This might have been mentioned in another thread someplace (one of the other PJ-Hobbit threads) but I couldn't find it, so here's the blurb I found perusing a magazine today.
Newsweek, December 4th, 2006, p. 75
"Breaking the Hobbit"
It should've been a slam dunk. Peter Jackson, mastermind of the "Lord of the Rings" franchise, was all set to reteam with studio partner New Line on a film version of J.R.R. Tolkien's "Rings" prequel, "The Hobbit". Then a funny thing happened: New Line fired him. No one's using that word, natch, but in a letter posted on the fan site theonering.net, Jackson claims that the studio told him it "would no longer be requiring our services on 'The Hobbit' ". (New Line declined to comment; Jackson could not be reached.) Why the breakup? Fallout from Jackson's decision to audit New Line's accounting on "Rings". The studio wanted him to settle the matter before handing him "The Hobbit". He refused; that was that. It'll be tough to fill Jackson's shoes. For one thing, he doesn't wear any.
--Devin Gordon
And here's some OFFICIAL news on it from theonering.net. Elijah Wood and Ian McKellen tossed in their opinions, too.
http://www.mymovies.net/news/news_li...=5975&sec=news
Any thoughts or feelings? (complaints? huzzahs?) I'm not sure yet if I'm glad for Gloin the dwarf-tossed, or sad for Bilbo the Ring-Finder.