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Lord of the Rings Media Movies Entertainment

LoTR Lawsuit Threatens Hobbit Production 427

Posted by CmdrTaco
from the but-we-wantsss-it dept.
eyrieowl writes "J.R.R.'s heirs are suing for royalties on the LoTR films. Apparently they haven't gotten any money due to some creative accounting. Peter Jackson ought to understand...he had to sue the studio for much the same reason. As for The Hobbit? FTFA: 'Tolkien's family and a British charity they head, the Tolkien Trust, seek more than $220 million in compensation...[and]...the option to terminate further rights to the author's work.'"
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LoTR Lawsuit Threatens Hobbit Production

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  • by Tetsujin (103070) on Thursday July 16, 2009 @10:48AM (#28717733) Homepage Journal

    You know, if I were a Hobbit, I wouldn't let any lawsuit threaten my Hobbit-producing activities...

    • by mcrbids (148650) on Thursday July 16, 2009 @11:00AM (#28717925) Journal

      Unfortunately, you aren't a Hobbit, and this kind of stuff is so common it has it's own name and Wikipedia entry. Look up Hollywood Accounting [wikipedia.org]. It's pretty simple and extremely sleazy. Remember that profits are simply income minus expenses. If you make $100,000 but it costs you $40,000 in expenses, you have $60,000 in profits.

      Most movie earnings are reported in gross sales. Profits are slim, on purpose.

      Let's say you are a Hollywood producer.

      1) Make a deal with somebody to "share the profits" by using their idea.
      2) Produce the movie by hiring sub-contractor "companies" that happen to have you has the CEO. These "companies" are very expensive, and payed based on gross sales.
      3) Movie gets produced, makes record sales.
      4) The "companies" previously hired are payed based on the sales numbers, leaving no money left to call a "profit".
      5) ???
      6) Screwed partner makes nothing because there are no profits to share.

      • by Lumpy (12016)

        Has Stan-Lee even been paid for any of the spiderman movies?

        Last I knew they were pulling that age-old BS on him as well.

        never EVER take net points with a movie. gross points are the only ones of value as no movie EVER makes money due to hollywood accounting.

      • by Solandri (704621) on Thursday July 16, 2009 @11:46AM (#28718749)
        Kinda makes all their protestations about piracy ring hollow. How dare someone else screw them out of a profit.
      • by sjames (1099) on Thursday July 16, 2009 @11:59AM (#28718949) Homepage

        Brought to you by the same people who are so deeply concerned that someone might copy a movie without paying for it. Of course, the whole industry in Hollywood started out dodging Edison's patent royalties.

      • Re: (Score:3, Interesting)

        by Dragonslicer (991472)
        I think I can fill in ??? on this one. From the stories I've heard, expenses from completely different projects can get charged to your film, reducing the profit even farther.
        • Re: (Score:3, Informative)

          by nextekcarl (1402899)

          And this is apparently one of them:

          "The heirs also question expenses, according to Eskenazi, including an advance payment to an unnamed principal in the âoeLord of the Ringsâ films for an unrelated project, and a $1 million completion bond charged against gross receipts for each of the three films, even though a bond was issued only on âoeThe Fellowship of the Ring.â The studio also deducted a distribution fee for the home-video market, she said. "

        • Re: (Score:3, Informative)

          by billius (1188143)
          Indeed. To quote Babylon 5 creator J. Michael Straczynski, "Basically, by the terms of my contract, if a set on a WB movie burns down in Botswana, they can charge it against B5's profits." That's how you avoid paying someone who has made you $1 billion.
      • Re: (Score:3, Interesting)

        by Gutierrez (1599359)
        "Always ask for a piece of the gross, not the net. The net is fantasy.", Freakazoid to Bo-Ron, Next Time, Phone Ahead

        Saturday morning cartoons really were educational television.
    • by DarthVain (724186) on Thursday July 16, 2009 @11:14AM (#28718153)

      Leegola: What else can we slay? Is that a hobbit over there?
      Titanius Anglesmith: No, that's a hobo and a rabbit. But they're making a hobbit.

  • Damn leeches (Score:4, Insightful)

    by geekoid (135745) <dadinportland AT yahoo DOT com> on Thursday July 16, 2009 @10:50AM (#28717753) Homepage Journal

    These books should be public domain by now.
    God damn extended copyright might kill another production.

    Ob. quote:

      "Is that a Hobbit over there?"

    "No, it's a hobo and a rabbit, but they're making a hobbit."

    • Re:Damn leeches (Score:5, Interesting)

      by MindKata (957167) on Thursday July 16, 2009 @11:03AM (#28717993) Journal
      "extended copyright might kill another production"

      No, its the greedy, self serving, money grabbing, Narcissistic, control freaks who so often seek powerful jobs in big companies like Time Warner who are to blame (as usual). Their Narcissistic self interest at the expense of others forces people to finally take action against this kind of unfair treatment. They have tried for years to get some kind of fairness out of Time Warner.
    • While I despise Christopher Tolkien for shamelessly milking his dads work, I can't see how you'd blame him for suing when they didn't pay him a dime for the first three movies.

      They made a deal, and, as with Jackson, they tried to claim that they didn't make any cash so they didn't owe him anything. Give me a fricking break.

    • by mcgrew (92797) on Thursday July 16, 2009 @11:14AM (#28718149) Homepage Journal

      Agreed, it should have been in the public domain when I bought my copy of the trilogy in 1970.

      They're building one of those "Habitat Houses" down the street from me, and I wondered to my daughter if all the workers had tattoos of hobbits on them.

      "Why?" she asked.

      "Hobbit tat for humanity".

      Ok, I'll get my coat...

    • Re:Damn leeches (Score:5, Insightful)

      by Chris Burke (6130) on Thursday July 16, 2009 @11:25AM (#28718353) Homepage

      These books should be public domain by now.
      God damn extended copyright might kill another production.

      I agree the books should be in the public domain. But let's be honest here -- it's the usual movie production studio douchebaggery that is going to kill this production, not copyright. You know damn well they aren't thinking "Gee if only there were reasonable terms for copyright we wouldn't have to deal with the estate!" No, they are fully on board with life + infinite arithmetic progression copyright terms, they just want to twist the rules so they're the only ones who benefit. They've made their bed, and now they are trying to weasel their way out of sleeping in it.

      Well, fuck them I say. I'd rather everyone who was contractually owed money for those movies gets it even if in my ideal universe they wouldn't be owed anything, rather than let the fuckers responsible for the current situation get away with this shit.

    • Re: (Score:3, Insightful)

      by interkin3tic (1469267)

      These books should be public domain by now.
      God damn extended copyright might kill another production.

      In this case, I'd say it's not just copyright laws. Hollywood accounting [wikipedia.org] is in my eyes more clearly douchebaggery than using the broken copyright system. It might be absurd that the estate maintains a copyright what should be public domain, but it's even more absurd for New Line Cinema to claim the Lord of the Rings movies didn't make a boatload of money.

    • Re:Damn leeches (Score:4, Insightful)

      by Thuktun (221615) on Thursday July 16, 2009 @11:38AM (#28718603) Homepage Journal

      These books should be public domain by now.
      God damn extended copyright might kill another production.

      (before film is made) "Darned copyrights are keeping us from making a film!"
      (after the film is made) "People are violating our film's copyright and should be punished!"

    • Re:Damn leeches (Score:5, Insightful)

      by TeXMaster (593524) on Thursday July 16, 2009 @11:41AM (#28718677)

      These books should be public domain by now. God damn extended copyright might kill another production.

      The irony being that the movie companies are the big $$$ behind the ridiculous copyright extensions that are preventing them from not having to go through the JRR descendants to make movies.

      I guess the next copyright legislature will make book copyright shorter than music or movie copyright.

  • by jedidiah (1196) on Thursday July 16, 2009 @10:51AM (#28717773) Homepage

    ...on the one hand, the studios are greedy schmucks out to screw everyone all around.

    OTOH, the next of kin should not be in the picture here. These are works
    that should be in the public domain now for a variety of reasons. The
    worthless relatives should not have the ability to interfere with any of
    the greedy schmucks. The fact that a charity is involved is just a nice
    red herring to confuse things.

    Imagine if the Bard's estate could screw around with people like this.

    That's the direction we are headed.

    • by Tetsujin (103070) on Thursday July 16, 2009 @10:58AM (#28717883) Homepage Journal

      Imagine if the Bard's estate could screw around with people like this.

      Oh, man... the implications... I bet none of the Bard's Tale games would have ever been released!

    • by TitusC3v5 (608284)
      It should probably be noted that the studio in question is Time Warner Inc. I'm not sure why that piece of info wasn't in TFS.
    • by eldavojohn (898314) * <eldavojohn@nOsPam.gmail.com> on Thursday July 16, 2009 @11:10AM (#28718075) Journal

      ...on the one hand, the studios are greedy schmucks out to screw everyone all around.

      Remember that these "greedy schmucks" are the ones lobbying and influencing the law. You, I, the Slashdot community, we do not. But we are tax paying constituents. The only time we influence this is when we vote--and let's face it, it's not a voting issue.

      When Sonny Bono and Walt Disney effectively controlled the government into changing these laws, they were done selfishly. Nowhere were we represented. To say that Senator Bono acted with only his constituents in mind is a joke.

      So suddenly the double edged sword is coming back to cut one of the prime promoters today of these laws. Historically these term limits of enforceable copyright have only gotten longer. And their implications for the internet and digital media has been more than encumbering. I'm not saying these laws don't help the big companies and artists make more money. I'm only saying that it's getting to a ridiculous point. Time Warner/New Line Cinema might take it so hard from the Tolkien family that they realize their lost future profits 50 years from now is a small price to pay compared to all the material they could have in public domain to make movies and derivative works from.

      Lastly, was anyone ever wondering why there was no Lord of the Rings movies officially for so long? It's because the Tolkein family was just looking for someone to get screwed by. They probably saw through all the other scams.

      Hopefully this is a wake up call to those who have extended copyright for far too long. It will only start hurting themselves and actually inhibiting/endangering their profession.

  • Thought experiment (Score:5, Insightful)

    by DoofusOfDeath (636671) on Thursday July 16, 2009 @10:51AM (#28717775)

    This is going to sound wacky, but I really just want to think it through.

    What if we made the kind of fraud that's apparently exercised by music and movie studio accountants, punishable by death?

    How would that play out in society and culture?

    • Re: (Score:3, Interesting)

      by jedidiah (1196)

      It wouldn't work.

      A jury is not going to want to punish you unless you are "one of the little people".

      PR flacks will make sure that the white collar criminals maintain a well manicured reputation.

      Ultimately, the little guy will end up the one on the hook for the new draconian punishment. ...something sounds familiar here.

    • by Araneas (175181)
      Like preaching to the choir brother!
    • You don't have to make it "punishable by death," just flipping make it ILLEGAL! I'm so tired of hearing about a-hole musician managers like Klein ripping off artists and swindling them out of song rights, talent agents taking their pounds of flesh from artists and athletes, and trusted personal financial advisors diverting funds from their clients to their own coffers. Just make it clearly ILLEGAL. Draw strong outlines around what compensation these people are allowed to make while in the service of thei
      • Re: (Score:3, Insightful)

        by DoofusOfDeath (636671)

        You don't have to make it "punishable by death," just flipping make it ILLEGAL! I'm so tired of hearing about a-hole musician managers like Klein ripping off artists and swindling them out of song rights, talent agents taking their pounds of flesh from artists and athletes, and trusted personal financial advisors diverting funds from their clients to their own coffers. Just make it clearly ILLEGAL. Draw strong outlines around what compensation these people are allowed to make while in the service of their clients. Create template contracts that uninitiated people can use to protect themselves. As it stands, you need a lawyer and an accountant to make sure your lawyer and accountant aren't fucking you!

        I think we're talking about two different things. You're arguing about unfair contracts. What the article is talking about (I believe) is out-and-out fraud regarding how much money is earned for a given movie.

        • I think we're talking about two different things. You're arguing about unfair contracts. What the article is talking about (I believe) is out-and-out fraud regarding how much money is earned for a given movie.

          Not quite. This is essentially fraud on a moral level, but legally it's nothing more than an unfair contract. Look up Hollywood Accounting [wikipedia.org].

  • Looks like the deal was done maybe 40 years ago:

    Under the contract, New Line was to pay a percentage of all gross receipts, after deducting 2.6 times the production costs, plus advertising expenses in excess of a certain amount, according to Eskenazi. (from TFA)

    Nowadays it seems as though even the average slashdotter knows you take a portion of gross, because nothing involving MPAA or RIAA related-companies ever clears a 'net profit' (wink wink).

    It looks like Tolkien & co where less saavy 40 years ago, and essentially signed up to get screwed. I hope the movies were profitable enough that they can still clear some money for the family, but 2.6 times production costs of those movies is a hell of a lot, and 'advertising expenses in excess of a certain amount'- especially if that amount was a 1969 dollar amount, and not a percent-well, they could really end up with a contractually dictated 'nothing.'

    • by Foolicious (895952) on Thursday July 16, 2009 @11:21AM (#28718285)

      It looks like Tolkien & co where less saavy 40 years ago, and essentially signed up to get screwed.

      Less savvy or just not very forward thinking in terms of technology.

      [nerd-speak]

      Tolkien pretty much gave away the movie rights because he (and whom else ever in his camp) never thought you could even make a movie out the LOTR. Would you have wanted to see a film adaptation using early 1970's film technology? Not as fun to watch if the Balrog looks Godzilla and the Nazgûl like some kind of Medieval Mothras, not to mention Treebeard looking worse than he even did in the films, or primitive miniatures making the cities of Middle Earth look like something made of Lego(s).

      Technology may have been Saruman's downfall, but it allowed for a pretty cool set of movies.

      [/nerd-speak]

  • by Dan667 (564390) on Thursday July 16, 2009 @10:57AM (#28717865)
    The MPAA is fighting to make sure the artists and copyright holders get what they are owed? Did they forget or is it just a bunch of BS and you should not feel bad about piracy and ignore them?
    • by Attila Dimedici (1036002) on Thursday July 16, 2009 @11:07AM (#28718035)

      The MPAA is fighting to make sure the artists and copyright holders get what they are owed? Did they forget or is it just a bunch of BS and you should not feel bad about piracy and ignore them?

      When they say "artists" they mean their accountants.

    • by mcgrew (92797)

      The MPAA is fighting to make sure the artists and copyright holders get what they are owed?

      He's dead, Jim.

      To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;

      I don't see anywhere in there where the US constitution allows anyone but an author or inventor to be granted patent or copyright. How exactly does that twisted logic work, anyway? Is New Line Cinema British or something?

      Even Tolkien

  • by i.r.id10t (595143) on Thursday July 16, 2009 @11:00AM (#28717921)

    Dragon Magazine had a cartoon bit about this ... apparently they weren't even allowed to use the word "ring" anymore...

    "Hey, someone get the phone - its been circular metal band-ing off the hook!"

  • How in the fuck did these guys in any way contribute to the LOTR films, or even the whole mythos itself?

    • Re: (Score:3, Informative)

      by nebaz (453974)

      Christopher Tolkien published the Silmarillion, after JRRT's death, among several other books, including the History of Middle Earth. Sure, strictly speaking it was all JRRT source material, but there has been a wealth of information out there, produced by these guys.

    • Re:Then explain this (Score:5, Informative)

      by Tr3vin (1220548) on Thursday July 16, 2009 @11:24AM (#28718351)

      Uh, The Silmarillion and The Children of Hurin. There are tons of notes and papers the Tolkien kept while writing his stories. Many of these offer insight into the world of Middle Earth, and would not have been easily accessible if it wasn't for the work of his son. Christopher Tolkien has spent a great deal of time going through his father's work, assembling notes from various sources to try to provide a more detailed history of Middle Earth. While the heirs aren't responsible for the original tale, they have done there share of work to get the story behind the story out and available to the public. Without the background, creating a movie like LotR would be much more difficult. The entire mythos was not well documented within the confines of the books. There were a lot of details that don't fit nicely within story form that were important to the movie. One of the biggest examples is the Elvish language. Much of the language has been put together from his original notes, which have been assembled by Christopher over the years.

      This is definitely not a case were the children are sitting around trying to bum money off of their parent's work. I am very thankful for their contributions. Without their work, my knowledge of Tolkien would probably be limited to The Hobbit and The Lord of the Rings.

      • Re: (Score:3, Informative)

        by jd (1658)

        Christopher also did a fair bit of editing, cleaning-up and polishing, so he did actually have some creative input. I'd also include the audio tapes, which include an otherwise unknown piece of Elvish poetry being sung by JRRT, as contributing to our knowledge.

    • Re:Then explain this (Score:5, Informative)

      by jnaujok (804613) on Thursday July 16, 2009 @11:42AM (#28718683) Homepage Journal

      The contract was signed by J.R.R. Tolkien in 1969. Copyright doesn't even enter into the argument. New Line, Time Warner, and MGM are all bound by the original contract, signed by J.R.R. Tolkien. As the Inheritor of his estate, Chris Tokien has the right, along with the Tolkien Trust, to enforce the terms of the contract through civil action.

      I hate to make this sound angry, but it has nothing to do with Chris Tolkien, other than he's the one who inherited the money. J.R.R. Tolkien sold a product for a specific fee, partly up front, and partly to be paid later. The studio is now using fraudulent accounting techniques to avoid paying the "later" part. If J.R.R. Tolkien were still alive, he would be the one suing. Hes not, but the contract is still binding, so his estate is suing.

      Copyright doesn't even show up in this equation. Nor does whether his heirs added anything to the mythos (which he has through his clean up and publishing of all the remaining Tolkien works and notes.)

      This is just simple, every day, contract law.

      Disclaimer: IANAL, and this is my opinions, based on reading TFA.

  • by Spy Handler (822350) on Thursday July 16, 2009 @11:04AM (#28718007) Homepage Journal
    According to the studios, Spider-Man, Return of the Jedi and Forrest Gump all lost money [screencrave.com] and therefore no royalty on net income needs to be paid.

    These people are simply criminals, and deserve to be locked up as such. However Hollywood is famous for making large political contributions, and their boys are in power at the moment. (not that the "other" party did anything about it either)
    • Re: (Score:3, Informative)

      by swb (14022)

      I agree that its criminal, but anyone who deals with this knows that you MAKE SURE you negotiate for "above the line" or "pre-expense" percentages of gross, guaranteed $x of the initial gross BEFORE expenses and marketing, as well as pre-production "commitment" fees of about half of what you want to make on the entire project. The latter is most important as it says nothing can even begin production until you get paid.

      However it would be really funny to see a few people get charged with felonies for fraud

    • what i don't understand about all of this: how do the studios make any money whatsoever with accounting of that sort? how does this survive any kind of auditing process?

  • by shawnmchorse (442605) on Thursday July 16, 2009 @11:07AM (#28718037) Homepage

    If it weren't for the deal that J.R.R. made with Saul Zaentz way back when, we wouldn't have any of the Lord of the Rings movies in the first place. Nor the Lord of the Rings Online game (which I happen to play). Nor any number of other things that may have first turned people on to Tolkien, including the old pen and paper Middle Earth RPG system.

    Christopher Tolkien has had control over the rights to things like The Silmarillion, and is notoriously limited in what he'll allow people to do in relation to it. I'd hate to think of what would happen (or more to the point, not happen) if he were able to somehow get back control over The Hobbit and The Lord of the Rings also.

    • Re: (Score:3, Insightful)

      by wytcld (179112)

      The Silmarillion? And what do you propose to do with that?

      As for turning people on to Tolkien, everyone I know who reads sci-fi/fantasy read those books back when we were kids, before any of the derivative stuff was out. The books are sufficient and wonderful in themselves. And they had no trouble finding deeply-appreciative readers on their own strength.

      On the other hand, I'm sure the movies are fine. They were done at the right time, when cgi was finally good enough. Still, should I show my son the movies

  • Smeg off! (Score:2, Informative)

    by DarthVain (724186)

    The book is 72 years old. Smeg off you vultures!

    http://en.wikipedia.org/wiki/The_Hobbit [wikipedia.org]

  • LotR (Score:2, Offtopic)

    by AP31R0N (723649)

    "The" doesn't deserve capitalization any more than "of". You wouldn't capitalize the in the book title either. For abbreviations show all articles and prepositions as lower case. If you have an article or preposition at the beginning of the abbreviation, show it as lower case. Of Mice and Men would be oMaM.

    By showing articles in lower case you give a clue to the reader that the letter represents something small and structural, rather than a 'real' word. LoTR would suggest Lord of Token Rings.

    Side note:

  • Obligatory (Score:5, Funny)

    by hobbit (5915) on Thursday July 16, 2009 @11:30AM (#28718465)

    Rumors of my death have been greatly exaggerated.

  • LoTR was a great work by someone who really spent time and effort writing the book. Does he (or even his family) not deserve to reap the rewards of his efforts that we are all enjoying? Why does everyone think that just because you like it that somehow it's now no longer HIS but OURS. Communism?

    On a separate but related note.... if Hollywood studios came up with their OWN IDEAS instead of just using comics / books / other movies as a basis for new scripts, they WOULD NOT HAVE THESE PROBLEMS. Screenwriters need to start coming up with original ideas, not just remakes of movies from the 50s or childrens cartoons from the 80s.

  • by plopez (54068) on Thursday July 16, 2009 @12:40PM (#28719623) Journal

    Courtney Love, Joni Mitchell the list goes on.

    Prince changed his name to an unpronounceable symbol, a stroke of genius because the contract he was under said he could use his own name if he jumped ship. He became "the artist formerly known as Prince".

    Courtney Love got hosed and wrote about how a band with a platinum album could end up scraping by on whatever a record company threw them.
    http://archive.salon.com/tech/feature/2000/06/14/love/ [salon.com]

    Joni Mitchell got hosed, and put an article about it up on the web.
    (can't find the link)

    Michelle Shocked couldn't record an album for 10 years due to a bad contract.

    Beck accepted the lowest contract offer he got because it gave him the most control.

    It's not just the movie companies.

    Book publishers too. God help you if you accept an advance or or go on a book tour. The charge backs can be horrific. Don't ever let them buy you anything. They'll overcharge you for any and all services. the limo to the airport or the venue might seem nice, but they will charge you back for it.

    The opening night gala for the movie opening, book openings. Etc.

    The word "pimps" comes to mind.

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