Monday, 11 February 2008

Hollywood Babble On & On... #48: New Line New Lawsuit

Robert Shaye, the out going CEO of New Line Cinema is the gift that keeps on giving when you're like me and crank about how poorly run Hollywood is.

Now the company is being sued by the family and estate of Lord of the Rings author J.R.R. Tolkien over not getting a promised 7.5% cut of the trilogy's gross revenues. You can read about it HERE and HERE.

Now some say that Tolkien's estate has no claim to the trilogy over a deal that the late author made to sell the movie rights to cover a nasty tax bill. Now I'm not a lawyer, and I ain't got much of the book learning, but I do reckon that there's some sort legal quirk giving that estate some piece of the action.

Or, there could be other reason for it. New Line may have promised a
piece of the gross in exchange for the family's cooperation in the promotion of the LOTR trilogy.

It's a not unreasonable concept since New Line's parent company's experience during the making of Interview with a V
ampire. If you recall, the author Anne Rice at first condemned the film, but after some meetings with Warner Bros. changed her tune and praised the film.

Now the Vampire film was considered successful financially, if not creatively, but I suspect that they felt if could have done even better at the box office, if Anne Rice was a happy camper right from the beginning.

Either way the estate is claiming somewhere in the neighbourhood of $150,000,000. And thanks to the revived sales of Tolkien books, and the partnership with publisher Harper Collins, the estate have the deep pockets to put up a serious fight.

New Line is in financial trouble, thanks to releasing
more bombs since the last LOTR film than the US Air Force and their plan to revive their fortunes with The Hobbit, could be kiboshed by the estate.

And the cherry on top of this sundae is that New Line refuses to allow outside auditors to look at their books pertaining to the gross revenues of the LOTR trilogy.

Like I said Bob Shaye's tendencies to alienate and anger the people that make his fortune is the gift that keeps on giving. His actions illustrate one of the key problems with Hollywood.

A complete lack of transparency when it comes to money.

Hollywood used to be about making movies that make money. Now it's seems to be all about making movies to facilitate the hiding of money.

Running an entire industry like an elaborate pyramid scheme is not a sensible business plan, and it's the self-fulfilling idiocy that is ruining the movie business. The opaque accounting, and the constant financial screwing is causing people, as soon as they have any clout, start demanding massive up-front salaries, and big chunks of the grosses that whittle down profit margins to almost nothing.

Thus production costs go up, profit margins narrow, and in an effort to justify the skyrocketing costs, creativity is suppressed. The lack of creativity turns off a lot of moviegoers, ticket sales decrease, and profits go down even more.

If the industry wants to save itself in the face of competition from the Internet, video games, and other new media they have to simplify, make the accounting more transparent, and do everything they can to cut costs, and more importantly, reconnect with the audience.

Alienation and anger should not be the philosophy of an industry founded on entertainment.

It's just common sense.

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