Yesterday TheOneRing.net linked to a story on stuff.co.nz written by Gordon Campbell, a veteran news and media analyst, called “On the making of The Hobbit.” It’s perhaps the most extensive attempt to sum up the current situation in terms of the MGM situation and the ramifications of Peter Jackson’s potential assuming of the director’s hat. For those who have not been following every little twist and turn of the drama for the past few months, it’s a good way to catch up.
It’s an excellent article, but let me make a few small corrections and clarifications.
First, Campbell writes that MGM’s current choice is “to sell out to Time Warner who made the highest bid in an auction in March, or soldier on and try to run the studio themselves with re-financing and hired help …” As I understand it, the recent Lionsgate meeting with MGM was to put forward a proposal for a merger. That’s how the Los Angeles Times reported it. If that were to go through, Lionsgate would not be “hired help” but a partner within the same overall company.
Second, Campbell says that MGM’s assets include “the next James Bond film.” Actually MGM owns the Bond franchise, which is considerably more valuable.
Third, he points out that the Wall Street Journal sees Spyglass as the leading contender to take over the running of a restructured MGM. That may well be the case. The Lionsgate meeting, however, involved what I believe was the first formal proposal put forward since the bidding process was closed months ago. That might seem to make Lionsgate the leading contender du jour. Yet, as Campbell points out, the merger would require the approval of Lionsgate’s main shareholder, Carl Icahn, who seems dead set against the idea. So it’s definitely complicated.
Fourth, Campbell also points up the tangle of players who have or have had some share in the Hobbit rights. This is basically accurate, but it might give the impression that Saul Zaentz and Harvey Weinstein would have the same sorts of rights as other parties like Warner Bros. and MGM. There’s a notable difference. What Saul Zaentz bought back in 1976 was the production and distribution rights to The Lord of the Rings and the production rights to The Hobbit. Had he but paid that extra fee and bought the Hobbit distribution rights as well, we would not be in this current situation. What he then sold Harvey Weinstein (i.e., the Miramax company) in 1997 was the same thing: LOTR production and distribution, Hobbit production. MGM retained the Hobbit distribution rights and does to this day. [July 16: Clarification. As Voronwë the Faithful has pointed out to me over on the TORN Message Boards, what Zaentz sold Miramax and Miramax then sold New Line was a limited-term control over those rights, subject to various conditions. Zaentz is still the underlying owner of the rights. As I said, it’s complicated.]
So Saul Zaentz and Harvey Weinstein will be owed some money, though less than the other players. Disney might well get some as well, since Disney owned Miramax at the time when Zaentz sold it the various rights described above. (Still does, though the company may change hands any moment.) Michael Eisner unwisely shared the 5% of gross minus costs that New Line had to pay to get the rights from Miramax: Disney got 2.5%, the Weinstein brothers 2.5%. I suspect that’s how the deal will work this time, too, but maybe not.
Finally, it’s Lionsgate, not Lion’s Gate.
Campbell gives some interesting speculations on how The Hobbit would fit into Peter’s career if he chooses to direct it. Whether or not he turns out to be right, it’s interesting to get a Kiwi perspective on the situation.