Or no Hobbits at all...

[William Cloud Hicklin]

OK, I've seen the Complaint.

Couple of interesting points:

1) JRRT's original 1969 contract with UA awarded him 7.5% of *gross* revenues (not profits, StW), after such revenues exceeded 2.6 times production costs, and after certain specified cost deductions. The $6B figure alleges $3B boxoffice and $3B video, TV and merchandising etc.

2) the $150M figure is a minimum, as in "At least $150M and probably a whole lot more;" the actual sum isn't known because New Line won't let the plaintiffs see the books. (The contract entitled JRRT to *monthly* financial reports!)

3) The plaintiffs are only seeking a court declaration that they have the *right* to terminate the Hobbit licence, not necessarily actually to terminate it (the Complaint alleges that the original contract gave JRRT the right to void it in the event of nonperformance).

4) There isn't complete detail on the creative accounting techniques, but some of those specified look familiar: especially New Line allegedly contracting services to its own subsidiaries at obscenely inflated rates. Another dodge, if New Line did it as alleged, is dead meat: subtracting out Zaentz', Miramax' and Jackson's cuts and trying to claim that what's left is 'gross.'



Given that NLC has already been sanctioned for concealing and destroying documents in the Peter Jackson suit, I expect Shaye & co are in for some very, very rough litigation. Basic Fact No. 1- these movies have generated billions of dollars, yet according to NLC 7.5% of billions somehow = zero. They don't dare let a California jury get hold of that.

Frankly they would be smart to consider selling the Hobbit rights to somebody else right now, since I don't see any way NLC or Warners could possibly proceed with it while this is pending.