Spare a copper guv....?

[TheOrcWithNoName]

Originally Posted by davem

Looks like poor old MGM may need to find a Dragon hoard ......



and as we all know from New Line's disastrous experience with the LotR movies there's simply no profit in Tolkien movies.......

Could some kind soul elaborate on this one please? I rather naively assumed the LOTR movies had made NL a shedload of money. Or were the NL bean counters being a little creative with their final bottomline figures for the films, if only to get PJ off their back claiming that he wanted a bigger slice of the profits pie?

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

[William Cloud Hicklin]

I rather naively assumed the LOTR movies had made NL a shedload of money. Or were the NL bean counters being a little creative with their final bottomline figures for the films, if only to get PJ off their back claiming that he wanted a bigger slice of the profits pie?

You got it! PJ had to sue and eventually settled for an undisclosed sum- but then the Tolkien Estate, which is owed 7% of the gross- gross, mind you- has sued New Line because they haven't received one red cent.

http://www.variety.com/article/VR111...goryid=13&cs=1

[Kent2010]

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.

[TheOrcWithNoName]

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!

[davem]

http://www.laweekly.com/2009-05-21/n...llywood-style/

Now investment bankers Moelis & Co. have been hired to advise the studio on a potential restructuring and to explore options for optimizing its capital structure (i.e., talking to lenders about altering MGM’s long-term debt obligations). “You lower your interest payments, you free up cash to make more movies,” a source tells me. “With debt selling at a discount [50 cents on the dollar], every company is doing the same.”

I hope this new plan of attack can help. Because it’s vital to Hollywood that this buyer survive. Everyone knows that Mary Parent has been holding the studio together with the equivalent of chicken wire: specifically by partnering with studios left and right because they are willing to front the costs of each production. Things aren’t much better on the TV side. And if the auditors declare MGM technically insolvent, all hell breaks loose.

Honestly, I don't know if this could cause problems with the Hobbit movies - if MGM are unable to go ahead then doesn't Zaentz get the rights back?- & I would assume a bidding war among the studios follows - which may stop the current production altogether, & that throws out everybody's plans.

[Mithalwen]

Originally Posted by TheOrcWithNoName

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.

Bear in mind there is just the one accountancy joke:

What is 2+2?

What do YOU want it to be?

[Morsul the Dark]

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.

[Boromir88]

Creative accounting is everywhere, especially "Non-Profits" just give the "not profit" money to some as a bonus voila profit gone.~Morsul

True

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.

True as well...but here comes the but (there's always a but )

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 ), 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.

[Mithalwen]

Originally Posted by Morsul the Dark

, movie studios make movies so they need funds more dearly than the estate.
.

Not sure that their need is greater than the many medical, humanitarian and educational charities that the Trust gives to. I don't see why the trust should effectively subsidise the film industry which is what they will be doing if they give up and go home - which seemingly isn't an option anyway.

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?