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New "Lord Of The Rings" Lawsuit Hits Warner's New Line

Elijah Wood
Elijah Wood

"The Lord of the Rings" trilogy was a huge franchise for Time Warner's New Line Cinema--bringing in about $3 billion at the worldwide box office alone. Now, J.R.R. Tolkien's estate, a British Charity Called the Tolkien Trust, is suing New Line for its alleged failure to pay a percent of gross profit of the three films based on Tolkien's books.

The plaintiffs are seeking $150 million-plus in compensation, from the trilogy, which they say has brought in a combined $6 billion in ticket and DVD sales. The suit also demands punitive damages, as well as a court order terminating the rights the studio has to Tolkien's other works, namely, "The Hobbit."

New Line is planning to adapt "The Hobbit" into two films. Both executive produced by Peter Jackson, co-produced and co-financed with MGM, which would handle overseas, and New Line handling U.S. distribution. The first of which is meant to go into production next year, for a 2010 release. And with the same winning team that spun "Lord of the Rings" into box office gold (and gold in every other possible spin off--video games, consumer products etc), "Hobbit" is also expected to be a huge franchise.

New Line must have thought it had wrapped up its legal troubles. Jackson, who directed the three "Lord of the Rings" films sued new line over a profit dispute--the case settled in December (no details but it was reportedly settled for $40 million). And film producer Saul Zaentz has sued twice, over money he said was owed to him. Zaentz owns the worldwide film, stage, and merchandise rights to "The Lord of the Rings" and "The Hobbit."

Feel like you just read or heard something about New Line? Well, you did. Last week, when Time Warner reported its quarterly earnings, new CEO Jeff Bewkes singled out the division as providing a significant opportunity for cost cutting because of its redundancy with the separate Warner Brothers studio Time Warner also owns.

Not a good week or so for New Line.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.