DiveTwin over at TheOneRing.net alerts us to a story on the New Zealand news site Stuff.co. In it Peter Jackson mainly talks about making a film about the New Zealand military’s participation in the World War I battle at Gallipolli. There are a few mentions of The Hobbit, though:

He is also confident that there should soon be certainty about whether he would direct The Hobbit movie, which would allow him to map out a five-year plan for projects “that will keep many people very busy”.

[…]

A decision was still to be made on whether he would direct The Hobbit, which is in limbo while problems are resolved with Warner Bros and MGM, which is heavily in debt and up for sale.

But he said yesterday that Warner Bros was “making progress untangling the MGM situation, so we should have certainty with The Hobbit sometime soon”.

There’s not really any news here, and “sometime soon” isn’t very specific. Still, it’s good to hear from Peter, however, briefly.

Variety is reporting that the proposal for Spyglass to take over the management of MGM is moving forward:

A proposal to put Spyglass toppers’ Gary Barber and Roger Birnbaum in charge of MGM pushed ahead Wednesday as their plan for restoring the Lion’s roar was presented to all of the studio’s debtors during a conference call.

Barber and Birnbaum have been holding discussions with MGM’s leading creditors, which include Anchorage Advisors and Highland Capital. Wednesday’s conference call looped in more than 100 creditors, who must endorse the plan.

Those knowledgeable with the talks say Birnbaum and Barber would take over after MGM goes through a pre-packaged bankruptcy. The creditors would absolve much of the studio’s $4 billion in debt and take a majority equity stake in the company, along with providing a certain amount of working capital.

A major component of the plan would likely include shuttering MGM’s distribution operation, which would reduce overhead substantially. Instead, Birnbaum and Barber would strike a theatrical distribution deal with another major.

A leading candidate is Paramount, with whom the duo have formed a close relationship, partnering on the rebooted “Star Trek” franchise, “G.I. Joe: Rise of the Cobra” and “Dinner for Schmucks,” according to insiders.(Daily Variety, Aug. 13).

MGM also would move aggressively into television.

Over on the Message Boards at TheOneRing.net, Kangi Ska points us to a story on the Kiwi news site Stuff.co. (Thanks for that, K. S.!) It has some interesting rumors, reassurances, and updates:

It is understood there is increased speculation among insiders – bound by confidentiality – that the film will go ahead, with Jackson at the helm.

A source said yesterday that at least one CGI (computer-generated imagery) expert, who also worked on The Lord of the Rings, had arrived in Wellington to work on The Hobbit. The film was “on the go in terms of sets and pre-work they are doing … Peter will direct it.”

But Jackson’s spokesman, Matt Dravitzki, said there was no substance to claims that The Hobbit production had been stepped up. Staff numbers had gone up “marginally” but often fluctuated.

Work had been going on at the Hobbiton set, near Matamata, for a year. It was the only set that had been given the green light for construction, because of the amount of time involved in it.

Earlier this month, he said “we remain positive” The Hobbit would be made, despite the film having no official green light, director or full cast.

Matamata-Piako District Council granted resource consent for the Hobbiton set late last year. According to the application, filming was scheduled for 10 to 15 days in January or February next year, with 350 people on set.

It said some of the set, built for The Lord of the Rings, would be reconstructed, adding to the leftover trilogy set. “The proposal is to reconstruct these structures as permanent buildings, so that, after filming, it will provide a more complex model of the `Hobbiton Village’ for future movie set tours.”

Still to be built were the Green Dragon pub, watermill, bridge, jetty, Bag End, Bag Shot Row and Bag End Tree.

Matt Dravitzki has been Peter’s assistant for years now. He was incredibly helpful to me during my second and third visits to Wellington back in 2004 when I was doing research for my book. I never doubted for a moment that the Hobbit production would go ahead, but it’s good to hear it confirmed byMatt.

It would be great if this time around the Hobbiton set didn’t have to be taken down. I’ve taken several locations tours in New Zealand, but so far I’ve never gotten out to the “Hobbiton” farm. Maybe someday I’ll get to see it, and with more than the white façades that remained after the LOTR sets were taken away.

As to filming in January and February, that bodes well. It was back in January of 2000 that Ian McKellen joined the cast in filming scenes like the arrival of Gandalf’s cart, out on that same Matamata farm. Perhaps Gandalf’s earlier arrival on Bilbo’s doorstep can be filmed 11 years later.

I see that The Music of The Lord of the Rings, by Doug Adams, is available for pre-orders on Amazon. (It comes out in the U.S. on October 5.) The book will include a CD, “The Rareties Archive.” Today Doug posted a list of the tracks on his blog, along with a brief account of how he chose these pieces of music out of the many possibilities.

Today Variety posted an interesting piece by Pamela McClintock, discussing the various possibilities for the distribution of MGM’s films if Spyglass Entertainment takes over the running of the studio. Right now MGM has its own distribution wing, but that doesn’t make a whole lot of sense when the company is making so few films–and would make relatively few even if it avoids bankruptcy. Here’s what Ms McClintock has to say:

The proposal under which Spyglass Entertainment’s Gary Barber and Roger Birnbaum would take the reins of troubled MGM is sparking talk in Hollywood that the Lion would likely shutter its domestic theatrical distribution operation if the Spyglass deal comes to pass.

Majors that are a natural fit to handle theatrical distribution for a pared-down MGM include Paramount and Sony, although 20th Century Fox already handles worldwide home entertainment distribution for MGM as well as international theatrical distribution.

For MGM creditors, the appeal of a Barber-Birnbaum team is the duo’s track record of working closely for more than a decade with most of the majors, co-financing and co-producing an array of titles. Spyglass also has produced its own films.

Barber and Birnbaum could continue in the same vein at MGM. Among MGM’s more lucrative film franchises, Warner Bros. already has domestic distrib rights to “The Hobbit,” while Sony distributed the past two James Bond pics for MGM — though it’s possible another studio could become the new Bond distrib for the Lion.

Insiders say one blueprint under discussion is for the newly configured MGM to make four to six films a year. With that volume, it wouldn’t make sense to maintain a theatrical distribution operation or a full-fledged marketing division.

Shutting down MGM’s distribution operation and dramatically trimming the Lion’s marketing unit would save millions in overhead, a plus for creditors looking to resolve the company’s $4 billion debt load.

Barber and Birnbaum launched Spyglass in 1998 after inking a five-year distribution deal with Disney. After the Mouse House relationship ended, Spyglass began working with most of the majors.

In recent years, Spyglass has become particularly close with Par, co-financing and co-producing J.J. Abrams’ “Star Trek,” as well as “G.I. Joe: The Rise of Cobra.”

Unlike other majors, Paramount would appear to have the capacity to accommodate four to six titles a year. Par has adopted a lean-and-mean approach of releasing fewer of its own movies and relying on slate distribution deals, such as those with Marvel Entertainment and DreamWorks Animation. Its DWA pact is up in 2012.

MGM and Sony have a close relationship after working together on Bond pics, which Sony distributed. Spyglass has also teamed with Sony several times, as well as with Universal, with which it worked on this summer’s comedy “Get Him to the Greek.”

In addition, Spyglass is no stranger on the Fox lot, having teamed on films including “27 Dresses.”

One wild card is MGM’s home-vid deal with Fox, which is up next year. That could become a negotiating point for any domestic theatrical distrib deal MGM strikes with another studio. Ditto for Fox’s international theatrical distribution pact with MGM.

Because of all the creditors involved, knowledgeable sources stressed that the Spyglass/MGM negotiations could still fall apart.

Eruonen, over on TheOneRing.net’s message boards, points out a story posted today by the Los Angeles Times. It adds some details to the information I posted yesterday about the possibly restructuring of MGM in partnership with Spyglass Entertainment:

After several weeks of haggling over deal terms, Spyglass Entertainment is in the final stages of hammering out an agreement to take over the management of debt-ridden Metro-Goldwyn-Mayer, according to people familiar with the situation.

One sticking point had been the breakup fee that Spyglass would be paid should MGM decide to back out of the arrangement, said one person with knowledge of the negotiations.

[…]

In a plan Spyglass presented earlier this summer to MGM’s steering committee of leading creditors — including Anchorage Advisors, Highland Capital Management and Davidson Kempner Capital Management — Barber and Birnbaum would run a scaled-back version of the studio as co-chief executives as part of a long-planned pre-packaged bankruptcy. Under a restructuring plan, MGM creditors would swap their debt for equity.

Spyglass, whose main financial backer is Cerberus Capital Management, would remain a separate company, continuing to produce its own slate of movies. The company recently co-financed the Steve Carell comedy “Dinner for Schmucks” with Paramount Pictures and DreamWorks, and last year’s “Star Trek” remake and ” G.I. Joe” with Paramount.

Part of the Spyglass library, about 15 titles personally owned by Barber and Birnbaum that include such films as “The Sixth Sense” and “Seabiscuit,” would be folded into MGM’s own catalog of 4,000 movies.

It is unclear how much money Spyglass would need to make new movies at MGM and where the money would come from. Barber and Birnbaum have told MGM that they plan to slash overhead costs (about 450 people are still working at the studio) and produce a handful of movies each year, including James Bond sequels and two planned films with Warner Bros.’ New Line Cinema unit that are based on J.R.R. Tolkien’s ” The Hobbit.”

The fact that the plan was submitted “earlier this summer” and negotiations are in the “final stages” sounds promising.  As the story points out, however, this isn’t a done deal yet, and something could cause it to fall apart. I should add that Spyglass is a well-established, successful production company and could probably held MGM get out of its current situation.

The Wall Street Journal is reporting that Spyglass Entertainment is close to a deal to take over the running of MGM. I don’t subscribe to the WSJ, but if you do, the story is here. Fortunately for the rest of us, the site Hitfix has offered a summary, including:

Spyglass Entertainment is nearing a deal to run MGM after the studio restructures approximately $4 billion in debt later this summer.  This is a coup for Spyglass heads Gary Barber and Roger Birnbaum who have beaten rivals from Lionsgate and Summit Entertainment to merge or acquire the studio.  Warner Bros. was considered the only other serious bidder, but their offer for the venerable lion was considerably less than what MGM’s debt holders were looking for.

The report indicates Barber and Birnbaum would run MGM as co-chief executives and that Spyglass would merge parts of its film library with MGM’s.  The duo would also receive 4% of the new company that would be valued, in MGM’s view, at around $1.9 billion.  Most importantly, creditors would forgive all of MGM’s massive debt.

The story goes on to speculate about possible reorganization of the film wing of MGM. It goes on to say: “As for moviegoers, this likely means Spyglass will quickly move forward with working out the co-financing on Peter Jackson’s “The Hobbit” and that a new James Bond film will be in production as early as next year.  It’s worth noting the 50th Anniversary of the first James Bond film, “Dr. No,” is in 2012.”

For those curious about what Spyglass Entertainment is, take a look at their list of production here. Older films include The Sixth Sense, and the company is responsible for the current Get Him to the Greek and Dinner for Schmucks.

Thanks once again to Paulo Pereira, who’s obviously right on top of things, for alerting me to these stories!

[Added later on August 10: Oddly enough, today The Hollywood Reporter posted a story about how dire the MGM situation is and how the studio is headed for bankruptcy. As far as I can see, it’s basically a summary of what we already knew, with no mention of the WSJ news.]

Over on The Noldor Blog, Wellington tour guide and on-the-spot blogger Jack M. has been speculating that something special (a Hobbit greenlight announcement?) might be coming up on August 21. The Weta Cave is undergoing an unusually long refurbishment, it’s closed for a special function on August 21, and one of his contacts says that LOTR props and set elements are being dusted off and brought out of storage.

By themselves, those first two items wouldn’t mean much. The bringing out of props and sets, though, sounds distinctly promising. I had the privilege of touring just one of the warehouses storing such things, in October of 2003, when the production of Return of the King was just winding down. I suspect it was not the biggest of the warehouses, but it was jammed with Hobbiton and Bree stuff, Gandalf’s cart, Galadriel’s boat, Theoden’s throne, and at least one hobbit-hole façade. Stuff like that takes up a lot of space, and if some of it is being brought out, then it has to be put somewhere. In some of the studios, perchance?

Jack also writes, “MGM Studios apparently need to have about 10% of the film in the can by the end of the year, or they’ll lose the filming rights.” He kindly mentions that I might be able to comment on that. I’ll give it a try, though this is all speculation on my part. I have absolutely no inside information about New Line/Warner Bros.’ deal with MGM. But we do know this. MGM went into this deal owning the distribution rights to The Hobbit. Back in 1969, Tolkien unwisely sold both the production and distribution rights to LOTR and The Hobbit to United Artists, in perpetuity. (Usually such rights are sold for a fixed period and subject to various constraints–like making the film within a certain number of years.) Saul Zaentz did not buy the Hobbit distribution rights in 1976, when he bought the LOTR production/distribution rights and the Hobbit production rights. Thus the distribution rights stayed with U.A. Since then, U.A. has shrunk to a shadow of its former self and is now a subsidiary of MGM. It goes to show you how feeble U.A. is that the coverage of MGM’s financial woes seldom mentions it as an asset.

The core of the deal between NL/WB and MGM is that Warner will distribute the Hobbit film in North America and MGM will do so abroad. Since MGM owns all the distribution rights, I suspect that its deal with Warner involved MGM becoming a co-producer of the film in exchange for Warner distributing the film in the U.S. That much seems fairly plausible.

Now we get into even more speculative territory. I’ve been saying all along that WB must have written contingency clauses into its contract with MGM. After all, they knew the studio had serious financial problems. It seems possible that if MGM couldn’t come up with its share of the production money by, say, August, 2010, the deal would change. Perhaps WB would undertake to provide all production funding. It could certainly afford it, being flush with cash these days. In exchange, it would pay MGM a percentage of its revenue. Maybe MGM would still distribute abroad and get the percentage on WB’s North American take. Maybe WB would handle world distribution and give MGM a similar percentage on the international take. Perhaps some other arrangement would kick in. It’s faintly possible that somehow MGM has actually come up with its share of the production money, or a significant portion thereof. Or . . .

I don’t know if it’ll happen on August 21, but surely we should be learning something soon. We’ve heard that Peter Jackson is in complex (I’ll bet!) talks to direct the film himself. If those have finally come to a conclusion, that might break the current logjam. Possibly another director has been found to fill Guillermo del Toro’s place. Let’s hope, since the fans have been doing a lot of speculation themselves and are getting pretty darned discouraged.

[August 10: TheOneRing.net has posted an update. Their sources at Weta say the closure of the Cave is nothing unusual, and no big announcement should be inferred from it.

For some hopeful news about the MGM situation, see here.]