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The One Ring Forums: Tolkien Topics: Movie Discussion: The Hobbit:
The TRUTH about New Line's Tolkien film rights

Voronwë_the_Faithful
Valinor

Jul 8 2009, 4:53pm

Post #1 of 16 (850 views)
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The TRUTH about New Line's Tolkien film rights Can't Post

As some of you are aware, Darkstone and I have a long-standing friendly argument (NEB will probably post a link or links Wink) about the question of whether, as he has asserted, New Line's rights included the specific right to make one or more "original prequels," or whether, as I have claimed, New Line's rights allow them to make any films allowed by the original 1969 agreements in which Tolkien granted the film rights to United Artists (which would include the ability to make one or more original prequels among other options), limited only by the time limits provided in the licence/option agreement. It has been a fun and spirited discussion, but we both recognized that the only way that we would be able to determine what the truth really was would be if we could see the rest of the agreements that led to New Line's obtaining rights to make the films, particularly Saul Zaentz's licence agreement with Miramax, which was then assigned to New Line.

Well, I'm happy to report that in conjunction with the motion for summary adjudication that New Line has filed (see my post in the Main forum), they have filed a declaration that attached the whole series of agreements resulting in the complicated division of rights. And I am even happier to report that these documents show conclusively that I was correct all along.

The original agreements between Zaentz and UA are very complicated, and they include a settlement agreement of a lawsuit over the film One Flew Over the Cuckoo's Nest among other things, but the bottom line is that they resulted in Zaentz having all of the rights granted in the original 1969 agreements, except for the distribution rights to all films, which later was limited to just films based on The Hobbit, which passed to MGM as UA's successor. But we knew all of that, essentially.

The interesting thing is the agreement between Zaentz and Miramax. Here's how that agreement is structured. It grants a license to Miramax to make a single film based on LOTR and/or a single film based on The Hobbit. However, once they make one film based on either, they automatically get the right to an option to make a second film, within a certain period of time. And once them make that one, they automatically get the right to an option to make a third one. And so on. The agreement states:


Quote

MFC shall have a succession of options and licenses which it may continue to purchase and exercise without limit so long as it continues to produce and release motion pictures in accordance herewith on the basis of one or both licensed Tolkien works



The agreement further provides that these subsequent motion pictures "may be a sequel, a prequel or a remake, so long as it is a feature motion picture made for initial theatrical release."

Thus, the agreement with Miramax granted them time-limited options to make any films based on Tolkien's works allowable by the 1969 agreements, so long as they were feature films made for initial theatrical release. These rights would revert to Zaentz at the point that Miramax failed to exercise its option to make a subsequent film. In addition, Zaentz retained the rights to make stage productions, direct to video or television productions, and most merchandising rights including theme parks.

Miramax then assigned all of its rights to New Line by a quitclaim agreement.

There is not, and never has been, any agreement granting a specific right to make one or more "original prequels". The series of agreements grant New Line the right make as many films based in any way as they like on LOTR and The Hobbit (so long as they don't use material the rights to which have not been sold), so long as they exercise their options to do so within the time limits specified. The lesson here is, don't believe everything you read in the media, or even in emails written by your favorite director.

'But very bright were the stars upon the margin of the world, when at times the clouds about the West were drawn aside.'

www.arda-reconstructed.com

(This post was edited by Voronwë_the_Faithful on Jul 8 2009, 4:59pm)


entmaiden
Forum Admin / Moderator


Jul 8 2009, 5:22pm

Post #2 of 16 (440 views)
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Not sure that makes sense [In reply to] Can't Post

If Miramax only had the rights to make one LOTR film, but had the option for subsequent films only after the first is made, how could New Line make three films at one time? How could the Weinstein brothers contemplate two LOTR films?

Each cloak was fastened about the neck with a brooch like a green leaf veined with silver.

`Are these magic cloaks? ' asked Pippin, looking at them with wonder.

`I do not know what you mean by that,' answered the leader of the Elves.



NARF since 1974.
Balin Bows


Voronwë_the_Faithful
Valinor

Jul 8 2009, 5:35pm

Post #3 of 16 (424 views)
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Because once they made one, they automatically had the right to make the next one [In reply to] Can't Post

Legal agreements often seem like they don't make sense, when they really do. So long as Miramax (and then New Line as their successor) kept making films within the seven years of the last film (and thus generating royalties for Zaentz) they could continue to make more films. So New Line was able to make the three films together, because they knew they would have the right to make each of them, since each of them were made within seven years of the last one.

'But very bright were the stars upon the margin of the world, when at times the clouds about the West were drawn aside.'

www.arda-reconstructed.com


N.E. Brigand
Half-elven


Jul 8 2009, 5:37pm

Post #4 of 16 (431 views)
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Obligatory link. [In reply to] Can't Post

Thanks! You and Darkstone debated the likely nature of the agreement most recently in this thread; it includes links back to the original discussion. By the end of the later discussion, I wasn't really sure if the two of you disagreed at all, except about a further hypothetical: will New Line make a cheap bridge film after The Hobbit is done? And the new information doesn't resolve that question. What are the time limits: when The Hobbit films are complete, how much time is left on the clock for the producers to begin a subsequent film? Is "initial theatrical release" defined? Can the producers release a film to just one theater in an obscure town for a day or a week, then put it on DVD?

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We're discussing The Hobbit in the Reading Room, Mar. 23 - Aug. 9. Everyone is welcome!

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How to find old Reading Room discussions.


entmaiden
Forum Admin / Moderator


Jul 8 2009, 6:03pm

Post #5 of 16 (424 views)
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Consecutive vs. Concurrent [In reply to] Can't Post

Here's the wording of the agreement that you posted:


Quote

MFC shall have a succession of options and licenses which it may continue to purchase and exercise without limit so long as it continues to produce and release motion pictures in accordance herewith on the basis of one or both licensed Tolkien works



However, once they make one film based on either, they automatically get the right to an option to make a second film,



Emphasis mine in both cases.

My reading is that the options only become available and exercisable after the first movie. There is no option until that point. There's nothing to indicate that the movies can be made simultaneously and released consecutively.and it looks like the terms have to be stretched to fit that scenario. Seems that it would be a HUGE risk to commit the money to three films based on this language, whether or not the options are automatic. There was talk that New Line had plans to send the second and third films straight to DVD if the first one bombed. That would violate the terms of the agreement, it appears, since the agreement says the movies must be "a feature motion picture made for initial theatrical release".

Each cloak was fastened about the neck with a brooch like a green leaf veined with silver.

`Are these magic cloaks? ' asked Pippin, looking at them with wonder.

`I do not know what you mean by that,' answered the leader of the Elves.



NARF since 1974.
Balin Bows


Voronwë_the_Faithful
Valinor

Jul 8 2009, 6:26pm

Post #6 of 16 (434 views)
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Because the options were automatic, there was no risk [In reply to] Can't Post

Or at least no risk beyond the usual risk of making films that may or may not succeed. Certainly New Line took a chance at making the three films concurrently so that they could be realized consecutively, but that chance did not include any risk that they would not have the right to release the second and third films.

As for their being talk of the second and third films going to straight to DVD, that's exactly what that was: talk. Internet chatter that had no basis in reality. It was never going to happen. New Line might not have known how successful FOTR was going to be, but they knew it wasn't going to be such a flop that it would justify releasing the other two.

In any event, regardless of your reading, that is what the language does say, and they did make the three films based on that agreement.

'But very bright were the stars upon the margin of the world, when at times the clouds about the West were drawn aside.'

www.arda-reconstructed.com


Voronwë_the_Faithful
Valinor

Jul 8 2009, 6:38pm

Post #7 of 16 (415 views)
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My understanding [In reply to] Can't Post


In Reply To
Thanks! You and Darkstone debated the likely nature of the agreement most recently in this thread; it includes links back to the original discussion. By the end of the later discussion, I wasn't really sure if the two of you disagreed at all

Really the basis of our disagreement was whether there was ever a specific agreement granting rights to make one or more "original prequel(s)." He kept insisting that there was, and I kept insisting that there wasn't. In the end, it doesn't really matter that much, since what the agreements do provide for would allow for an "original prequel" (among other things), as I have said all along.

In Reply To
What are the time limits: when The Hobbit films are complete, how much time is left on the clock for the producers to begin a subsequent film?

If my understanding is correct, they would have up to seven years from the release of the second Hobbit film to begin production on another film, be it a prequel, sequel, remake, or some other type of film based in some way on one of the two works, or some combination therein. Otherwise the rights revert back to Zaentz. As to the question of whether they will make such a film, be it a bridge film, or something else, obviously I don't know. I hope not, but the call of the almighty dollar is strong.

In Reply To
Is "initial theatrical release" defined? Can the producers release a film to just one theater in an obscure town for a day or a week, then put it on DVD?

That I'm not sure about. I don't have the agreements in front of me right now, and even if I did, I'm no sure how easy it would to find the answer. I would guess that "initital theatrical release" would require a broader release that that, but I don't know for sure.

'But very bright were the stars upon the margin of the world, when at times the clouds about the West were drawn aside.'

www.arda-reconstructed.com


entmaiden
Forum Admin / Moderator


Jul 8 2009, 7:00pm

Post #8 of 16 (416 views)
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The DVD option [In reply to] Can't Post

wasn't internet chatter - I learned about it from one of the extras that was put on the DVD releases. I'd have to check them again to see who it was.

Each cloak was fastened about the neck with a brooch like a green leaf veined with silver.

`Are these magic cloaks? ' asked Pippin, looking at them with wonder.

`I do not know what you mean by that,' answered the leader of the Elves.



NARF since 1974.
Balin Bows


Voronwë_the_Faithful
Valinor

Jul 8 2009, 7:57pm

Post #9 of 16 (394 views)
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I'd be interested in hearing who said it [In reply to] Can't Post

Since, as you yourself pointed out, it appears that New Line did not have the right to do that. I suppose it is possible that they could have tried to have entered into a separate agreement with Zaentz to do it, if it had come to that, but it hardly seems like it would have been cost effective to do that.

'But very bright were the stars upon the margin of the world, when at times the clouds about the West were drawn aside.'

www.arda-reconstructed.com


Stuffe
The Shire

Jul 8 2009, 8:26pm

Post #10 of 16 (366 views)
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Semantics [In reply to] Can't Post

I think we have lost ourselves with talk of "Making a film" - does filming scenes make a film? The wording from the first post mentions "so long as it continues to produce and release motion pictures" - so I think that performing the scriptwriting, creating the sets and costumes, casting and filming does not count as production and release. Once FOTR was safely in cinemas they could safely begin the final production of the next film, including pickups, special effects, editing and finally the release of TTT, and so on.

I think anyone can film whatever they want, when they want - they just may not ever be allowed to release it unless they have the required agreements, and these agreements seem to automatically be available once the previous film hits the public.


(This post was edited by Stuffe on Jul 8 2009, 8:29pm)


Stuffe
The Shire

Jul 8 2009, 8:36pm

Post #11 of 16 (383 views)
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More semantics ;) [In reply to] Can't Post

>> If my understanding is correct, they would have up to seven years from the release of the second Hobbit film to begin production on another film, be it a prequel, sequel, remake, or some other type of film based in some way on one of the two works, or some combination therein. Otherwise the rights revert back to Zaentz.

I think it's more likely that it's 7 years to release a further film. Otherwise they could pay 1 man to slowly paint a single set for 10 years and still argue that as it's currently in production, they retain the rights. Remember the exact wording as provided in the OP is "so long as it continues to produce and release motion pictures" (my emphasis)

Hello, by the way :) I'm off to get my Robert Foster book to pick a new name that isn;t already taken... ;)


Voronwë_the_Faithful
Valinor

Jul 8 2009, 9:14pm

Post #12 of 16 (370 views)
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That would make sense, except ... [In reply to] Can't Post

... if that were the rule, than they would have to release the first Hobbit film by December of 2010, which they obviously don't have to do. I'll have to look at the agreement and see if I can determine exactly what it says about this.

Welcome to TORN. By this or any other name, I'm sure you will be a valuable addition to the discussions.

'But very bright were the stars upon the margin of the world, when at times the clouds about the West were drawn aside.'

www.arda-reconstructed.com


weathertop
Rohan


Jul 9 2009, 6:16pm

Post #13 of 16 (326 views)
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two different pieces [In reply to] Can't Post

of timing. LOTR gets one. Hobbit gets the other. so LOTR has 7 years from ROTK to release another one (does an release of extended edition to theaters count?). Hobbit will have 7 yrs from part II release to get any followup Hobbit story out.

or at least thats how i interepreted it.


Voronwë_the_Faithful
Valinor

Jul 9 2009, 6:28pm

Post #14 of 16 (304 views)
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You may be right [In reply to] Can't Post

I haven't looked at the agreement again, but I think that is basically correct.

However ... a bridge film could be considered either a sequel to The Hobbit, or a prequel to LOTR. So they should be able to get away with doing something like that within seven years of the second Hobbit film, even so.

'But very bright were the stars upon the margin of the world, when at times the clouds about the West were drawn aside.'

www.arda-reconstructed.com


Elizabeth
Half-elven


Jul 9 2009, 11:15pm

Post #15 of 16 (350 views)
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So, the 26-hr TV miniseries [In reply to] Can't Post

...of LotR which many of us have fantasized, with Bombadil, Scouring, and every little thing, would have to be licensed directly from Zaentz, having nothing to do with the film rights, correct?





The Rohirrim, by Peter Xavier Price

Elizabeth is the TORnsib formerly known as 'erather'


Voronwë_the_Faithful
Valinor

Jul 9 2009, 11:31pm

Post #16 of 16 (387 views)
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So far as I understand, yes // [In reply to] Can't Post

 

'But very bright were the stars upon the margin of the world, when at times the clouds about the West were drawn aside.'

www.arda-reconstructed.com

 
 

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