'The Hobbit' Casting and Lawsuit

New Line has once again put itself in a corner regarding the "Lord of the Rings" trilogy and the descendants of J.R.R. Tolkien. The accountants for the studio must be slacking off because it hasn't just been them that they havn't been paying.

Peter Jackson himself sued New Line in 2005 for under-paying him on "The Fellowship of The Ring." In 2007, Jackson settled for an undisclosed amount. Saul Zaentz, a producer who once owned film rights to the "LOTR" story also sued New Line over his share of the receipts and settled in 2005 for $168 million.

Here are the key facts of the new lawsuit problems regarding the heirs of the "LOTR" property:

- In 1969 J.R.R. Tolkien sold the film rights to his work to United Artists for $250,000 and 7.5% of the gross after a studio recoups their expense. The Tolkien Heirs and their charity group The Tolkien Trust also insist that the original contract let Tolkien revoke the rights to additional films in the event of a breach of contract.

- MGM bought out United Artists, absorbing the rights and keeping international distribution rights on the film while selling production rights to New Line, who hired Peter Jackson, etc.

- "The Lord Of The Rings" films gross an estimated $6 billion dollars (to date). New Line gets sucked up into Warner Bros. The Tolkien Heirs know that after the studio re-couped 2.6x their production budget, the estate is entitled to 7.5%.

- Time Warner doesn't pay out, so the Tolkien estate sues for $220 million dollars. The studio says the original contract is vague, so they're only going to hand over 20% of home video sales (because home video wasn't invented when the original contract was made) instead of the 100% the Tolkiens are seeking. Studio lawyers also say that for some lawyer-ish reason, the Tolkiens are only entitled to 2.5%, not 7.5% of revenues from The Two Towers and The Return Of The King.

- The Tolkiens are pissed, settlement talks go south and the suit will go in front of a jury in October of this year in the Los Angeles Superior Court.

Here's the main point: Time Warner thinks that with some "Hollywood accounting" and a few pithy legal fees, they can avoid paying out $220 million dollars.

The Tolkiens, on the other hand, are pissed. So pissed, in fact, that if the original contract is upheld, they will halt the production and/or release of Guillermo Del Toro's two "Hobbit" films by pulling the rights all-together.

Warners obviously doesn't want that to happen, because they are looking at a pay day estimated around $4 billion if those two films are made.

Interestingly enough, if the Tolkiens do win and pull the rights from Warners, they would be free to sell those rights under a more modern contract. And get this: You know who owns the publishing rights to Tolkiens work?

NewsCorp. 20th Century Fox already has a way in to move on this franchise if it gets pulled from Warner Bros.

"Should the case go all the way to trial, we are confident that New Line will lose its rights to The Hobbit," said Bonnie Eskenazi, the lawyer working for the author's son, Christopher, and the family's charity, the Tolkien Trust.
In less serious news, Peter Jackson spoke with Empire about the rumors of casting for Bilbo Baggins coming next week.

"No, we won't be announcing Bilbo for a little while," Jackson said. "We're starting to think about casting, but we're knee-deep in the script right now… We're powering ahead with getting the first draft done."

So "The Hobbit" might not get made, but if it does,don't expect to hear who plays Bilbo Baggins any time soon.

More news to come! Catch ya' later!
Sources: Latino Review, First Showing, Empire, Guardian