[Sauron the White]

This from Entertainment weekly.com - The Hollywood Insider may be the best account released so far today

'The Hobbit' is a go with Peter Jackson
Dec 18, 2007, 08:11 PM | by Nicole Sperling

Categories: Movie Biz, The Hobbit

It's back to Middle Earth for Peter Jackson, Fran Walsh, and the boys from New Line. Finally, the years of disputes have ended, and the partners (including co-producer and co-distributor MGM) are gearing up for two new Hobbit movies. EW investigated, talking to the parties behind the negotiations to uncover how everything got resolved, and to get an idea of what viewers can expect of these adaptations of J.R.R. Tolkien's original literary masterpiece. Here's the lowdown:

Jackson and his life/creative partner Walsh have always envisioned the big-screen adaptation of The Hobbit as two movies. The first would deal with the 80-year old novel. The second, imagined entirely by Jackson and Walsh, would link the conclusion of The Hobbit to the start of the first Lord of the Rings book, The Fellowship of the Rings. New Line and Jackson will develop the properties over the next year with hopes of entering into pre-production by 2009 for a 2010 and 2011 release. No writers, including Jackson, Walsh, and their longtime partner Philippa Boyens, have been commissioned. (None can be, because of the strike.)

New Line has already decided that both films will be produced at the same time, in similar fashion to how the LOTR trilogy was put together, and no budgets have been assigned the films yet. According to New Line's co-chair Robert Shaye, "You can't budget an idea."

While MGM and New Line want to keep Jackson's involvement in the film as broad as possible, hinting that he may take up both writing and directing responsibilities, Jackson's manager Ken Kamins told Hollywood Insider that Jackson won't be directing the films. "Peter won't be directing because he felt the fans have waited long enough for The Hobbit. It will take the better part of every day of the next four years to writer, direct and produce two Hobbit films. Given his current obligations to both The Lovely Bones and Tintin, waiting for Peter, Fran, and Phillippa to write, direct and produce The Hobbit would require the fans wait even longer."

Directors Sam Raimi (Spider-Man), Guillermo del Toro (Pan's Labyrinth), and Alfonso Cuaron (Children of Men) are still the names that come up as alternate possiblities, but no official creative decision has been made. "There is obviously a small but significant number of directors who could handle two films of this magnitude, but we have no commitment to anybody," Shaye said. "Now that Peter is an integral part of the decision-making process, we all have to see eye-to-eye on any candidate we try to enlist."

Those creative pow-wows are set to begin in early 2008 when New Line plans to sit down with Jackson to hash out critical details. (Jackson will be filming Lovely Bones through February.)

Neither Jackson’s rep nor New Line will explain how the nasty battle between the two parties got resolved. The fight hit a low point in November 2006 when New Line actually "fired" Jackson from The Hobbit and Jackson took the battle to his website, TheOneRing.net, telling fans that “New Line would no longer be requiring our services on The Hobbit.” New Line’s Shaye now calls it, “a misunderstanding that wound up becoming a mini-war.” The two parties began negotiating this June, but it seems MGM’s Harry Sloan served a significant role as a mediator between the two sides.

According to New Line's co-chair Michael Lynne, "Harry served in a mediating function and at a certain sensitive moment he was very helpful." The New Line co-chairs do attest that once Sloan got involved, the studio was already well down the path of negotiating with Jackson. But Jackson's rep Kamins adds, "Harry, acting in the appropriate self-interest for MGM, used the fact that he owned a piece of the rights to be helpful to both sides in this converstaion. I really credit Harry greatly."

Shaye and company regret how acrimonious things became with Jackson. (In January, Shaye told Sci-Fi Wire website, "I don't care about Peter Jackson anymore. He thinks we owe him something after we've paid him over a quarter of a billion dollars!")

"From my side, I just regret that it happened," said Shaye. "It was a total misunderstanding about what anybody had to gain or lose. I'm extremely glad that the bad blood was just a little infection and not really a disabling malady."

New Line is quick to point out that The Hobbit resolution is in no way a reaction to disappointing domestic box office numbers for their most recent release, The Golden Compass, which they had hoped would launch a new franchise. "Absolutely not," said Lynne. "This has been in the works for a while now. Golden Compass, by the way, overseas, is performing spectacularly. Obviously, we have been disappointed with its performance here, but I think overall it will do quite well."

Regardless of Compass' performance, the studio now has a new, sure-fire hit to get underway. And even though the lawsuits are settled and the fences are mended, there are still numerous hurdles between this announcement and fans sitting in the theater watching Bilbo Baggins help 13 dwarves reclaim their treasure. First, there is the nasty writer's strike that trudges on; and second, a visionary writer/director/producer with a lot of other projects on his plate. Surely, though this triumph deserves a little celebration. Will Jackson be planning a bender back in New Zealand?

According to Kamins, not even close. "I haven't even talked to Peter," he said, laughing. "He just got home from Pennsylvania, (where Lovely Bones is filming) last night."

-- Additional writing and reporting by Missy Schwartz and Vanessa Juarez