,000 units immediately out of the gate because you're either a Disney Kid or your doing something outrageously new and cool, don't bother.

It's a very weird time.

ClevelandBronco
07-17-2009, 02:56 AM
Jeez. Who cares if the movies are made?

Read the frigging books.

JohnnyV13
07-17-2009, 03:04 AM
Yeah, I'm pretty puzzled by how long it took for the Tolkiens to bring suit. I'm especially curious how the studio says they have a 2.5 percent royalty rate for the second movie while the Tolkiens say 7.5 for every movie.

I'm sure a 1969 contract is going to be seriously defective in dealing with video (didn't exist) and merchandising rights. I'd guess Tolkiens attorneys would be filing for an injunction to prevent release of the Hobbit movie, until this case could be decided. If they win that, the studio will probably settle pretty quickly.

If the Tolkiens lose that injunction, then the studio will just draw it out hoping the Tolkiens die. The best case for the studio would be if the Tolkien heirs then got into some kind of battle.

petegz28
07-17-2009, 07:32 AM
Gawd darnit....I want the Hobbit movies !!!! I have been hoping and hoping for these for a while.They better figure this shit out before actors start dying off. Seriously!

petegz28
07-17-2009, 07:33 AM
Jeez. Who cares if the movies are made?

Read the frigging books.

The Hobbit is only 1 book. Secondly, I have read it. Thirdly, I want the movies!

morphius
07-17-2009, 08:16 AM
2005 is a far cry from 2009.

Auditing does take time. Especially when you're auditing box office receipts from every territory and every country in the world. Most are at least one year behind, if not more.
Well, it is possible that they were working towards a suit as far as back then, saw Jackson do it and figured they could just use the data from his lawsuit to get the money with less work from their own lawyers. Year and half after the decision they decide they are still to far apart and sue.

Amnorix
07-17-2009, 09:26 AM
Yeesh, you half-baked lawyers.

Ok, first Tolkien's estate sued New Line in early 2008, not in 2009.

By Thomas S. Mulligan, Los Angeles Times Staff Writer
February 12, 2008
The charitable trust of "Lord of the Rings" creator J.R.R. Tolkien sued New Line Cinema Corp. on Monday for allegedly cheating it out of at least $150 million from the blockbuster movie trilogy based on the late British author's fantasy sagas.
The London-based Tolkien Trust said in its complaint, filed Monday in Los Angeles Superior Court, that under a 1969 contract with the studio that held the original rights to the work, the trust and other plaintiffs were entitled to 7.5% of gross receipts, "less certain expenses," from the films and related products. According to the suit, worldwide grosses from the trilogy have reached nearly $6 billion.

http://articles.latimes.com/2008/feb/12/business/fi-newline12


Second, this is a breach of contract claim, which in California has a statute of limitations of four years.

Breach of Written Contract - 4 years

http://lawzilla.com/content/ca-tort-002.shtml

The first LoTR movie came out in December 2001, which of course is more than four years ago.

HOWEVER, the breach of the contract did not occur when the movie was released. It most likely occurred when New Line first informed the estate that it was owed nothing. In order to not be time-barred, the breach itself must have occurred no earlier than February 2004. Since the third and final movie didn't come out until December 2003, and obviously the accounting would not have been done until some time after that, it would seem the estate filed the suit in a timely manner.

Unless teh contract was written on a per-movie basis, which could throw the matter into some doubt as the royalties for each movie might have constituted a separate breach.

soundmind
07-17-2009, 09:54 AM
Incredibly shady Mr. Fax, but such is the nature of big business and corporate contracts. The big idea is always to screw over your neighbor and fellow man. If at all possible, take all his work, package it, sell it, and claim 100% of the credit - deny all knowledge of the situation and refer to your legal counsel.

FWIW, the Tolkien's are actually throwing them a bone too....and one they don't deserve. Technically, off the $6B, 7.5% is $450M and they're only asking for $220M.

FAX
07-18-2009, 10:34 AM
Yeesh, you half-baked lawyers.

Ok, first Tolkien's estate sued New Line in early 2008, not in 2009.



http://articles.latimes.com/2008/feb/12/business/fi-newline12


Second, this is a breach of contract claim, which in California has a statute of limitations of four years.

Breach of Written Contract - 4 years

http://lawzilla.com/content/ca-tort-002.shtml

The first LoTR movie came out in December 2001, which of course is more than four years ago.

HOWEVER, the breach of the contract did not occur when the movie was released. It most likely occurred when New Line first informed the estate that it was owed nothing. In order to not be time-barred, the breach itself must have occurred no earlier than February 2004. Since the third and final movie didn't come out until December 2003, and obviously the accounting would not have been done until some time after that, it would seem the estate filed the suit in a timely manner.

Unless teh contract was written on a per-movie basis, which could throw the matter into some doubt as the royalties for each movie might have constituted a separate breach.

Don't be so stuck up, Mr. Amnorix. You may know some stuff, but some of us know stuff, too.

For example, as a lay-attorney, I know for 100% certain that they could claim separate breaches. This will give counsel for the plaintiff the option to add up all the separate breaches into one, single breach. This total amount would be the sums-a-breaches.

FAX

keg in kc
09-09-2009, 12:51 AM
Looks like the saga finally has an ending...THE HOBBIT can now officially move forward! (http://www.aintitcool.com/node/42283)

Hey folks, Harry here... and as Harlan Ellison calls em, Those Furry Footed Fuckers, have been unleashed again. As we know, the Tolkien estate has really wanted to get the profits owed to them for the moderately successful LORD OF THE RINGS films - and it looks like they'll be dividing up around $220 million, at least, to the Tolkiens and HarperCollins. What this means is that there will not be an injunction or any other legal document that will render the one true ring, just a hunk of jewelry not fit for our Silver Screens. Nope. We're gonna get our two HOBBIT films by Guillermo Del Toro, whose feet I don't remember being furry... but he does match the description of a Dwarvish lady on an occassion here or there.

Lest you think the Tolkien family are going to turn those hundreds of millions into a hollowed out mountain of gold to swim in... you'd be wrong. They apparently do a ton of heavy duty charity work that well, this settlement doesn't only get us our future HOBBIT films, doesn't just make the Tolkien family deservedly richer... but more than a 100 great charities will be able to do great work.

This was always going to be the end of this particular snag, it was more about finding that number that all parties could live with.

Count Alex's Wins
09-09-2009, 01:08 AM
Cool, I can attend alone and cry soft tears of joy during the credits.

googlegoogle
09-09-2009, 01:28 AM
The hobbit movie done as an honest likeness of the book would be excellent.

I thought lord of the rings had too many dull moments and was too CGI.

DaneMcCloud
09-09-2009, 01:32 AM
Looks like the saga finally has an ending...

Cool, I can attend alone and cry soft tears of joy during the credits.

Whoa. Lots of anger in this thread.

First off, anyone will tell you that the first thing that an artist of any kind must do is audit: You'll always find money.

Accounting mistakes are made all the time. Incorrect royalty rates are entered into the system inadvertently and many times, they're not found until audits are performed. I've never worked in film accounting per se (I did some audit work where I audited Universal's statements for Uni's publishing arm) but in the music business, it's written into every contract that the artist(s) and composer(s) have up to three years to audit after each royalty period has closed. I assume that it's similar on the film side, though I'd have to make a few calls or emails to friends to verify.

I cannot speak to the accuracy of New Line's accounting but it seems rather odd to me that these heirs are making this claim years down the line. I would think that it would be clearly obvious that royalties were not being accounted for accurately from the beginning.

I expect a settlement to happen rather quickly.

Will you guys ever learn?

:p

Raised On Riots
09-09-2009, 02:15 AM
You can watch a Hobbit movie every time that little piece of shit steps on the field in his #4 jersey.

BWillie
09-09-2009, 03:00 AM
God I hope they quit making these horrendous things.

Raised On Riots
09-09-2009, 03:01 AM
God I hope they quit making these horrendous things.

Brother, you said it.:thumb:

kysirsoze
09-09-2009, 03:45 AM
Well I clearly don't have anywhere close to Dane's experience with entertainment contracts, but the couple of legit commercials I've booked, it's been a complete clusterfuck trying to get paid what I'm owed. I can only imagine the confusion and bickering that goes on when the pay scale slides up to the millions.

Silock
09-09-2009, 04:52 AM
As far as them waiting: Perhaps the studios kept saying "Check is in the mail" and they kept waiting and waiting. They threaten to bring suit, studio dicks around some more. Lawyer is finally hired and suit is filed. I could see it taking a long time to get to that point. Perhaps they were waiting on lawyer's advice for it to get to the point where a large settlement would happen, happen quickly and the family to be certain to get paid.

salame
09-09-2009, 05:18 AM
http://www.utoronto.ca/stmikes/kelly/images/hobbit.jpg

Silock
09-09-2009, 05:57 AM
That had the coolest music.

DaneMcCloud
09-09-2009, 11:02 AM
Well I clearly don't have anywhere close to Dane's experience with entertainment contracts, but the couple of legit commercials I've booked, it's been a complete clusterfuck trying to get paid what I'm owed. I can only imagine the confusion and bickering that goes on when the pay scale slides up to the millions.

Unfortunately, I've experienced that as well. It seems that people forget about payment after services are rendered. It's a disgusting practice.

Pestilence
09-09-2009, 11:57 AM
God I hope they quit making these horrendous things.

STFU

Pestilence
09-09-2009, 12:00 PM
http://www.utoronto.ca/stmikes/kelly/images/hobbit.jpg

I have this on DVD.

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Mr. Flopnuts
09-09-2009, 12:13 PM
God I hope they quit making these horrendous things.

Brother, you said it.:thumb:

You guys are fucking crazy. Those movies were some of the best movies I have ever seen, and I can't begin to tell you how much I am not enthralled by theatre. For me to watch a movie, let alone watch it twice it needs to be something special. I'll sit down and watch any version of the latest LOTR movies anytime, anyplace. They are true pieces of art.

Raised On Riots
09-09-2009, 12:28 PM
You guys are fucking crazy. Those movies were some of the best movies I have ever seen, and I can't begin to tell you how much I am not enthralled by theatre. For me to watch a movie, let alone watch it twice it needs to be something special. I'll sit down and watch any version of the latest LOTR movies anytime, anyplace. They are true pieces of art.

Just listen to Led Zeppelin 4; same thing.

Mr. Flopnuts
09-09-2009, 01:39 PM
Just listen to Led Zeppelin 4; same thing.

LMAO That's worth The Ron Jeremy Rep Stick.

Raised On Riots
09-09-2009, 01:40 PM
LMAO That's worth The Ron Jeremy Rep Stick.

Yes!:clap:

googlegoogle
09-09-2009, 04:19 PM
You guys are ****ing crazy. Those movies were some of the best movies I have ever seen, and I can't begin to tell you how much I am not enthralled by theatre. For me to watch a movie, let alone watch it twice it needs to be something special. I'll sit down and watch any version of the latest LOTR movies anytime, anyplace. They are true pieces of art.

Mr. Flop. the first Lord of the Rings was good but i didn't care for the other two because of pace and dull moments. Just too long for me.


I enjoyed the hobbit book. Would make a good movie if it's exactly like the book. Some of the CGI in the 'LOTR' movies weren't what Tolkien painted in his books.

Mr. Flopnuts
09-09-2009, 04:24 PM
Mr. Flop. the first Lord of the Rings was good but i didn't care for the other two because of pace and dull moments. Just too long for me.


I enjoyed the hobbit book. Would make a good movie if it's exactly like the book. Some of the CGI in the 'LOTR' movies weren't what Tolkien painted in his books.

I really thought the pace was great. But I can always respect a well thought out and articulated disagreement. I loved the extended version of the movies better than the originals. Maybe I'm just a fan boy of the entire genre and was happy to see someone do it, and do it seriously. They're probably my favorite movies of all time.

Pestilence
09-09-2009, 04:26 PM
I really thought the pace was great. But I can always respect a well thought out and articulated disagreement. I loved the extended version of the movies better than the originals. Maybe I'm just a fan boy of the entire genre and was happy to see someone do it, and do it seriously. They're probably my favorite movies of all time.

This. I can (and have) sit down and watched all three extended versions back to back.....to back.

Mr. Flopnuts
09-09-2009, 04:27 PM
This. I can (and have) sit down and watched all three extended versions back to back.....to back.

Yeah. An entire day and not once been bored with it. We're fuckin dorks dude. I'm good with that.

Groves
09-09-2009, 05:19 PM
Some of the CGI in the 'LOTR' movies weren't what Tolkien painted in his books.

You mean Tolkien wasn't envisioning characters 'surfing' down piles of enemies on shields?

It is a real bummer that the campy-ness can only be held at bay for so long.

My kids were recently smacked in the face with the movie rendition of "Swiss Family Robinson" after reading the book.

Tragic.