By Ryan Parsons | Image property of respective holders, Variety
Back in early 2008 the Tolkien Estate announced that New Line had failed to pay any of the millions of dollars in royalties the studio owed for the distribution of The Lord of the Rings trilogy. This claim soon became a lawsuit and, like Peter Jackson, the Tolkien estate figured New Line was doing too much creative accounting. With the trial set to begin October 19th, both parties were urgently negotiating a settlement, which they have finally come to.
Estate of J.R.R. Tolkien Lawsuit Against New Line Cinema Settled
First off - The good news is that The Hobbit can now enter production without delay. The settlement released The Hobbit franchise to New Line, who plan on getting Guillermo del Toro behind the camera early next year with two installments coming 2011 and 2012. While we can only guess what number New Line settled at to get the Tolkein Estate off their back, it was said that the studio owed 7.5% of gross receipts from all three films. Considering that The Lord of the Rings did just about $3 billion worldwide, with revenue also coming from other venues, it was estimated that New Line was in the hole about $220 million to members of the trust. How much had they paid so far? Well, according to the trust, none at all.
So legal action was most definitely necessary, and both parties are glad to have it resolved. As mentioned, the fans of Tolkien have reason to be happy too.
"The trustees regret that legal action was necessary, but are glad that this dispute has been settled on satisfactory terms that will allow the Tolkien Trust properly to pursue its charitable objectives," said Christopher Tolkien, son of the author, in a statement. "The trustees acknowledge that New Line may now proceed with its proposed films of The Hobbit."