'Hobbit' Producers Slapped With $75M Suit for Splitting Film

By Aditi Mukherji, JD on December 13, 2013 | Last updated on March 21, 2019

Miramax and the Weinstein brothers are drawing their legal swords in a $75 million lawsuit against New Line Cinema and Warner Bros, in a contract dispute over "The Hobbit" movies. The lawsuit centers on Warner Bros. and New Line executives' decision to split "The Hobbit" into a trilogy.

Sadly, the lawsuit isn't about drawing out the epic tale into a criminally boring pace. It is, as always, about money.

LOTR Movie Deal Rights

Harvey and Robert Weinstein claim they sold New Line the rights to J.R.R. Tolkien's four-book saga, "The Hobbit" and "The Lord of the Rings" trilogy in 1988, reports the Courthouse News Service.

The Weinsteins allegedly spent over $10 million developing the film adaptation of Tolkien's works when New Line acquired the film rights. In exchange for the film rights, New Line promised to pay the Weinsteins, among other things, five percent of the gross receipts of the first movie based on the books.

Receiving five percent of gross receipts is a form of contingent compensation and is commonplace in entertainment contracts. In such deals, a participant in a film receives a percentage of the revenues made by the film in addition to, or in the place of, their fixed payment, according to Creative Skills Set.

The problem here is that the agreement specifically excluded such contingent compensation for "remakes."

"Trilogy" a Remake?

Warner and New Line decided to split "The Hobbit" into three parts after they bought the rights from the Weinsteins. The question now is whether the "The Hobbit" being split into a trilogy counts as a remake.

Making a breach of contract claim, the Weinsteins say they're getting cheated out of their five percent contingent compensation for the second and third installments of "The Hobbit." But Warner allegedly claims the second and third installments of "The Hobbit" are not the "first motion picture" based on "The Hobbit" and are therefore effectively remakes, which are not covered by the parties' agreement, according to the lawsuit.

If parts two and three are not considered remakes, then Weinsteins get the contingent compensation; if they are, the brothers lose. According to the Weinsteins, calling parts two and three of a new movie "remakes" is an "absurd position." So dramatic.

An interesting side note: The Weinsteins are represented by David Boies and Motty Shulman of Boies, Schiller & Flexner. That's the same super-litigator David Boies who argued against Prop. 8 before the U.S. Supreme Court.

This too shall pass.

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