Tolkien Trust v. New Line Cinema Corp.J.R.R. Tolkien’s Trust Sues New Line Cinema
Over 'Lord of the Rings' Profits
February 11, 2008
The trust that manages the estate of J.R.R. Tolkein’s “Lord of the Rings” trilogy and intellectual property sued New Line Cinema, the Hollywood studio that obtained the rights to produce films based upon his works.
The trust slams New Line, alleging that it’s been “engag[ing] in the infamous practice of ‘Hollywood accounting’ by using various ‘bookkeeping’ devices to delay paying Tolkien’s trust.
The suit claims that:
“The three hugely successful films based on J.R.R. Tolkien’s beloved “Lord of the Rings” trilogy have grossed nearly $6 billion. Despite these record-setting revenues (amounts derived ultimately from Professor Tolkien’s classic fantasy novels....[New Line] has paid nothing to Tolkien’s successors with respect to their contractually-mandated participation in the gross revenues of the films.
The trustees claim that they haven’t been the only financial victims of this scenario, disclosing that director Peter Jackson’s production company also sued New Line over the studio’s alleged “failure to properly account and pay to Jackson his appropriate profit participation in the films.”
According to the lawsuit, a series of agreements made in1969 granted United Artists the right to make films based on Tolkien’s works in exchange for paying the Trusts’s predecessors-in-interest “a total of 7.5% of the ‘Gross Receipts’ from any films based upon” Tolkien’s works, “after a contractually-defined ‘Artificial Payment Level’ [wa]s reached.” New Line subsequently acquired those rights.
The suit seeks more than $150 million in damages from New Line for breach of contract; the right to terminate the studio’s rights to make more films based on Tolkien’s works, reformation of the original 1969 contract; punitive damages, an accounting, and related relief.