Spare a copper guv....?
Looks like poor old MGM may need to find a Dragon hoard ......
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Maybe MGM will find that New Line's 'creative accounting' over the LotR movies comes back to bite them badly as regards getting new finance - claiming that they made no profit from the trilogy might have seemed a good idea at the time, as a way to avoid handing over anything to those who worked on the movie & in particular to the Tolkien Estate, but how many investors will want to put money into the Hobbit movies (particularly in the current economic climate) if they may risk the same thing? After all, the Hobbit movies could apparently gross billions of dollars but still not make any 'actual' profit....
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Urrrrrrrrrrgh.
This is the reason why I tell 99.9% of people planning on starting a production company to learn how to crochet instead (unless they're going small, niche and creative). The crisis is bad enough, but Hollywood essentially runs on outdated business models. There's hardly any money for anything good, so you get stuck making straight-to-DVD schlock, while changing media is ensuring that the idea of "big stars" is becoming more and more obsolete - which in turn makes "big blockbusters" trickier to pull off. It's not nearly as bad as the music business, which basically poured gasoline on itself and stuck a match as a result of greed (yeah, getting rid of singles CD and trying to force people to buy an entire bad album was really, really smart right as downloading gained momentum), but it's bad. On one hand, you feel bad for the big studios facing these crises, if only because genuinely good films under their wings are going to get their budgets slashed or grind down altogether, on the other hand, enough is enough. |
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Moving forward, I rather think the financial crisis hitting Hollywood is both a good & bad thing. Yes it may mean some of the bigger studios either merging or going out of business altogether; but then it may mean the end of such ridiculous salary demands of some so-called "A" lists actors and their ageints with their $30m per film silliness. Of course it will mean original screenplays will be few and far between as studios will only stick with what they know will be profitable. Much in the same way that some software houses that right computer games are more or less sticking to tedious FPS, sports franchises and not much else given the huge cost in developing & publishing a game. I just hope The Hobbit film does get the green light, and that there's a little more honesty & transparency when it comes to watching where the profits end up |
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http://www.variety.com/article/VR111...goryid=13&cs=1 |
William, I think the Tolkien Estate will get their proper dues, it's just the American legal system is tremendously slow. Plus there are several sales of rights to wade through. United Artists, Zaentz and others broke apart the rights and sold different parts to different places. One company has merchandise rights, MGM and NL were in a battle over who had The Hobbit film rights, supposedly NL has the 7.5% gross receipt clause that is owed to the Estate, but NL was trying to claim they only leasers, and Saul Zaentz should be responsible for the 7.5%. Which is ridiculous, and NL has shown this "creative accounting" before, with the actors and Jackson's lawsuits.
This was all a while ago, so I may have fallen behind, but the U.S. legal system is molasses, and now that NL is absorbed, the execs in charge are gone, who knows what the Tolkien Estate can do? It would be great if anyone had updated info about the lawsuit. :) |
Such creative accounting seems to be quite rife across big corporations, film studos and of course, financial institutions such as the odorous banks & loan companies.
I hope lessons will be learnt and that there will be laws demanding more clarity when it comes to cash flow, profits and who gets what. ...although I am not holding my breath! |
http://www.laweekly.com/2009-05-21/n...llywood-style/
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Bear in mind there is just the one accountancy joke: What is 2+2? What do YOU want it to be? |
the tolkien estate makes 7.8 million dollars a year, and I hate to say this however, movie studios make movies so they need funds more dearly than the estate.
Creative accounting is everywhere, especially "Non-Profits" just give the "not profit" money to some as a bonus voila profit gone. |
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The estate also gives millions of dollars to charities and the point of the lawsuit is to seek money that is owed to them. Money that they deserve from a contract signed 40 years ago. Not to get into some philosophical state of the world (well I guess that is the point if I'm bringing it up :rolleyes:), but it's interesting how in LOTR there is a lot of power behind sworn words, oaths. Now we move into a world where a person's "promise" means very little (if anything at all) in a court of law. You need a signed contract, and now it's about trying to find loopholes to break a signed contract. They broke their obligations, and should pay up, whether it's to a multi-million dollar estate or not. ;) |
Technically the plaintiff in the suit is not the Tolkien Estate, but the Tolkien Trust, its charitable arm, which gives millions in philanthropy.
More to the point: even if the plaintiff were the Manson Family, if they have a contract it must be honored. Full stop. |
This may be of interest - Charity Commission page for the Tolkien Trust http://www.charity-commission.gov.uk...idiaryNumber=0
You can download their accounts for the year ending April 2008 & see what grants they've made - a total of £1,325,425. (Its in the 'About this Charity' box on the top left - just click 'View Accounts') You'll also notice this little statement Quote:
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If New Line is found negligent, can they not be required to pay the Trust's legal costs?
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look it depends on the wording, Nobody denies they get money what's unknown is from who.
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This could be trying to suck New Line completely dry, but just realize that New Line does not have a good track record at making payments. They failed to pay Jackson what they said they would, they failed to pay a group of LOTR actors, they failed to pay Zaentz, and now the Trust believes they didn't get paid what is owed to them. It's hard to make any good defense for New Line, other than admitting they didn't own up to a contract, considering their track record. Quote:
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Originally posted by Boromir88:
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The real point though, is that even if the Trust do succeed & get their costs awarded (by no means guaranteed, & even if they do what's left of New Line may claim they have no cash to pay it) they have still to spend money fighting the case which they could be donating to charities in real need. Or in other words a lot of real suffering by real human beings will have continued which wouldn't have continued if New Line hadn't been a bunch of 'creative accountants'. Not to mention what the Trust could have done over the last 8 years with the profits they should have got. |
Nope- in the US (unlike Britain) parties to a suit pay their own attorneys' fees, win or lose.
It is however very true that the Tolkien Trust is a fiduciary and as such has a legal obligation to recover monies owed to it. It's no longer a question of "sucking New Line dry," since New Line as a legal entity has ceased to exist, having been absorbed into Time Warner (which is thus now responsible for New Line's liabilities). |
Hate to say it, but as with all such matter Time Warner has nearly endless resources they'll simply wait out the estate until it gets sick and quits.
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However given the scandals close to home... surely there is a point where the accounting is so creative that it becomes a criminal rather than a civil matter? Surely the taxmen must be after their cut too? |
For those keeping up with the trial....
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