p2pnet - rss feed: New Line Cinema — RIP
p2pnet news | Movies:- It’s pink-slip time at ‘former mini-major’ studio New Line Cinema of Lord of the Rings fame.
Some 450 employees in New York and Los Angeles are to be fired, leaving only about 40-50 “staffers” to keep the company, “retooled as a genre-oriented label within Warner Bros. as part of a Time Warner cost-cutting effort,” afloat, says the Hollywood Reporter, going on:
“Another 40 New Line employees are being offered positions elsewhere within Warner Bros.”
Time Warner CEO Jeff Bewkes announced in February the company was, “folding New Line into Warner Bros. as part of a move designed to save $50 million annually, with New Line to make six to eight pics per year,” says Variety.
Cumulative worldwide gross receipts of the LoR trilogy amounted to nearly $6 billion, said the JRR Tolkien estate, suing the studio.
The “revamped” New Line will have a small development and production team along with marketing, publicity and business affairs execs, says the Hollywood Reporter
And No, its owner, Time Warner, the isn’t blaming file sharers.
Yet.
Last year, 15 actors from the LoR trilogy are sued New Line for breach of contract, claiming they were still owed a percentage of the estimated $100 million US in profits from sales of movie merchandise, said the Associated Press at the time, going on:
“The New Zealand actors were supposed to split five per cent of the revenue after expenses from sales of caps, video games, mugs and other merchandise, says the lawsuit filed May 30 in Los Angeles County Superior Court. The suit contends New Line breached the contract by taking distribution and gross participation fees to which it wasn’t entitled.”
The fees weren’t in the contract and, “ate up all the profits owed to the actors, their lawyer, Henry Gradstein, was quoted as saying, adding:
“The expenses will always be approximately 104 per cent. It’s Hollywood accounting.”
Trustees of the Tolkien Trust, a British charity, also sued New Line, “for its failure to pay a contractually required gross profit participation in the three films based on the world-famous Lord of the Rings trilogy”.
JRR T olkien estate trustees and HarperCollins Publishers are co-plaintiffs, said a statement, going on:
“The Lord of the Rings films produced by New Line are among the most financially successful films ever created by Hollywood and were released in 2001, 2002 and 2003 respectively.”
Notwithstanding the, “overwhelming financial success of the films, and the fact that the plaintiffs have a gross participation in each of the films, New Line has failed to pay the plaintiffs any portion of the gross profit participation at all,” said the estate.
Economic “downturn” anyone?
Hollywood Reporter - 450 jobs cut at New Line, April 14, 2008
Variety - Time Warner drops ax on New Line, April 14, 2008
Associated Press - 15 actors sue New Line Cinema for Lord of the Rings profits, June 7, 2007
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April 15th, 2008 at 7:16 am
Hmmm……WB….wanna save money……STOP paying these no talent…..STARS….so much frickin money……Gotta say they just ain’t the big bucks…..!!
April 16th, 2008 at 2:04 am
It seems rather strange you target the actors rather than the studio who have failed to keep to their contractual obligations, its always hard to decide if a comments poster is an idiot or an industry troll attempting to off-topic the story.
Interesting story Jon, although I suspect just one of many hollywood accounting practices that are more than dubious.
April 16th, 2008 at 9:46 am
“In accountancy, Hollywood accounting is the practice of distributing the profit earned by a large project to corporate entities which, though technically distinct from the one responsible for the project itself, are typically owned by the same people. This has the net result of reducing the project’s reported profit by a substantial margin, sometimes eliminating it altogether. This may be for income tax reasons, but more often it is to reduce the amount which the corporation must pay in royalties or other profit-sharing agreements.”
Source: http://en.wikipedia.org/wiki/Hollywood_accounting
’nuff said!
September 26th, 2008 at 12:32 am
Just compensation must be made in any service a company availed from professionals. I believe both parties sign an agreement before the movie was started. Have not they resolved the issue on profit-sharing or compensation before they enter into a contract? I have no idea how they deal with these things in Hollywood..but I think this matter won’t occur if things were talked about clearly at the start.