Jackson won't helm 'Hobbit'

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Much to the distress of his fans, Peter Jackson has announced that he is no longer planning to direct "The Hobbit," a prequel to his mega-successful "Lord of the Rings" trilogy, because of an ongoing accounting and legal dispute with New Line Cinema.

In a highly unusual move, revealing some of the behind-the-scenes moves in a high-stakes negotiation, Jackson spoke directly to his fan base during the weekend, posting his explanation of recent events on TheOneRing.net. The statement from both Jackson and his wife and fellow producer, Fran Walsh, concluded: "This outcome is not what we anticipated or wanted, but neither do we see any positive value in bitterness or rancor. We now have no choice but to let the idea of a film of 'The Hobbit' go and move forward with other projects."

The lawsuit that resulted in the current impasse originally was filed by Jackson's production company, Wingnut Films, in early 2005. It alleged that the studio gave affiliates favorable licensing deals and failed to properly calculate revenue from the DVD sales of 2001's "The Lord of the Rings: The Fellowship of the Ring."

As Jackson explained it to his fans, he did not want to discuss directing "Hobbit" with New Line until the legal/accounting issues were settled. New Line produced the three "Rings" movies, which have grossed $2.9 billion worldwide and won 17 Oscars, including best picture for 2003's "The Return of the King."

In recent weeks, talk of the "Hobbit" project has reignited. While New Line holds an option on the film rights to the 1937 novel by J.R.R. Tolkien, MGM holds distribution rights. Only last week, MGM chairman and CEO Harry Sloan, speaking at the European Media Leaders Summit in London, said that he was talking with Jackson about making "Hobbit" and another prequel to "Rings."

According to Jackson, New Line co-chairman Michael Lynne had told Ken Kamins, Jackson's manager, that New Line would settle the lawsuit if Jackson would commit to directing "Hobbit."

But, Jackson explained, "We have also said that we do not want to tie settlement of the lawsuit to making a film of 'The Hobbit.' " He added, "In our minds, this is not the right reason to make a film, and if a film of 'The Hobbit' went ahead on that basis, it would be doomed. Deciding to make a movie should come from the heart -- it's not a matter of business convenience. When you agree to make a film, you're taking on a massive commitment, and you need to be driven by an absolute passion to want to get the story onscreen. It's that passion, and passion alone, that gives the movie its imagination and heart. To us it is not a cold-blooded business decision."

According to the director's Internet posting, events came to a head Friday when New Line executive Mark Ordesky called Kamins and said New Line no longer required the filmmakers' services for "Hobbit" or a second prequel to the "Rings" trilogy. Because New Line had a limited-time offer on the rights, which it had obtained from producer Saul Zaentz, it planned to find another director. (Zaentz was traveling in Europe and was unavailable for comment.)

So Jackson took the story straight to his fans.

New Line declined comment on Jackson's version of the events, and it is unclear whether the studio has begun to approach other directors.

In the opinion of one source close to the negotiations, New Line was trying to "play on Jackson's heart strings and get him to settle for a low number" in the lawsuit because it knew how much he wanted to return to Middle-Earth and "The Hobbit."

For their part, New Line chiefs Robert Shaye and Lynne also have reasons to want to mount a new Tolkien movie. The studio enjoyed three boom years while it was releasing the three "Rings" movies, but it hit a boxoffice drought this year.

New Line may hold rights to the property, but Jackson still has leverage of his own. If another director attempted to take on "Hobbit," he would first have to face the fury of Jackson's loyal fans. Ian McKellen, who plays Gandalf in the "Rings" trilogy, and Andy Serkis, the real-life reference point for Gollum, also could refuse to work for another director out of loyalty to Jackson. At the moment, McKellen is said to be waiting to see how the matter is resolved before making any commitment to the projects. And Jackson's Weta Digital, the FX house that expended considerable R&D on the computer-graphic character Gollum, would be unlikely to turn its code over to New Line, just as Pixar Animation held on to the "Toy Story" code when the Walt Disney Co. was talking about producing "Toy Story" sequels.

For its part, MGM remains optimistic. Said spokesman Jeff Pryor, "We still believe this matter of Peter Jackson directing 'The Hobbit' is far from closed."

While "Hobbit's" fate remains undecided, Jackson and Walsh are writing their indie adaptation of Alice Sebold's 2002 novel "The Lovely Bones," which is slated to start shooting in fall 2007.
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