Wow. I am starting to wonder what happened in the accounting books.
Posted by Avatar300 (Member # 5108) on :
They probably tried to make a movie so bad it would flop, allowing them to keep all the investments, which for which they had promised 1,000 percent of the profits.
Posted by erosomniac (Member # 6834) on :
That is awfully classy - too bad he's such a shoddy filmmaker .
Posted by FlyingCow (Member # 2150) on :
There's more info on Ain't it Cool News as well.
Posted by Kwea (Member # 2199) on :
Classy guy.
Posted by Lisa (Member # 8384) on :
quote:Originally posted by Avatar300: They probably tried to make a movie so bad it would flop, allowing them to keep all the investments, which for which they had promised 1,000 percent of the profits.
That would make a cool plot for a movie.
Posted by ClaudiaTherese (Member # 923) on :
Agreed on the classy.
Posted by aspectre (Member # 2222) on :
Jackson is being stubborn to his own detriment. Any admission of greater profits on LotR means a LOT more in taxes owed for LotR and HUGE penalties for late payment. What Jackson says he is owed would be only a minor part of the new taxes&penalties that the IRS will claim if NewLine concedes that there were more profits to share with Jackson.
Perfectly legal business accounting. Companies often keep two separate sets of books: one for internal use to reflect the real profitability of ownership; and the other to to maximize that real profit by minimizing the tax bite.
If Jackson were interested in money more than being self-righteous, the studio would have structured the profit participation in the proposed film in such a way that Jackson would have made his fair share from the Hobbitplus enough to cover what Jackson thinks he is owed from LotR.
The studio would likely even have been willing to take a probable minimal profit or no profit* position on the Hobbit to ensure Jackson's greater profit in order to keep from losing money from LotR profits to the taxman. And considering King Kong, the studio would be biting the bullet to take that risk.
* As far as the IRS is concerned.
Posted by Marlozhan (Member # 2422) on :
Isn't the Saul Zaentz company supposed to get rights back for the Hobbit movie this year?
At any rate, comparing the quotes of Jackson and Shaye, I wouldn't take Shaye's word. I'm not wed to the idea of Jackson directing the next movie, though I would be disappointed if he didn't. However, if New Line is being as shady as they appear, I fear what they might do with a Hobbit movie without Jackson. Maybe they'll do a good job, but they better be able to get the rest of the cast (at least those that are in the Hobbit book) onboard. If they can't due to this whole mess, Shaye should swallow his pride and let Jackson direct (though I don't see this ever getting worked out between those two now).
Posted by katharina (Member # 827) on :
aspectre, I find that version of events to be highly, highly improbable.
I find it much more likely that the books will reveal more money owed by New Line.
Posted by FlyingCow (Member # 2150) on :
Regardless, it is a stipulation in the contract that Wingnut can ask for an audit of the books. Based on a partial audit, Wingut feels as though there were inconsistencies. New Line has since closed its books.
New Line is scared, and I believe rightfully so. Apparently, this also happened with the film Coming to America, at which time it was found Paramount owed *a lot* of money to a lot of people.
To me, New Line's stance in this is shady. If they have nothing to hide, open the books. If they're cooking the books for tax reasons, that's their problem.
Posted by aspectre (Member # 2222) on :
Depends on how ya interpret the books. There are cross-charges that are legal via IRS rulings in the tax-accounting set that will be structured differently in the stockholder set.
Jackson is making a couple of major mistakes inregard to standard Hollywood business etiquette/practice: First you make killer profit for the studio. Then the studio pays you back on your next projects, even if they have to take a loss-according-to-the-IRS on the deals. And you don't open up a studio's books to a profit reassessment by the IRS.
Posted by katharina (Member # 827) on :
So, you're saying Jackson broke the unspoken code of Hollywood?
Good for him. I wish him the best. I think he's a good and independent enough filmmaker that he's better off not bound by omerta.
Posted by FlyingCow (Member # 2150) on :
I think it's the "etiquette" that he's objecting to.
From what I read a couple months ago, New Line was perfectly happy to bundle the settlement of this FotR business with a new contract for the Hobbit movies.
PJ told them that he wanted to keep the two things separate - and that a desire to sweep a legal/accounting issue under the carpet was not a good reason to make a movie. He further said that until he could be confident that they were on the same page with regard to accounting, he did not want to become contractually tied to them.
New Line replied that they wanted to make the movie ASAP (as their rights to it are set to expire), and would push on without him. He said "best of luck" and continued with the lawsuit.
Subsequently, Saul Zaentz said that when the rigths revert to him, PJ would absolutely be directing - that it was not New Line's decision at that point.
Later, Shaye comes out and says that they owe PJ nothing and that he's made plenty of money, and he will absolutely never be directing for New Line again.
It really seems that New Line is being the "heavy" here, and that Wingnut films is legitimately trying to clarify the books as per their contract.
PJ's comment was that New Line looks at the accounting one way, and Wingnut looks at it another - and it's the role of an outside arbitrator to say who's right. Shaye's comment seems to be "we're right, you're wrong, you'll never work here again, and we'll be damned if anyone looks at our super-secret books".
I wonder if they got accounting supplies cheap at an Enron garage sale?
Posted by Nighthawk (Member # 4176) on :
quote:Originally posted by Lisa:
quote:Originally posted by Avatar300: They probably tried to make a movie so bad it would flop, allowing them to keep all the investments, which for which they had promised 1,000 percent of the profits.
That would make a cool plot for a movie.
...and a Broadway show, for that matter.
Posted by aspectre (Member # 2222) on :
Nah, Jackson is breaking the unspoken code of humans: Thou shalt not help the taxman to collect more than the minimum legal payment.
It ain't even omerta. The IRS is quite aware of the existence of double bookkeeping; that such practice is the norm of all but the smallest businesses. Legal etiquette requires that the IRS pretends that it doesn't. Kinda like overhearing your neighbors having sex: politeness dictates that you keep the knowlege to yourself.
Posted by katharina (Member # 827) on :
I find everything you are saying highly suspect.
Posted by BlackBlade (Member # 8376) on :
quote:Originally posted by Nighthawk:
quote:Originally posted by Lisa:
quote:Originally posted by Avatar300: They probably tried to make a movie so bad it would flop, allowing them to keep all the investments, which for which they had promised 1,000 percent of the profits.
That would make a cool plot for a movie.
...and a Broadway show, for that matter.
I almost made this comment [singing voice] SPRING TIME FOR HITLER AND GERMANY! [/singing voice]
Flying Cow's synopsis of the events seems spot on IMO. New Line really does not seem to have the moral low ground on this whole schtick and PJ has not capitulated to numerous cop out strategies New Line has devised.
I hope New Line comes out the loser in this scenario, they seem to have forgotten how much money LOTR made THEM. I really hope another production company picks up The Hobbit and runs with it to Peter Jackson. If there was a movie horse to bet on, The Hobbit is a really good bet.
Posted by erosomniac (Member # 6834) on :
quote:Originally posted by katharina: I find everything you are saying highly suspect.
You should, as it's a crock.
Posted by Lyrhawn (Member # 7039) on :
Don't forget the role MGM might play in choosing a director for The Hobbit. Regardless of where the rights to make the movie are, with New Line or Saul, MGM has the distribution rights, which gives them a card to play, especially considering the two sides have been at an impasse since at least the end of LOTR being filmed.
If MGM pushes for PJ and New Line says no, then we're mired until the rights revert to Zaentz, where MGM will get what they want. MGM execs have said that PJ will absolutely be the director, New Line says absolutely not, Zaentz says wait a few months and then absolutely yes. PJ is being non-commital and basically says anything is possible.
Every new little bit of information changes the situation a little bit, but it looks like things are at an impasse with New Line being such crybabies about the whole thing. New Line should go into mediation with PJ like he wants. It's non-binding, and it might end up being cheap. PJ even said it could be a hundred dollars, it could be $100 million, he just wants it to be fair. And I don't sympathize with the whiny New Line exec who said PJ got a quarter billion dollars out of it. PJ earned them more than TWO BILLION dollars, so PJ should get what is fair, and anything less, no matter how much it might be, is pointless.
Posted by Dan_raven (Member # 3383) on :
Newline: "OK Mr. Jackson, you made both of us a lot of money."
Jackson: "THanks. Can I have all of it you promised me?"
Newline: "Well, no. I think we'll keep it. But I'll tell you what, I'll let you make us both more Money on this next project."
Jackson: "But if you cheated me out of this money, what is to stop you from cheating me out of my money from the next project?"
Newline: Well, Nothing really. Don't you trust us?.
Jackson: No.
Newline: Then do it or you'll never work here ever again.
Jackson: Let me get this straight. You refuse to pay me what you promised. I can either work for you again, which you consider something I'd want to do, and risk you not upholding your contract, or you threaten me that I'll never work for you again, so I will never have to work for someone who lies and cheats. Hmmm. Tough choice.
Posted by Tstorm (Member # 1871) on :
Dan, that's a pretty good plain English translation of the whole situation, as I see it.
(glossing over the details, but getting the point across...)
Posted by Phanto (Member # 5897) on :
Yes, that rule is god.
Thou shalt not help the taxman to collect more than the minimum legal payment.
Posted by FlyingCow (Member # 2150) on :
If New Line hadn't had inconsistencies in accounting practices that sent up red flags at Wingnut, there would be no reason to open the books to give the IRS an extra look-see.
New Line brought this on themselves, and are coming off on the short end of the stick in the PR war.
![[Frown]](frown.gif)
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![[Wink]](wink.gif)
[singing voice] SPRING TIME FOR HITLER AND GERMANY! [/singing voice]