No One Knows How Much Peter Jackson's New 'Hobbit' Film Will Cost

2012-27 REP DEALS Peter Jackson Fran Walsh

 Jackson and Walsh.

The new entry into a surprising trilogy gets a green light -- even with a mystery budget.

This story first appeared in the Aug. 8 issue of The Hollywood Reporter magazine.

The original deal to make two Hobbit movies was undoubtedly one of the most complicated in Hollywood history, with an array of players including Warner Bros., New Line, MGM and other rights holders. Warners chairman and CEO Barry Meyer is said to have told associates that never in his 40-plus years in the business had there been more meetings in pursuit of a project.

So, clearly, organizing a third Hobbit film in a matter of weeks was not going to be simple. Still, once director Peter Jackson and collaborators Fran Walsh and Philippa Boyens decided that three movies was the preferred approach, the deal announced July 30 came together fast.

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"If anybody had been a big hindrance, it wouldn't have happened," says a source with ties to the movies. "It was such a short window of time to make this decision, if anybody had said no, it would have been two movies."

Previously, the budget for the two movies was estimated, probably conservatively, at $500 million. A source says the production cost of the third could run between half and two-thirds as much as one of the other two films thanks to work that's already been done. (Marketing No. 3 will add to the total.) But the final cost is not yet known because the studio is awaiting a full script for the third movie.

Jackson, Walsh and Boyens pitched the idea for a trilogy to executive producer Alan Horn and New Line's Toby Emmerich and Carolyn Blackwood in early July. Then Jackson returned to shooting a few weeks of pickups on the first film, The Hobbit: An Unexpected Journey, set for release Dec. 14, and left the dealmaking to the execs. "I'm sure it's been the biggest nightmare in the world for them to try to actually work it all through," he tells THR. Sources say deals for the cast to return were done before Jackson announced the as-yet-untitled third film on Facebook.

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Jackson says shooting of "essentially every page of script" of the first two Hobbit films is completed. Cast and crew always were set to return to Jackson's facilities in Wellington, New Zealand, in June to finish "a few pickups to complete some battle stuff." That now will be extended to a few more weeks of additional shooting.

"There's some areas of the story to develop and expand," Jackson says. The second movie, The Hobbit: There and Back Again, is set for December 2013, and the third film will be slotted into summer 2014.

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New Line president Emmerich says the trilogy decision was not an obvious one. "Everyone involved had to make a grand leap of faith," he says. "As cynics have pointed out, The Hobbit is not an exceptionally long book, but Peter has phenomenal creative integrity and truly believes this is the best way to tell the story. We all had to trust each other, and Peter, and we sincerely believe it will be great."