New Line: Lord of the Lawsuit

Thu Jun 7, 2:02 PM

Fifteen New Zealand-based actors who appeared in various incarnations throughout the course of the Lord of the Rings trilogy have filed suit against New Line Cinema, claiming some creative accounting on the studio's behalf has ripped them off of their cut in an estimated $100 million in profits from movie merchandise.

According to the court papers, the actors signed contracts with New Line that would give them 5 percent of the net revenue from videogames, lunchboxes, mugs, clothing and other franchise-related swag.

Those sales generated an estimated $100 million for the studio and the actors, none of whom is a name-brand star in the States, have yet to collect nary a farthing, per the complaint filed May 30 in Los Angeles Superior Court by the actors' lawyer, Henry Gradstein.

Among the allegedly stiffed Middle Earthlings is Paul Norell, who portrayed the King of the Dead in the Lord of the Rings: Return of the King. Profits revolving around merchandise based on his character alone have raked in $22 million, according to the suit.

Gradstein claims New Line breached the group's contract by deducting large upfront fees from the net profits that the actors would always be screwed.

With Norell, for example, whose character generated more revenue than the rest of the Orcs and other Tolkein types, once New Line's accountants deduct the massive fees from the profits, it "will always result in no net merchandising revenue being payable to Norell."

"There is no place in the contract that says New Line has the right to subtract a 50 percent distribution fee," Gradstein said. "As New Line calculates the numbers, it will never reach the break-even point with my clients."

"The expenses will always be approximately 104 percent…it's Hollywood."

In addition to Norell, the plaintiffs include Noel Appleby, Jed Brophy, Mark Ferguson, Ray Henwood, Bruce Hopkins, William Johnson, Nathaniel Lees, Sarah McLeod, Ian Mune, Craig Parker, Robert Pollock, Martyn Sanderson, Peter Tait and Stephen Ure.

New Line does not comment on pending litigation. Which means the studio reps have been issuing more than their share of "no comments" since the trilogy wrapped.

In 2005, producer Saul Zaentz filed suit against New Line, alleging he was owed more than $20 million in unpaid royalties from the franchise. The studio eventually settled with him out of court, and the terms of their deal was never disclosed.

Peter Jackson, whose Oscar-winning writing, directing and producing work on the Lord of the Rings franchise made it the most successful trilogy ever, grossing more than $2.9 billion, is also suing over his share of the profits. He claims he was shortchanged on revenue from DVD sales.

Jackson's dispute with New Line has, so far at least, kept him from directing the planned prequel to the trilogy, an adaptation of J.R.R. Tolkein's The Hobbit.