New Line falters in Jackson court battle
New Line has just been dealt a blow in the ongoing court case with Peter Jackson regarding revenues that the Director claims not to have received which were rightfully his.
In a court ruling last week a U.S. Magistrate ordered New Line to pay US $125,000 over their failure to provide documents related to the film's revenue stream for the ongoing court case between Peter Jackson and New Line over the Lord of the Rings profits. They have also been told to hire a document retrieval specialist within three weeks.
Although the amount is small, the ruling is pretty significant in the case, and it reveals that the issue isn't just between Jackson and New Line.
The story from Variety tells us that the sides are much bigger in the wrangling over studio accounting for profits and the payouts to artists on the residuals system – where talent is only paid once costs have been repaid.
On one side, that of New Line and the studios, is the Alliance of Motion Picture & Television Producers (AMPTP) who represent the studios and networks, and on the other is the Writers Guild of America (WGA) who obviously represent the Writers in Hollywood.
The WGA have suggested a major rework of the current residuals system which is currently running at four decades old. They say that the current accounting system within Hollywood is unreliable, specifically in profit deals such as this current case. They claim that films such as Chicago and and television shows like The Simpsons are examples of projects that have managed to stay in deficit on paper thanks to accounting practices, and have therefore managed to hold back on profit payouts.
The AMPTP, of course, deny this and say that the current accounting methods are causing the losses. They say that their members can no longer operate under this structure where rapidly rising costs are pushing down their ability to recoup costs, and that the reporting requirements nowadays are extremely transparent.
So you see the battle isn't just between Peter Jackson and New Line, this is something much bigger in Hollywood, and something that they are all going to have to find a resolution to sooner rather than later. With the WGA contract expiring October 31st and their meetings with the AMPTP not set to resume until October the 1st, it's fair to say the deadline is drawing near.
What's interesting here is that the Magistrate in the Jackson-New Line case seems to have highlighted a serious gap in the reporting of accounts and profits from the studio, pointing to the possibility that Jackson and the WGA are, indeed, quite right in their claims.